On March 14, 2008 the Euro surged again to a record high against the U.S. Dollar as the liquidity crisis in the financial market continues and the U.S. economy falters. During the meeting of the leaders of the European Union on March 14, 2008, much of the discussion centered on how to stabilize the foreign exchange markets. According to Romano Prodi, Italy’s Prime Minister, urgent actions are needed now because high oil prices combined with the level of the Euro, will affect economic growth in the Euro Zone.
Allan Sichel, Vice President of Bordeaux Wine Industries group is quoted as saying, “the fear is that, at some point, the U.S. customers will stop buying.” According to a spokesperson from BusinessEurope, a group of European employers, the current increase in the Euro has exceeded the tolerance level of many European firms. Since the beginning of this year, the Euro rose more than 5% against the U.S. dollar; it closed at 1.56 on March 14, 2008.
The European Trade Union Confederation has been insisting that the European Central Bank cut its interest rate to stimulate economic growth, which has been estimated to decrease to 1.8% this year, from 2.7% in 2007.