MercoPress. South Atlantic News Agency

Strong Euro, but not too much?

European Finance ministers will support a strong Euro policy, although contrary to an excessive appreciation of the common currency.

The decision was reached in Milan in face of the coming G-7 meeting to be hosted by Untied States in Florida next February 7.

"Economic expansion will be one of the several priorities of the Florida agenda next weekend", said sources close to the Italian Finance Ministry.

This statement somehow contradicts US Treasury Under-Secretary John Taylor's comments who forecasted that the G 7 meeting will concentrate in commitments for a rapid economic expansion in all fields.

"Growth is definitively one of the issues, but not the only one. We are also going to address fiscal, monetary and economic policies. European Finance ministers will want to discuss all these issues", anticipated the Italian Finance Ministry source.

The rapid appreciation of the Euro against the US dollar has become a thorny issue in Atlantic relations with the Europeans suggesting the Bush administration is promoting "soft" dollar policy to stimulate the economy in an election year.

The Euro is exchanging above 1,25 US dollars after reaching the 1,30 threshold.

The US economy managed to expand 4% in the last quarter of 2003, after a spectacular 8,2% in the third quarter, which pushed the overall annual GDP growth to 3,1%, the highest since 2000. In 2002 growth was 2,2%.

According to the US Department of Commerce the US GDP reached 10,59 trillion with consumption growing 2,6% in the last quarter of 2003 and fixed capital investment 6,9%, down from 12,8% in the third quarter.

In this year's first meeting the Open Market Committee of the Federal Reserve suggested that the basic interest rate in the US will remain unchanged, "with inflation quite low and resource use slack, the Committee believes that it can be patient in removing its policy accommodation".

The current basic rate in the US stands at 1%.