The euro fell back against the dollar on Friday evening following a brief recovery, having earlier slipped in response to remarks by Italian Social Affairs Minister Roberto Maroni that Italy should consider re-introducing temporarily the lira alongside the single European currency.
The euro was trading at $1.223 in Europe, from $1.227 in New York on Thursday. It had earlier rallied following disappointing US jobs figures before falling back.
The single European currency earlier dropped to as low as $1.2220 after Maroni's comments in the Italian newspaper La Repubblica. Maroni is a member of Italy's euro-sceptic Northern League party, which is part of Italy's ruling coalition headed by Silvio Berlusconi.
In an interview with the La Repubblica, Maroni said the introduction of the euro had not been an adequate measure to tackle an economic slowdown and a decline in competitiveness in Italy. It would therefore be 'better' to temporarily have a dual circulation of the euro and the lira in Italy, he said.
The euro has suffered badly this week, sinking to $1.2160 on Wednesday - the lowest level since September 20 - in the wake of French and Dutch voters' rejection of the draft European Union constitution.
Maroni also said European Central Bank President Jean-Claude Trichet was one of those chiefly responsible for the 'disaster of the euro.'
The euro 'has proved inadequate in the face of the economic slowdown, the loss of competitiveness and the job crisis,' Maroni said. In this situation, the answer is to give the government greater power to defend national industry from foreign competition and 'to give control over the exchange rate back to the government.'
Maroni cited Britain as a virtuous example of a country whose economy 'grows and develops, maintaining control over its currency.
