Merkel Says Euro Crisis an Existential Test

As Euro vs. Dollar exchange rate sharply dropped this morning reaching to 1.25964 Germany's Chancellor Angela Merkel spoke and said that the crisis of the Euro is "an existential test and must be managed."

"The crisis of the future of the euro is not a crisis like any other, this is the toughest test passed by Europe since 1990 except for 35 years," said Chancellor German. Merkel called Thursday, May 13 to defend the euro and stressed that the difficulties of the single currency was a test for the future of the European Union.

"The crisis of the future of the euro is not a crisis like any other, this is the toughest test passed by Europe since 1990," said Angela Merkel in a speech broadcast by the WDR. "This test is existential, it must be managed successfully," she said in a ceremony in honor of the Polish Prime Minister Donald Tusk, who won the Charlemagne Prize for his work for European unity.

This morning Euro fell further against the U.S. Dollar settling just below 1.26 dollars vs one Euro. On Monday one Deutsche Bank analyst Thomas Mayer said he thinks Euro and Dollar may even reach parity at some point. However, Mayer said he thinks Euro may find some stabilization point at 1.20 dollars against Euro.

When Euro was introduced first, the party vs U.S. dollar was set at 1.16. Then it fell sharply against the dollar to the level of 0.86 cents per one Euro.

On Monday Euro jumped up against the Dollar again. This happened after the EU leaders introduced the $970 billion aid plan. However, once the investors realized that there is no information about the details of implementations doubts started to take over the markets and since then Euro has fallen to below 1.26 dollars vs one Euro.