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Euro is ‘too strong, too German’: French minister

Tuesday, 22 Oct 2013 | 6:45 AM ET
Photographer | Collection | Getty Images

France's industry minister has said he wants the European Central Bank to adjust the euro to make struggling European companies more competitive.

In an interview with French daily newspaper Le Parisien, Arnaud Montebourg said the central bank should do what every government does: "Adjust the rate in our interest."

"The euro is too expensive, too strong and a little too German," Montebourg was cited as saying. "It should be a little more Italian, French, and simply European."

A drop of 10 percent in the euro/dollar exchange rate would increase France's national wealth by 1.2 percent, create 120,000 jobs and reduce its deficit by 12 billion euros ($16.44 billion), he said.

If the euro fell by 20 percent, it would create 300,000 jobs and reduce the country's deficit by one-third, Montebourg added.

The euro is currently trading at around $1.36. On Friday it hit a high of $1.3704, its strongest level since early February. A strong euro makes it harder for European firms to export their products.

Montebourg lamented the fact that Europe was "the only region in the world which, five years after the crisis, has not returned to growth."

(Read more: Paris landlords squeeze more space and rent out of tenants)

France is struggling with a high unemployment rate– stuck at around 11 percent - and the country's central bank forecast has third-quarter growth of just 0.1 percent. Consumer confidence has also fallen sharply and French carmakers such as Peugeot Citroen are feeling the pain.

Peugeot announced that it is cutting jobs and capacity, and is in talks with Chinese partner Dongfeng and the French state over a capital hike.

Montebourg, a minister in Francois Hollande's increasingly unpopular socialist government, said the company would remain French, in France.

Asked if that meant no Chinese involvement in the carmaker, Montebourg told Le Parisien: "I didn't say that".

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