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EU official says Europe poorer as prices roaring

Rising prices of oil and food imports has made Europe poorer, an EU commissioner for economic affairs said.

“As Europe is dependent on energy from the outside world and as we also import a great number of commodities, this means the European economies are becoming poorer because of these price rises,” EU Economic and Monetary Affairs Commissioner Joaquin Almunia said in the European Parliament.

“This is a fact we are going to have to accept if we are to come up with responses,” he added, warning against any hasty responses to the surging prices.

On Monday, oil price rose to a new record high over $143 a barrel

Official figures said that the EU have to spend over €1 billion ($1.57 billion) a day to import oil for use at the current prices as the bloc only produces less than a fifth of the oil it needs.

Almunia attributed imbalance in the supply-demand situation to the rising prices, saying “Supply has not responded.”

On currency, the commissioner said that the euro is currently overvalued against the dollar.

“For the moment, the euro is in my opinion overvalued,” Almunia said, “It's not huge but it's noticeable.”

The euro was at 1.58 dollars on Monday in London.

He said that some industries, such as airplane makers heavily dependent on exports, were particularly affected by the strong euro, while commodities importers were “perfectly satisfied” with the current exchange rates. (Xinhua)