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Euro hits four-year low on fears debt crisis will spread

Graeme Wearden
London Guardian [1]
Monday, May 17th, 2010

Fears that Europe’s financial crisis will escalate pushed the euro to a four-year low today, bringing it closer to parity with the dollar.

The financial markets continued to pile pressure on Europe’s political leaders, sending the euro to $1.2234 at one stage – its lowest level since April 2006. The European single currency has fallen sharply against the dollar since the start of May, losing more than 7% of its value.

Today’s losses came after German chancellor Angela Merkel said that the €750bn (£640bn) eurozone rescue package announced a week ago was not a permanent fix for the area’s weaker members.

“We’ve done no more than buy time for ourselves to clear up the differences in competitiveness and in budget deficits of individual eurozone countries,” Merkel told union leaders yesterday.

“If we simply ignore this problem, we won’t be able to calm down this situation,” she added.

Full article here [1]