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French finance minister defends euro

French finance minister Christine Lagarde speaks at a press conference for G7 finance ministers in Canada earlier this month.
French finance minister Christine Lagarde speaks at a press conference for G7 finance ministers in Canada earlier this month.
STORY HIGHLIGHTS
  • Lagarde says speculators are playing with the level of the euro
  • She says euro is a common good in Europe
  • Says lessons of financial crisis need to be repeated and repeated
  • Says better regulation, properly enforced, is the key

London, England (CNN) -- French finance minister Christine Lagarde said Wednesday the euro has made the 16 European countries that use it "stronger" and reinforced the level of trade among them.

Speaking to CNN's Jim Bitterman, Lagarde also said speculators are playing with the level of the euro at the moment in the hope they can cash in on the process.

"The currency is a common good, it's a public good," Lagarde told CNN. "It's critical. It has protected us, it has made us stronger, it has certainly reinforced the level of trade that we've conducted amongst ourselves. And it's a key component."

Asked if currency speculators were out to destroy the European currency, Lagarde replied: "There is a little game that is being played by speculation, yeah, and by speculators.

Video: Greece crisis: French view

"Shorting a currency in the hope that you can cash in on the process is a pure speculative approach and this is one that is taken by several operators in the market at the moment."

Lagarde said she hoped big financial institutions had learned some lessons from the financial crisis, although she said those lessons need to be "repeated and repeated and repeated."

"That is, no excess, no abuse of the system," she said.

RELATED TOPICS
  • France
  • Euro (Currency)
  • Euro Zone

She said France had put in some legislative "modifications" to help achieve those goals, including regulation on bankers' compensation and bonuses, a "revised supervision system" and "reviewed legislation concerning rating agencies."

"We need to pursue that," she said. "I'm personally convinced we need better regulation, properly enforced, with a regular reminder of what we need to respect."

French Prime Minister Francois Fillon recently unveiled further details of a 26-billion-euro ($33 billion) business stimulus package which his government hopes can stall falling growth and prevent the country from joining other major European economies in recession.

Up to 1000 projects will benefit from the package, which was first proposed by French President Nicolas Sarkozy in December and approved by French lawmakers in January.

The package is expected to stimulate economic growth of around 1.3 percent, Fillon said. France has so far avoided the worst of the recession that has gripped many of its western European neighbors, including Germany and the UK.

Last year, the French government injected some $14 billion into the country's six largest banks to help stabilize the economy and ensure the banks had adequate lines of credit.

CNN's Jim Bitterman contributed to this report.