German companies are suffering from the weak dollar but there is little Europe can do about the problem, a senior German industry leader told a newspaper on the day US President George W. Bush visits Germany.
"The problem is especially noticeable in the automobile industry," Mr Ludolf von Wartenberg, director of the BDI industry federation, told the Financial Times Deutschland in an interview published today.
"This is one of the most important sectors in Germany because so many other parts of the value creation chain depend on it. So the dollar rate is one of the reasons that we're currently having problems," he said.
"At the moment, based on macroeconomic and business criteria, the euro is too strong and the dollar is too weak.
"The rate of $1.30 for the euro is not justifiable on economic grounds," he said. Von Wartenberg said the rate of $1.17 seen when the euro was launched in 1999 was an acceptable level.
"It would be good to have a rate of $1.10-1.15. But of course the market has to decide that," he said, but added that the problem was down to the United States. "We can see that the twin deficit in the USA creates problems but the Americans have to solve that themselves," he said, referring to the soaring US budget and current account deficits often blamed for the weakness of the dollar.
"If we had comparable budget problems, we would say that the government should not continue to lower taxes. But that's exactly what the US government is doing." He said the United States had to come to an arrangement with China and Japan to ensure a more balanced relationship between the main Asian currencies and the dollar.
"It's not actually mainly a Europe-US problem, it's more Asia-US," he said. Von Wartenberg's comments were published on the day that President Bush is due to meet German Chancellor Gerhard Schroeder in the west German town of Mainz as part of a tour of Europe intended to shore up transatlantic relations.