McCreevy says euro exchange rate 'liveable'

The Minister for Finance believes the current strength of the euro against the US dollar is bearable for exporters, but the speed…

The Minister for Finance believes the current strength of the euro against the US dollar is bearable for exporters, but the speed of the currency's recent ascent is causing problems.

He said the euro was equal to $1.17 in the first few months of its birth and did not seem to create problemsfor the world economy.

"So therefore the rate it's at now can be liveable, but it's the speed at which it has gone up that is causing difficulties," McCreevy said.

The euro's record high against the US dollar - touching a rate of $1.19 - this week has alarmed exporters.

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McCreevy said that as an exporting nation, Ireland had enjoyed a competitive exchange rate while the euro remained relatively weak.

"But now it's at a level which I suggest is probably more realistic, or the level at which we thought it would stay when we joined (the euro)," he said.

Asked about expectations in financial markets that the ECB will cut interest rates when it meets next week, McCreevy warned of the danger of playing into the hands of "marketeers".

"The ECB has a set way of doing their business, they arevery independent and I think they should remain so. I think theyshould apply their own rules and their own assessment of thesituation and apply them without being influenced too much bywhat the market expects," he said.

McCreevy said he hoped Britain, Ireland's biggest single trading partner, would join the euro sooner rather than later.

"Naturally it would be a great benefit to us, so therefore I have a vested interest in hoping the UK will join as soon as possible," he said, adding he understood the difficulties faced by the British government in convincing the public.

"I think other euro members feel the same as I do that theUK would be a major player and it could only be positive for theeuro if Britain was to join."