France's Lagarde says euro rise excessive - paper

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TOKYO, Feb 9 (Reuters) - The current strength in the euro is excessive and undesirable as rises in the European single currency hurts the competitiveness of French firms, French economy and finance minister Christine Lagarde was quoted as saying on Saturday.

"Because of the euro's rise, French companies are losing their competitiveness against firms outside Europe, such as those in the United States and the Middle East, causing the problem of expanding France's trade deficit," Lagarde told Japanese business daily Nikkei in an interview.

"The current strength in the euro is excessive and undesirable. Europe as a whole is on heightened alert."

The interview was conducted in Tokyo on Friday and her comments were translated by the paper into Japanese.

Croup of Seven finance ministers and central bank governors are gathering in Tokyo on Saturday to discuss the global economy amid U.S. recession fears, international market turmoil and exchange rate swings.

The euro edged up 0.2 percent on Friday to $1.4505 <EUR=> but was fell 2 percent for the week, the largest weekly decline in 1-½ years.

Market analysts saw the euro weakening more in coming days on growing expectations the European Central Bank will cut interest rates later this year despite stubborn inflation pressures.

Lagarde also said it was time to review the supervision system of global financial market.