Weak dollar also has disadvantages for US: Eichel

BERLIN (AFP) - German Finance Minister Hans Eichel appeared to issue a veiled call for the United States to help stem the fall of the dollar, as G20 finance ministers and central bank chiefs were scheduled to meet in Berlin.
"It can't be in America's interest to allow the dollar to fall quickly," Eichel told German radio DeutschlandRadio Berlin in an interview.
"That would also be dangerous for the US economy," he added Friday.
And Eichel reiterated his call for Europe, the US and Japan to reach a common solution on the exchange rate problem.
"Within the triad, ie. Japan, America and Europe, we'll have to sit down together and try to reach a common solution," Eichel said.
"But that is a matter that is not for the public. Exchange rates are not discussed in public," he said.
Eichel also said that there were two sides to the coin of the euro's runaway strength with both advantages and disadvantages for Europe.
"If the dollar is cheaper against the euro, then that means of course that oil is not as expensive for us as it appears to be on the world market," he said.
"The snag, on the other hand, is that it's bad for exporters," the German finance minister continued, but nevertheless noted that Germany exports most of its goods to its "partner countries in the European Union rather than to the dollar region."
Eichel was speaking just hours ahead of a meeting of G20 countries in Berlin, in which exchange rates and the strength of the euro in particular, while not officially on the agenda, were expected to dominate discussions between central bank chiefs and finance ministers of the world's 20 most important industrialised and developing nations.
The euro was trading at just under 1.30 dollars on Friday morning, changing hands at 1.2955 dollars in Tokyo.
In an interview published in the Financial Times Deutschland, finance ministry state secretary Caio Koch-Weser said that the G20 was not the forum to discuss exchange rates.
"The G20 is not the forum for discussions on exchange rates," Koch-Weser said.
Nevertheless, he, too, believed that oil prices and the weak dollar represented a danger to the global economy.
"Overall, the risks have increased for the global economy next year as a result of oil prices and exchange rate developments," the state secretary said.
So far, the industrialised countries viewed the slowdown in growth in Germany, France and Japan as "a pause, because all the other indicators are pointing upwards," Koch-Weser said.
But oil prices could remain stuck at their current high levels for some time, he cautioned.

11/19/2004 - 11:11 GMT - AFP