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Strong euro threatens Europe recovery: Eurogroup
2009-10-16
LUXEMBOURG (AFP) - The euro's rise to a 14-month high against the dollar threatens to "slow economic recovery in Europe" by hitting exports, the head of the group of 16 countries using the currency said Friday. "If the euro's direction were to continue to move along the lines of recent weeks, there is a risk... that it could slow economic recovery in Europe," said Luxembourg Prime Minister Jean-Claude Juncker, who heads the Eurogroup. The euro touched a 14-month high of 1.4968 dollars on Thursday, crowning a rise of around 18 percent against the dollar since March. However Juncker said he was not too concerned about the euro's present level, which is still below 1.60 dollars it hit in July 2008. "I'm not too worried by the current rate," he said. There is concern in Europe that Washington is allowing a weaker dollar as a short-term boost to its own exports and a long-term reduction in the value of government and private debts, much of which is held in China. "I stick to the official stance given by the US monetary authorities in favour of a strong dollar, which by nature would serve the interests of the American economy," Juncker added. He also said he was "very happy" when US officials repeat "time and again that a strong dollar is in the interest of the American economy," ahead of talks between eurozone ministers on the issue set for Monday. The eurozone's trade balance with the rest of the world collapsed to a 4.0-billion-euro (6.0-billion-dollar) deficit in August from a record 12.3-billion-euro July surplus, official data showed on Friday.
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