UPDATE 1-EU’s Juncker: euro hurt by economic growth worries

* Euro hovering near four-year low on debt crisis

* Juncker: markets not acting rationally
(Adds details, direct quotes)

By Stanley White

TOKYO, May 20 (BestGrowthStock) – The euro’s decline to a four-year
low is likely due to fears that economic growth in the 16
countries that share the currency will slow, but markets are
acting irrationally, Eurogroup Chairman Jean-Claude Juncker said
on Thursday.

Investors have punished the common currency, European stocks
and European government debt recently after Greece revealed that
its debt burden was larger than previously reported, stoking
fears that European countries with weak public finances might be
unable to repay their debts.

Greece and Spain are taking austerity measures to lower their
fiscal deficits, and the European Commission has proposed that
European Union countries submit their initial budget proposals so
the EU executive can make sure countries are doing enough to
rebuild their finances.

The European Central Bank has also taken the unprecedented
step of buying euro-denominated government debt to help stabilise
markets as fears that Greece’s debt crisis could harm the global
economy weigh on global stocks.

“I don’t think this (fall) is because of the actions of the
ECB,” Juncker told Reuters.

“There are expectations that growth is slowing down because
of the deficit cuts we have to take. There is a certain
reluctance to believe the Greeks can overcome the current crisis.
I don’t think the markets are behaving in a rational way.”

On Tuesday, Greece received a 14.5 billion euro ($18 billion)
loan from the European Union and can now repay its immediate
debt, but still faces a mammoth task to claw its way out of
recession. [ID:nLDE64H0X9]

Some economists also have said that while the euro zone’s 750
billion euro ($924 billion) safety net for the debt obligations
of its members solved near-term insolvency risk, it did not
resolve the longer-term problem of huge public deficits.
Investing Analysis

(Editing by Michael Watson)

UPDATE 1-EU’s Juncker: euro hurt by economic growth worries