A strong euro is protecting European economies from the effect of high oil prices and will make the region's exporters more competitive in the long run, the European Investment Bank (EIB) said yesterday.

"It's a kind of invisible protection for us [from high oil prices] and at the very same time it requires from our economic system more competitiveness," said EIB vice-president Mr Philippe de Fontaine Vive.

In the short term, he said, the strong euro was putting pressure on European exporters.

"But in the long run that's a very good discipline in a competitive world."

Oil prices hit record highs recently, spurred partly by fears of attacks on oil terminals in the conflict-torn Middle East.

Meanwhile, the euro has been trading near its strongest levels against the US dollar since early April. - (Reuters)