Speaking after the euro-dollar rate rose above $1.50 for the first time in 14 months, Adolfo Urso, deputy industry minister in charge of trade, said the latest euro high represented a new threat to Italy's exports which are already taking a beating.
"The break through $1.50 is bad news and a source of worry for our exports towards the United States, our main market outside the European Union, and also towards China, as the yuan is tied to the fluctuations and weakness of the dollar," Urso said in a statement.
"It is something that prompts great concern [...] because some analysts expect that the the weakness of the dollar will continue and reach the critical threshold of $1.60 to the euro."
Urso said a combination of the global economic crisis and the euro's appreciation by 20% versus the dollar since the start of this year had caused a fall in Italian exports to the United States of 24.9% between January and August.
ECB chief Jean-Claude Trichet discussed exchange rates with eurozone finance ministers on Monday (19 October) but said nothing new on a dollar slide that some fear could hurt Europe's economic recovery.
French Economy Minister Christine Lagarde said she was preoccupied by exchange rate levels seen for the euro. "We reiterated together that we want and need a strong dollar," she said.
Dutch Finance Minister Wouter Bos described the meeting as "pretty boring" and stuck to the more sanguine view his country often takes on currency matters. "We always say we believe that the strength of a currency reflects the strength of the economy, so a strong euro reflects the strength of the European economy," Bos told reporters.
European businesses have long complained about the euro's high exchange rate, which they say is hurting Europe's economy. In 2007, BusinessEurope, the EU employer's organisation, sent a letter to Eurogroup President Jean-Claude Junker warning that the euro had reached its "pain threshold" when it rose above $1.40 (EurActiv 4/10/07).
(EurActiv with Reuters.)
