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Do not 'turn away’ from euro, PM Fillon tells Japanese investors

French Prime Minister Francois Fillon (pictured) urged Japanese investors Friday not to turn away from the euro, despite the wave of economic woes that have engulfed the euro zone following Greece's debt crisis.

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AFP - French Prime Minister Francois Fillon urged Japanese investors Friday not to shun the euro despite the recent crisis triggered by Greece's debt woes.

He also pressed Japan to abolish market barriers for European goods, including new medicines and railway products, before working toward a possible Japan-EU free trade pact.

"It is not in Japan's best interest to turn away from the euro," he told a group of business leaders in Tokyo, saying that the single currency had been stabilised through concerted EU action.

"True, there is no doubt that the eurozone has gone through the most serious crisis in its history," said the French premier, on a two-day visit to Japan, which was the leading Asian investor in France in 2009.

But he argued that there is nothing inherently wrong with the single currency for 16 member-states of the 27-nation European Union.

"Was the crisis caused by the single currency? Absolutely not," he said. "We have witnessed a classic sovereign debt crisis with badly managed public finances."

Fillon stressed that Europe, including powerful players France and Germany, is united and working closely together to stabilise the currency and reform public finances.

"I think we can say that every time there has been a crisis, Europe has actually come out stronger from all these difficulties," he said.

He openly thanked Japanese companies in France, such as leading carmaker Toyota and electric-heavy industry giant Toshiba, for providing jobs and long-term economic benefits in his nation.

But the words of appreciation came as Japanese investors have rushed to dump European assets on worries over the region's fiscal debt crisis.

Euro-denominated assets held by the nation's publicly offered mutual funds tumbled 37 percent in the first half of this year, the Nikkei business daily said this week.

The premier said France supported a new tax on high-risk financial activities to lower systemic financial risks.

Fillon also assured his audience that he had "no concerns about the course of the euro in the short and medium term," adding that its current level matched "the economic reality" of the eurozone economy.

But he said consultation among Europe, Japan, the United States and China should be tightened when currencies move rapidly.

The euro has recovered against the dollar as the greenback has been dragged down by fears of a US slowdown following disappointing economic data.

The euro bought 1.2911 dollars in Tokyo on Friday.

Fillon said France was "open" to a free trade pact between Japan and the EU, but only after Tokyo brings down non-tariff trade barriers.

The United States and European nations have long pressed Japan to open its market more to foreign competition.

Food processing safety standards and procurement rules for the railway sector, and rules on medicines and vaccines, "differ noticeably from international standards," he said.

"On all of these matters, we wish to see rapid and tangible progress," he said. "We are convinced that the Japanese, not only as consumers, but also as taxpayers and industrial partners, will be better off for it."
 

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