Euro struggles as economic growth predictions cut

Although the euro remains down against the dollar, the single currency has been able to claw itself back slightly. Ongoing problems in countries including Greece and Spain have kept the euro under pressure and an announcement that global economic growth remains sluggish has not helped matters.

In a meeting with the European Parliament, Mario Draghi, President of Europe’s central bank said it was not enough for eurozone members to expect to have their financial problems sorted out by the ECB. He added that it was vital that struggling economies did more to push national reforms.

Mr Draghi told ministers that economic recovery would be slow and that the road to that recovery was likely to be an uphill battle. The International Monetary Fund said that global growth predictions had been reduced from 3.5 per cent to 3.3 per cent for the year and has called on US and European policymakers to do more to tackle the problems hampering recovery.

Investors remain worried that Greece will be unable to honour pledges to hit targets to reduce its deficit which could result in much needed loans being refused by creditors.

The situation in the eurozone has been made even shakier by an announcement by finance ministers that Spain is not yet in need of a bailout. The markets had been hoping that the recession ravaged country would be making an official request for help imminently.