Euro is hindering foreign trade, says Towe
West Midlands businesses would benefit from a combined French/German currency rather than the floundering euro when trading abroad. That's according to Stuart Towe, chairman of the Black Country LEP, who was speaking at an Insider event. He said: "In some ways it would be easier for the euro if it had a 'FrancMark'. Germany and France are clearly the highest performers, and we're seeing greatest demand from these countries."
Speaking about the current Eurozone crisis, Towe said that poor European economies were having an adverse effect on businesses in the region. It comes as the Eurozone crisis continues to hit stock markets around the world with heightened speculation that Italy and Spain could be next for bailouts.
"The Eurozone has never been led by economics," he said. "Rather it's always been influenced by the politicians leading the countries involved. The reality is the Eurozone has many financial irregularities, and they can be costly to UK businesses operating in the strong bloc of countries such as Germany and France."
Towe is also managing director at Smethwick-based metal manufacturer Hadley Group, which produces cold rolled formed sections and allied products.
He insisted that there needed to be a proper financial audit of the Eurozone economies, but admitted the likelihood of such an action was doubtful.
"There's no realistic prospect of an audit. It should've been done when the euro was set up, and there seems no political will to do it now. I think that state of affairs will continue, as each country desperately wants to stay on the bandwagon. It's definitely a case of the tail wagging the dog," he said.
Towe’s comments came after leaders of the Eurozone countries recently signed a new bailout package for Greece of about £96.3m.
He went on to add that the markets are no longer "responding to rationale" and said the unstable currencies were making trading increasingly difficult for manufacturers.
"The problem with the Eurozone economy is that over the last two years things have come in from the leftfield and no-one know what’s going to happen next," said Towe. "That affects confidence. The two major worldwide currencies [the US dollar and the euro] are now so volatile that common sense – for manufacturers at least – doesn't exist any more."
