French central bank governor certa
in that euro will appreciate soon
Budapest, 4 May 2000 - The Governor of the Bank of France, Jean-Claude Trichet said today he was convinced that the euro's potential for appreciation would "rapidly materialize".
This was because markets would quickly realize that the currency's present exchange rates are out of line with the economic fundamentals of the euro area, Mr Trichet said.
Commenting at the World Congress of the International Chamber of Commerce on recent falls in the euro, Mr Trichet listed the fundamentals as robust domestic growth, steady implementation of the single market, affluent domestic savings and healthy external accounts.
"The euro system - which is the guardian of the euro for the sake of the people of Europe - knows that our fellow citizens want the single currency to be at least as solid as were their previous national currencies."
Mr Trichet said that 96% of French people were calling for the euro to be at least as solid as the franc, and the picture was the same in Germany and other countries of the monetary union.
The French central bank governor told an audience of more than 1,000 business leaders from all parts of the world: "I am profoundly convinced that market participants will realize rapidly, with our help, that the present rates are out of line with fundamentals, and that therefore the potential for appreciation for our currency will rapidly materialize."
Mr Trichet is stated to succeed Wim Duisenberg as President of the European Central Bank in 2002 under a plan agreed informally two years ago by European heads of state at a summit in Brussels to launch the single currency.
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