German Economy Minister Wolfgang Clement said today the economic impact of the euro's current strength was being overstated and that were also some benefits.
"Although it makes things difficult for the export economy . . . there are also advantages," Mr Clement told reporters, adding the weaker dollar would make imports cheaper.
The euro extended its gains against the dollar in European trade on Friday, hitting new four-year highs above $1.1030 on mounting conviction that a US-led war against Iraq was imminent.
Mr Clement said earlier this week the euro's strength could become "critical" for German exports.
Economists say the appreciating euro could be particularly worrying for Germany, which is the world's second-biggest exporter and relies on strong overseas sales to support growth, while domestic demand is stagnant.