London: The euro went down to a 21-month low against the US dollar on Wednesday before the EU meeting began.
The decline has caused investors to be vigilant but doubtful that leaders would come up with a solution to cleanse the debt-stricken euro zone.
An informal EU summit, set to discuss factors which should measure growth in the debt crisis, is not expected to produce any positive outcome since Germany remains steadfast against joint euro bonds.
Francois Hollande, with his call to action on the growth fund has garnered support from other EU leaders. Unlike former president Nicolas Sarkozy, who in the last two years met German Chancellor Angela Merkel to set up a strategy, much to the criticism of other leaders, Hollande is set to go up against Merkel whose priority remains structural reform and budget austerity.
However, the major issues govern implementing ways to resolve the universal debt, tackling the increase banking problems which ails European economies and pushing through structural reforms to labour markets and pension systems that could make EU economies competitive and sustainable.
The euro slumped to USD 1.2615, dropping below the 2012 low of USD 1.2624 set in January, its lowest since August 2010.
With Agencies Input
First Published: Wednesday, May 23, 2012, 15:32