The Euro Decline Has Benefits

The euro's sharp slide, which saw it hitting a four-year low yesterday against the dollar, should provide a welcome boost to eurozone exports and growth in the coming months

In Spain, exporters and the tourist businesses that depend on British and other visitors from outside the eurozone welcome any fall in the euro.

Bad news for Europe, good news for U.S. tourists

"The power of the pound is good for the tourist sector," said Pedro Iriondo, president of Mallorca's tourism development association, a private sector group. "As always in the tourism business, when the currency of the destination falls against the currency of the visitors, they have more buying power." However, The Pound also declined 0.6% against the Euro yesterday, as investors brace themselves for drastic public spending cuts, as officials attempt to rein in the biggest budget deficit amongst the Group of Seven nations.

In Spain, Portugal and Greece, the countries hardest hit by the crisis, exports beyond the eurozone are relatively unimportant as sources of growth. A weaker currency would help, but "it is not a get out of jail free card", said Gilles Moec, European economist at Deutsche Bank.

Excerpts from The FT and TorFX