Following the recent world money crisis and subsequent devaluation of the American dollar on Tuesday (13th Feb), Visnews cameramen covered reaction in Japan and Europe.
Following the recent world money crisis and subsequent devaluation of the American dollar on Tuesday (13th Feb), Visnews cameramen covered reaction in Japan and Europe. In Bonn the West german Cabinet met to approve the new exchange rate for the dollar of 2,9003 Marks.
Before the meeting, the West German Finance Minister Helmut Schmidt said that West Germany had anticipated the dollar devaluation by the United States which took place earlier that day. A tidal wave of 6,000 million dollars had flooded into Germany last week. Herr Schmidt said that despite political pressure and psychological pressure from newspapers and banks, his government had seen no reason to revalue the Mark and that they had to make it clear to world opinion that they would not give in. Herr Schmidt said that the new rate would not place any impossible burden on West Germany's exports, and he praised the readiness to co-operate among all the countries concerned. The cabinet formally approved the new central dollar rate. After the meeting, Chancellor Willy Brandt said that his government had carefully avoided the trap of cheap anti-Americanism in handling the dollar crisis.
In Paris, the immediate effects of devaluation were felt by American tourists. In the meantime, the Finance Minister Valary Giscard d'Estaing reacted to the 10 per cent dollar devaluation by saying that he hoped that necessary supplementary measures would be taken to make the devaluation effective. The French Minister also said that the problems associated with the already floating British Pound and the fragile Italian Lira had argued in favour of unilateral American actin, and that the devaluation was in accordance with French wishes. On the Japanese decision to float the Yen, the Minister said that this would reduce the powerful competitive thrust of Japanese products on world markets.
In the Tokyo Stock Exchange there was a mixed reaction of Japanese industry to the money crisis and subsequent Yen float. Initially, there was a steep decline on trading on the exchange, followed by a quick recovery. Japan seems certain to face more economic and political difficulties despite Tuesday's dollar devaluation and Yen floating. The Japanese Finance Minister, Kiichi Aichi, indicated that the Yen would be floated for a considerable length of time during which period the question of a new fixed parity of the Yen would not arise. The Finance Minister also said he believed that the United States is unlikely to impose an import surcharge to reduce its high trade deficit with Japan, estimated at 4,100 million dollars.
SYNOPSIS: In Bonn on Tuesday, the West German cabinet met to approve the new exchange rate for the dollar which was devalued by ten par cent against the Mark earlier that day.
Herr Schmidt, the West German Finance Minister, had told newsmen earlier that the Government had anticipated the dollar devaluation. Thousands of millions of dollars flooded into Germany last week but the government resisted the pressure to revalue the Mark. Chancellor Willy Brandt said that his government had avoided the trap of cheap anti-Americanism in handling the dollar crisis.
In Paris, as elsewhere, the second American devaluation in fourteen months meant less spending money for the American tourist, but official French reaction to the dollar devaluation was favourable. The French Finance Minister expressed the hope that the necessary supplementary measures would be taken to make the devaluation effective. The Minister also said that the problems of the floating pound, and fragile Italian Lira, has necessitated American action. On the floating of the Yen, the French view is that it will reduce Japanese competition on World markets.
And in Tokyo the stock exchange reflected the mixed reaction of Japanese industry to the Yen float. A steep decline in trading was followed by a quick recovery. The official Japanese view is that the Yen should float for some considerable time. The Japanese government believes that the United States will not impose an import surcharge to reduce its estimated four thousand million dollar trade deficit with Japan.