François Hollande has exacerbated fears that the world is slipping into a dangerous bout of currency wars by suggesting that the European Central Bank intervene to bring down the value of the euro.
At the European Parliament in Strasbourg, the French President said European member states should agree a "realistic" medium-term exchange rate for the single currency. "The euro should not fluctuate according to the mood of the markets," he said. "A monetary zone must have an exchange rate policy. If not, it will be subjected to an exchange rate that does not reflect the real state of the economy."
The strengthening euro, which has risen by 11 per cent against the US dollar since last summer, has caused alarm among some of the Continent's policymakers who fear that it could jeopardise the eurozone's chances of pulling out of recession this year.
The new Japanese government is believed to be targeting a lower yen to help exporters, and the Governor of the Bank of England has argued that sterling is overvalued. At the same time the US Federal Reserve has pledged to keep dollar-weakening monetary stimulus in place until domestic unemployment falls to 6.5 per cent.
Mr Hollande's call for currency intervention from the ECB met resistance from the Germany economy minister, Philipp Roesler, who said: "The objective must be to improve competitiveness and not to weaken the currency."
There were further signs of strain between the two main powers of the single currency when Mr Hollande, in an implicit reference to Germany, warned nations with budget surpluses not to demand "austerity without end" for struggling neighbours.
There was also an oblique sideswipe at Britain as Mr Hollande rejected the idea of an "à la carte Europe". Responding to David Cameron's recent pledge to renegotiate the UK's relations with the EU, the French President said: "Europe is a commitment where each accepts the equilibrium of rules … It is a project where you do not dispute without end the [rules] and throw everything into question at every step."