Mario Draghi has hit back at the Trump administration’s claims Germany is a currency exploiter using a weak euro to boost its exports to the detriment of the US and the rest of the eurozone.

Speaking to MEPs in Brussels on Monday Mr Draghi said:

We are not currency manipulators first and foremost. Our monetary policies reflect the diverse positions in the economic cycle of the eurozone and the United States.

Peter Navarro, head of US President Donald Trump’s new trade council, said Germany was exploiting firms in the US and the eurozone by using a “grossly undervalued” euro.

Mr Navarro’s remarks step up earlier US administrations’ calls for Germany to address its vast current account surplus, which is expected to come in at more than 8 per cent of GDP this year.

Mr Draghi however reiterated the US Treasury’s view that Germany is not a currency manipulator based on an assessment carried out in 2010.

He added the performance of the German economy and its international competitiveness since the financial crisis was based on increases in productivity rather than just suppressing wages.

Berlin’s finance minster, Wolfgang Schäuble has however laid the blame for a falling exchange rate firmly at the feet of the ECB and its stimulus measures rather than the policies of the German chancellery.

Speaking at the weekend, the veteran Mr Schäuble said:

The euro exchange rate is, strictly speaking, too low for the German economy’s competitive position.

When ECB chief Mario Draghi embarked on the expansive monetary policy, I told him he would drive up Germany’s export surplus . . . I promised then not to publicly criticise this [policy] course. But then I don’t want to be criticised for the consequences of this policy.

The euro has weakened 5 per cent against the dollar over the lst year following a widening of the divergence between the US Federal Reserve’s and the ECB’s monetary policy.

While the Fed has responded to a stronger US economy by raising rates, the ECB plans to buy €780bn in mostly government bonds this year to boost a recovery that, while resilient, remains weak.

Interest rates will almost certainly stay at their record lows in the eurozone for the duration of 2017.

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