FRANKFURT, Dec 22 - European Central Bank Executive Board member Tommaso Padoa-Schioppa has told a German newspaper too much fuss is being made about the strength of the euro, echoing recent remarks by other ECB policymakers. In an interview to be published on Tuesday, the Frankfurter Allgemeine Zeitung asked Padoa-Schioppa whether the euro's strength called into question an economic upturn in the eurozone. "Only in so far as we live in a system of flexible exchange rates," Padoa-Schioppa replied. "In Europe the exchange-rate trend is talked about far more than it is in America. This shows that this situation is new for many eurozone countries. Before the introduction of the euro they tied their currencies to the Deutschmark," he added.
Padoa-Schioppa also said that in his opinion a new European Union banking supervision committee that is being established should be set up in Frankfurt, where the ECB is, rather than in Brussels. "The Level III Committee could prove to be an embryonic structure for cooperation between EU supervisory authorities," he said. "From the ECB's point of view, the nearer it is the better." He also said he saw no need to reform the EU's Stability and Growth Pact, whose credibility was undermined last month when France and Germany rode roughshod over budget regulations to avoid disciplinary action on excessive deficits. "What happened in Brussels has nothing to do with the structure or the economic content of the pact," he said. "The law is fine, it's just that it was unfairly implemented. That's something we have to work on."//