Greece economic issues cause Euro to slump to monthly low

• EURUSD exchange rate expected to reach 1.40 at the end of March

The Euro dropped against the dollar at the end of last week, due to the negative effect of Greece"s financial situation, which is struggling with a budget deficit equal to 12.7% of its GDP, causing fears it might default on its sovereign debt.

The Euro dropped 0.8% on Friday, on the American market, closing the day at 1.4387, down from 1.4499 on Thursday. On Friday, the Euro slid 1.1% - the largest drop since December 17th.

Analysts expect the Euro to drop to USD 1.40 by the end of the current quarter.

It is worth mentioning that last week the Euro lost 2.2% against the yen, after German chancellor Angela Merkel said that Greece"s budget deficit could affect the unified European currency, which according to her, is going through a difficult period.

• Juncker: "Greece won"t default or abandon the Euro"

Greece won"t go bankrupt due to its debts, says Jean-Claude Juncker, the leader of the group of minister of finance of the Eurogroup. He added that Greece won"t abandon the European currency.

The official of the Eurogroup said on Friday: "Two things aren"t going to happen: Greece won"t go bankrupt, but it will have to make enormous efforts. The second point is that the hypothesis that a country will leave the eurogroup or euro zone is out of the question. It"s absurd". Juncker stressed that leaving the Eurozone would cause unmanageable problems for Greece.

At the end of last week, Greece presented the European Commission with a three-year budget plan, which includes steps to shave 10 billion Euros (14.4 billion dollars) off the budget deficit in 2010.

Juncker said: "The proposed steps of the Greek government for the current year are a step in the right direction, but additional cuts are needed".

The so-called eurogroup of finance ministers from the 16 nations using the euro will discuss Greece at a meeting today (Jan. 18) in Brussels. Jean-Claude Juncker says that, at this reunion, the participants will warn the Greek authorities that they need to go further with a credible plan to consolidate their public finances.

The leader of the Eurogroup said: "Greece should not rely on its European allies for its rescue. It would be a mistake for it to expect other countries to solve its problems".

The Greek authorities, however, said they don"t need outside help and that they will take all the right steps to overcome their current situation.