The euro's strength is harming the economy of the 15 countries using the currency and could exacerbate an anticipated slowdown in the bloc's economic growth in the year to come, EU officials cautioned.
The Commission has played down expectations for the EU's economy in 2008 and 2009. Meanwhile, the European Central Bank has responded to the "continued uncertainty" on European financial markets following the US sub-prime mortgage crisis by announcing further cash injections, but said higher than expected inflation meant a cut in interest rates remained out of the question.
China should allow its currency to rise more quickly in order to help Europe and the US restore some of their industrial competitiveness and limit growing trade deficits, said finance ministers from the world's seven leading industrialised nations.
Responding to questions from MEPs about the recent financial turmoil, ECB chief Jean-Claude Trichet and Commissioners McCreevy and Almunia highlighted the need to improve the transparency of financial markets rather than taking further regulatory action in order to avert similar crises in the future.
MEPs and trade unions are calling for interest-rate cuts and increased regulation of financial markets at EU level in order to avert a crisis similar to that of the US subprime mortgage, ahead of a debate with European Central Bank President Jean-Claude Trichet in Parliament.
European Central Bank President Jean-Claude Trichet has said that the bank is "not pre-committed" to raising interest rates, leading to speculation that an expected September rate hike may be off the cards.
Having convinced fellow eurozone nations that his country should be allowed to bypass a deal between the bloc's 27 members on eliminating budget deficits in order to boost growth and employment, French President Nicolas Sarkozy has also won support for his candidate to head the International Monetary Fund (IMF).
During his first visit to Brussels, French President Nicolas Sarkozy said that he would refuse to "sell off" the interests of French agriculture in WTO negotiations and announced future proposals to revise eurozone governance.
Global investors are favouring European currencies as the long-laggard continent ascertains its strong economic growth and the US economy shows signs of a substantial slowdown. But this may not be good news for all.
In an economic environment marked by the rationalisation of workflows and by global competition, good macro-economic figures are a necessary condition for creating jobs, but not a sufficient one, experts at a Brussels conference agreed.
The need for fast, accurate and balanced information is always important. We value EURACTIV's good, independent journalism and support this initiative
Mella Frewen, Director General of FoodDrinkEurope
EURACTIV plays a vital role in bringing Europe closer to its citizens. EURACTIV has long recognised that the story of Europe has to be told across the continent, and not just in Brussels. We need to support a truly European and informed debate.