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Business

Schröder, Greenspan Discuss Euro’s Rise

German Chancellor Gerhard Schröder and U.S. Federal Reserve Chairman Alan Greenspan met Tuesday to exchange thoughts on the euro’s rise against the dollar and the risks it poses for European economic growth. "We talked about the development of the American and the global economy, and the relationship between the euro and the dollar," Schröder said after the meeting in Berlin. The German leader referred to the European Central Bank as the chief monetary authority for the 12-member euro zone and said it alone was responsible for taking action. In a speech after the high profile photo-op in front of the chancellery, Greenspan said the current U.S. account deficit was to blame for the slump in the dollar and added that Federal Reserve studies show that such "imbalances are likely to be adjusted well before they become destabilizing." But the ECB sees the current account deficit as a potential source of trouble for the world economy. It has repeatedly appealed to Washington to boost the dollar. Despite U.S. officials’ claims to following a strong dollar policy, European market analysts think Washington is unlikely to make efforts to counteract the greenback’s slide against the euro as long as the disparity continues to help American exporters in an election year. (based on wire reports)