EU to call on G20 to advance on fx without numerical goals

BRUSSELS (BestGrowthStock) – European Union representatives at the G20 summit in Korea next month will call for remedial action to be taken on exchange rates and capital flow issues where needed to prevent a widening of global imbalances.

A letter written by European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy, the two EU leaders, says, however, that solving global imbalances does not require imposing numerical targets on current account surpluses or deficits, as proposed by the United States.

“As global imbalances are fueled by exchange rate misalignments, in Seoul we need to find a common ground that will allow us to make progress on exchange rates and capital flows issues and take remedial action where needed,” said the letter, obtained by Reuters.

“In this respect, we have presented a proposal to the G20 on how to address these issues in a cooperative way, based on the methodology we have developed to cope with our internal imbalances, without having to resort to controversial quantitative targets, as suggested by the U.S.,” the letter said.

(Reporting by Jan Strupczewski, editing by Luke Baker)

EU to call on G20 to advance on fx without numerical goals