EU Finance Ministers Discuss Concerns That US Economy Will Drag Down Europe

[babylonsister]

EU to Discuss Economic Slowdown in US
Sunday October 7, 6:25 am ET
By Aoife White, AP Business Writer
EU Finance Ministers to Discuss Concerns That Slowing US Economy Will Drag Down EU

BRUSSELS, Belgium (AP) -- European Union finance ministers open two days of talks Monday to discuss the United States' slowing economy, feeble dollar and massive current account deficit as major problems for the EU and the rest of the world.

Europe is starting to feel the bite as the dollar plummets, making French wine, Italian fashion and German cars expensive purchases for the EU's main export market in the United States.

Last week, the employers federation BusinessEurope said that, by crossing 1.40 against the dollar, the euro exchange rate had reached a "pain threshold" for European companies. It also complained the euro was appreciating too fast against the Chinese yuan and Japanese yen.

While echoing their concern, the finance ministers of the 13 euro-zone nations will reiterate Europe is an innocent victim of others and that the euro-dollar exchange rate issue is part of a broader set of problems triggered by China's trade surplus and America's huge debts that require concerted steps to undo.

Luxembourg's Prime Minister Jean-Claude Juncker set the tone last week when he said the Europeans should not have to bear the consequences of other countries' inaction.

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http://biz.yahoo.com/ap/071007/eu_euro_vs_dollar.html?.v=1

[Selatius]

1. What's driving up the Euro even faster is American bond investors looking to stop the hemorrhaging.

It's amplifying the effect further. Unfortunately, the downside is consumer spending power within the US is plummeting relative to consumer buying power in Western Europe, which hurts all European exporters.