'Strong euro not yet hurting exports'

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FRANKFURT, July 24 (AFP): Eurozone exporters have not yet felt any significant negative impact from the rise of the euro, the European Central Bank's chief economist Juergen Stark said in a newspaper interview published today.
"Exporters in the euro area have not suffered until now under the strong euro," Stark told the daily Frankfurter Allgemeine Zeitung, effectively dismissing complaints from the French government that the rise in the single currency was having a detrimental effect on growth.
The euro briefly surged to a new high of 1.3845 dollars Monday but has since fallen back slightly.
"The continental Europeans have, at least for the moment, overcome their long years of weak growth. At the same time, the US economy is expanding more slowly. This is finding its expression in exchange rates," Stark said.
"Confidence in the economic strength of the euro area has increased, as has confidence in the institution that is responsible for the single currency," namely the ECB, he added.
Stark insisted that the ECB's overriding priority was to safeguard price stability, and fulfilling that task should not be sacrificed to shorter-term political considerations, such as exchange rate targets.
The French government has argued that the ECB's decision to raise its key rates eight times over the past 18 months has driven the euro against the dollar and that no further monetary policy tightening was necessary.
"The ECB's mandate is clear-to safeguard internal price stability," he said. "We have no exchange rate target."
And he continued: "So far, we've seen a very gradual rise in the value of the euro. It only becomes problematic if there are abrupt changes."
Stark defended the ECB's independence, which some French politicians have recently questioned. Political meddling in the ECB's monetary policy was expressly forbidden in the Maastricht Treaty of European union, the central banker said.
"We have a new generation of politicians who might occasionally need to be reminded of one or the other point that forms the basis and principles of European integration," Stark said.
"In recent there have been attempts to undermine this under the disguise of economic patriotism."
The ECB official said that the bank, known as the guardian of the euro, would likely continue raising its key interest rates in the coming months.