One of Germany's top economists predicted Tuesday that the euro could go as high as 1.45 dollars next year, and said that the European Central Bank should now start to intervene to keep the euro from becoming too strong. Hans Werner Sinn, president of the ifo Institut economic research think tank in Munich, said he believed the euro's average value next year would rise to 1.33 dollars, compared with the 2004 average of 1.24 dollars. "The European Central Bank should intervene," Sinn said, citing the dangers to Europe's economy from a strong euro and saying that exchange rate fluctuations had become too great on currency markets. Sinn said ECB intervention to curb the euro's rise could succeed as long as the United States did not take action in the other direction. His comments came at a press conference previewing the outlook for the German economy in which he said ifo Institut was lowering its growth projection in 2005 to just 1.2 per cent, from its previous forecast of a 1.4 per cent rise in gross domestic product (GDP). He said that Germany continued to lag behind the rest of the world in getting its economy moving again. "The world economy is booming like never before in the past 28 years, but Germany is not going along," Sinn said. While the world economy is seen growing 5 per cent in 2004, Germany's growth would weigh in at 1.7 per cent, and that only due to more favourable calendar factors. "The times when the economy in Germany can grow by 2 per cent or more are, in our estimation, over," he said. "Germany is having a tougher time coping with globalisation than other countries." --more 1538 Local Time 1238 GMT
