Daily Times

BERLIN: German Chancellor Angela Merkel suggested on Saturday that the euro was too low for Germany but made clear that Berlin had no power to address this “problem” because monetary policy was set by the independent European Central Bank.

Merkel made her remarks at the Munich Security Conference as US Vice President Mike Pence looked on. They seemed aimed at addressing recent criticism from a top trade adviser to President Donald Trump, who has accused Germany of profiting from a “grossly undervalued” euro.

“We have at the moment in the euro zone of course a problem with the value of the euro,” Merkel said in an unusual foray into foreign exchange rate policy.

“The ECB has a monetary policy that is not geared to Germany, rather it is tailored (to countries) from Portugal to Slovenia or Slovakia. If we still had the (German) D-Mark it would surely have a different value than the euro does at the moment. But this is an independent monetary policy over which I have no influence as German chancellor.”

The euro has fallen nearly 25 percent against the dollar over the past three years, touching a 14-year low of $1.034 in January. But it has since risen to roughly $1.061. In late January, Peter Navarro, the head of Trump’s new National Trade Council, said the euro’s low valuation was giving Germany an edge over the United States and its European Union partners.