The euro's fall in value could deter investment in Europe by sapping confidence in the single currency area, the Bundesbank said in its November monthly report published on Thursday, November 23.
The German central bank said there were no long-term competitive advantages for the euro zone's exporters from a weak single currency, since any advantages would very quickly be negated by a rise in import prices.
"Above all, (the short-term advantages of a weak euro) cannot offset the possible damage to investor confidence and the resulting consequences for the supply of capital and willingness to invest in the euro area," the Bundesbank said.
”For monetary policy makers, there is therefore no alternative but to pursue the current stability policy," it said.
The statement contrasted sharply with the November monthly bulletin by the Bank of France, which said the euro zone had attracted a net 73 billion euros ($62 billion) in foreign direct investments during the first eight months of this year.
"The thesis that the euro zone would not be attractive enough to foreign investors has thus been disproved," the French central bank said in its report, released Tuesday.— (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)
