ECONOMY

Euro is still credible

SKHIRAT, Morocco – The European Union’s single currency is solid and will continue to be very credible in the future, EU Monetary and Economic Affairs Commissioner Joaquin Almunia said on Sunday. Almunia also told Reuters in an interview that he expected EU reforms, including the relaunched Lisbon strategy, to proceed despite a breakdown of the EU summit early on Saturday. The collapse threatens the enlarged 25-nation bloc with financial paralysis on top of political uncertainty wrought by double referendum defeats, unnerving financial markets and weakening the euro. «The euro is a solid currency, the monetary union is a very solid reality and the benefits of the monetary union are much higher than the problems we can have now with our common currency,» Almunia said on the sidelines of an EU-Mediterranean finance ministers meeting. The euro hit its lowest levels since August 2004 at $1.2014 on Wednesday. It has lost about 11 percent of its value so far this year, with investors jittery about possible disunity in the currency bloc following the budget collapse. «I am convinced that in the future the euro will continue to be a very credible and a very useful currency that allows the Europeans to have low prices, low interest rates and better conditions for recovery in the growth rates that we are looking for,» Almunia said. Spanish Finance Minister Pedro Solbes, Almunia’s predecessor, said the recent fluctuations in the euro were part of a normal evolution of the 12-nation single currency. «I think one should not be concerned. There is no risk,» he told Reuters at the same meeting on the outskirts of Morocco’s capital, Rabat. «The euro was a very positive element in the growth and stability in Europe and I consider it will continue to play this role,» Solbes said. Reforms to proceed Almunia said he expected the reforms aimed at transforming the EU into a more competitive market would go on, despite failure by leaders to agree on a 2007-2013 budget, just two weeks after French and Dutch voters rejected its proposed constitution. Solbes agreed. The reforms promise further internal market liberalization, increasing employment and investing in education and research and development. Leaders agreed on a slimmed-down version of the reforms in March after progress on a more ambitious list was slow. Each of the EU’s 25 member states is to present its individual reform scheme, based on the Lisbon strategy, in late 2005. «The Lisbon strategy will absolutely continue; there’s no doubt about that,» Almunia said. «Some of the instruments necessary to complement the national efforts should be included in the next financial perspectives,» he said. «(So) from this point of view the postponement in the decision is not good news.» Almunia said resources required to finance research and development, education, innovation and infrastructure projects at the European level were still to be decided.