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EU Chief Fears Further Risk for Euro, Report Says
Romano Prodi, President of the EU Commission, fears that the introduction of the euro cash and inflation might further weaken the European single currency, according to a German press report.
In an interview with German magazine Focus to be carried out in its next week's issue, Prodi cites studies indicating that up to 40 percent of Deutsche Marks in circulation outside Germany could be converted into US dollars instead of euro.
Germany and other 11 European countries will fully swap their national currencies for euro by the end of this year.
Since more than 100 billion DMs are circulated outside Germany, their conversion into US dollars would put further burden on euro, reports quoted Prodi as saying.
The current exchange rate of euro against US dollar is 0.85:1, almost one cent lower from the level at the beginning of the year.
Prodi also fears that inflation in the euro zone, which was 3.4 percent in May, poses a danger for the euro, Focus reported.
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