LISBON, Portugal (AP) — French President Nicolas Sarkozy urged China on Friday to curb massive financial and trade surpluses.
Speaking after a two-day EU summit, he said there was no consensus that the euro — which has soared against the U.S. dollar — ''is overvalued. )
But everyone agrees some other currencies are undervalued,'' he added, referring to the Chinese currency. Sarkozy's comment echoed the EU view that China — a country with a vast and growing current account surplus — must allow the yuan to trade more freely.
''Great nations have rights,'' said Sarkozy. ''But they also have duties.''
The euro cost $1.43 Friday, well over the ''pain threshold'' of $1.40 identified by EU business leaders.
A strong euro make European exports — from French wines to Italian fashion to cashmere sweaters — pricey in the United States, the continent's main export market.
Some EU governments feel a strong euro reflects a strong European economy, able to ride out problems.
Judging by Sarkozy's comments, France is not among them.
This month the euro zone finance ministers called on China to reduce its massive trade and current account surpluses.