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EUROPE

UK papers lay into French bank chief

Calls by France's central bank chief and prime minister to have Britain's credit rating downgraded were Friday branded as "outrageous" and "ignorant" by an angry British press.

French President Nicolas Sarkozy should also feel “ashamed” of his reported outburst at British Prime Minister David Cameron after last week’s European Union treaty change negotiations, a leading title argued.

French bank chief Christian Noyer told regional newspaper Le Telegramme on Thursday that rating agencies – which have warned France could lose its top AAA rating – should instead turn their fire on Britain due to a slew of gloomy economic data.

His comments were dismissed as “outrageous” and “plain wrong” by The Times.

“It is simply not the job of a central bank governor to urge the downgrading of another country’s credit,” it added.

“There is only one good answer when asked about another country’s rating. ‘Sans commentaire’,” argued the broadsheet.

Popular tabloid The Sun ran a scathing leading article attacking “treacherous” Noyer under the headline “Gall of Gaul.”

“You find out who your friends are in a crisis,” it continued. “We shouldn’t be surprised, then, when the head of the Bank of France tries to better his country’s economic position by sabotaging ours.”

“Monsieur Noyer, you’re a AAA-rated fool,” it concluded.

The Financial Times joined in the condemnation, accusing Noyer of “resorting to nationalism”.

“Noyer’s suggestion… would be funny if it wasn’t for the fact that he is the governor of the Bank of France,” added the business broadsheet.

The Daily Telegraph, which carried “France declares war of words on Britain” as its front-page headline, also quoted Conservative lawmaker David Ruffley calling the comments “another example of Gallic self-delusion on an epic scale”.

French Prime Minister Francois Fillon later supported Noyer’s comments.

The Times said the pair’s behaviour was “inexcusable” while the Telegraph claimed it revealed “an alarming ignorance of the reasons behind Europe’s sovereign debt crisis”.

Britain and France clashed at last week’s EU crisis summit when London refused to join the other 26 members of the European Union in agreeing on a new fiscal pact to prop up the euro.

The eurosceptic Telegraph said Sarkozy should be “ashamed” after it was reported he had accused Cameron of behaving like “an obstinate kid” during negotiations and that he had boasted of leading the EU in saying “no to the English”.

“His comments confirm the suspicion that he placed Mr Cameron in an impossible position, knowing he could then be used as a convenient scapegoat,” said its editorial. “And they call us perfidious.”

The usually pro-Europe Independent and Guardian declined to comment on the French reaction, the latter instead dedicating its editorial to the conviction of former French leader Jacques Chirac.

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EUROPEAN UNION

The Euro celebrates its 20th anniversary

The euro on Saturday marked 20 years since people began to use the single European currency, overcoming initial doubts, price concerns and a debt crisis to spread across the region.

The Euro celebrates its 20th anniversary
The Euro is projected onto the walls of the European Central Bank in Brussels. Photo: Daniel Rolund/AFP

European Commission chief Ursula von der Leyen called the euro “a true symbol for the strength of Europe” while European Central Bank President Christine Lagarde described it as “a beacon of stability and solidity around the world”.

Euro banknotes and coins came into circulation in 12 countries on January 1, 2002, greeted by a mix of enthusiasm and scepticism from citizens who had to trade in their Deutsche marks, French francs, pesetas and liras.

The euro is now used by 340 million people in 19 nations, from Ireland to Germany to Slovakia. Bulgaria, Croatia and Romania are next in line to join the eurozone — though people are divided over the benefits of abandoning their national currencies.

European Council President Charles Michel argued it was necessary to leverage the euro to back up the EU’s goals of fighting climate change and leading on digital innovation. He added that it was “vital” work on a banking union and a capital markets
union be completed.

The idea of creating the euro first emerged in the 1970s as a way to deepen European integration, make trade simpler between member nations and give the continent a currency to compete with the mighty US dollar.

Officials credit the euro with helping Europe avoid economic catastrophe during the coronavirus pandemic.

“Clearly, Europe and the euro have become inseparable,” Lagarde wrote in a blog post. “For young Europeans… it must be almost impossible to imagine Europe without it.”

In the euro’s initial days, consumers were concerned it caused prices to rise as countries converted to the new currency. Though some products — such as coffee at cafes — slightly increased as businesses rounded up their conversions, official statistics have shown that the euro has brought more stable inflation.

Dearer goods have not increased in price, and even dropped in some cases. Nevertheless, the belief that the euro has made everything more expensive persists.

New look

The red, blue and orange banknotes were designed to look the same everywhere, with illustrations of generic Gothic, Romanesque and Renaissance architecture to ensure no country was represented over the others.

In December, the ECB said the bills were ready for a makeover, announcing a design and consultation process with help from the public. A decision is expected in 2024.

“After 20 years, it’s time to review the look of our banknotes to make them more relatable to Europeans of all ages and backgrounds,” Lagarde said.

Euro banknotes are “here to stay”, she said, although the ECB is also considering creating a digital euro in step with other central banks around the globe.

While the dollar still reigns supreme across the globe, the euro is now the world’s second most-used currency, accounting for 20 percent of global foreign exchange reserves compared to 60 percent for the US greenback.

Von der Leyen, in a video statement, said: “We are the biggest player in the world trade and nearly half of this trade takes place in euros.”

‘Valuable lessons’

The eurozone faced an existential threat a decade ago when it was rocked by a debt crisis that began in Greece and spread to other countries. Greece, Ireland, Portugal, Spain and Cyprus were saved through bailouts in return for austerity measures, and the euro stepped back from the brink.

Members of the Eurogroup of finance ministers said in a joint article they learned “valuable lessons” from that experience that enabled their euro-using nations to swiftly respond to fall-out from the coronavirus pandemic.

As the Covid crisis savaged economies, EU countries rolled out huge stimulus programmes while the ECB deployed a huge bond-buying scheme to keep borrowing costs low.

Yanis Varoufakis, now leader of the DiEM 25 party who resigned as Greek finance minister during the debt crisis, remains a sharp critic of the euro. Varoufakis told the Democracy in Europe Movement 25 website that the euro may seem to make sense in calm periods because borrowing costs are lower and there are no exchange rates.

But retaining a nation’s currency is like “automobile assurance,” he said, as people do not know its value until there is a road accident. In fact, he charged, the euro increases the risk of having an accident.

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