OECD Chief Economist: Better Level For Euro At $1.2 Than $1.5

BRUSSELS (MNI) – It is better to have the euro at a level of $1.2
against the dollar than $1.5, the chief economist of the Organisation
for Economic Cooperation and Development (OECD), Pier Carlo Padoan, said
on Monday.

Fears about debt and deficit levels in the Eurozone and about the
strength of the currency bloc’s economic recovery have put pressure on
the single currency in recent months, with the Euro shedding almost 15%
of its value since the start of the year.

“I don’t complain” about the Euro depreciation, Padoan said in a
lecture in Brussels. “It is better to have a euro at $1.2 than $1.5,
let’s face it…$1.2 is a good number.”

He added: “We may expect the euro to go down a little bit more.”
But he said his prediction was from a reading of history, not of
markets.

The OCED chief economist said Europe is “moving slowly” out of the
recession and that global trade is rebounding strongly.

Late last month, the OECD warned the Eurozone that its high debt
levels posed a threat to its economic recovery. The organisation
predicted that the Eurozone economy will grow 1.2% this year.

“The sovereign debt crisis has highlighted the need for the euro
area to strengthen significantly its institutional and operational
architecture to dissipate doubts about the long-term viability of the
monetary union,” the OECD said.

–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com

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