EU's Almunia: Effective value of euro out of line

(For more stories from the Tokyo G7 meeting click [G7/G8])

TOKYO, Feb 9 (Reuters) - The value of the euro after adjusting for price differences is out of line, European Union Monetary Affairs Commissioner Joaquin Almunia said on Saturday.

"Up to now I think in general terms that the appreciation of the euro was more than made up for by growth in world trade," he told reporters before heading into a Group of Seven finance ministers' meetings in Tokyo.

"At the same time, it must be said that looking at the developments in the effective exchange rate of the euro ... it has reached a level we can consider is above equilibrium level," Almunia said.

Europeans have grown increasingly concerned that the rising value of the euro would hurt their international competitiveness. The currency has taken the brunt of the U.S. dollar decline and it has taken pressure from relatively fixed exchange rates in Asia, particularly China.

The euro has soared above 1.48 <EUR=> against the dollar and currently is up 11.5 percent from year-ago levels. The trade-weighted euro, which reflects its value against the currencies of its major trading partners, also has jumped to a record high this year and now stands at 111.15 <EUREER=ECBF>.

Europe had wanted to persuade its allies at the Tokyo meetings to put stronger language on currency movements in the G7 policy statement.

But hopes for language to calm the euro's advance were dashed when the United States embarked on aggressive monetary and fiscal policies to wrench its economy from the jaws of recession.

A G7 source told Reuters that finance ministers and central bankers were likely to stick close to previous language on currencies when they release their communique later on Saturday. (Reporting by Brian Love)