BERLIN, Jan 6 - The chief economist of Germany's DIW economic think tank said on Tuesday the rise in the euro's exchange rate was threatening recovery in Germany and implied policy makers should react. Without citing specific currency levels, DIW's Gustav Adolf Horn wrote in Handelsblatt newspaper that the euro's rise was making life difficult for European, and especially German, firms by reducing their competitiveness on U.S. and other markets. "The main impetus for an economic recovery in Europe is coming from the global economy and this will be weakened by the euro's appreciation," Horn wrote. "Without deep reaching action from the economic policy side a self-sustaining upswing cannot get underway," he added. The exchange rate risk was doubly dangerous because the European Central Bank and fiscal policy makers had not done enough to stimulate domestic demand, he wrote. However, Horn added wage deals in Italy, Spain and the Netherlands had "certainly made an appropriate European monetary policy reaction more difficult". DIW is due on Tuesday to become the last of Germany's six leading economic think tanks to present revised economic forecasts. Der Spiegel magazine reported at the weekend DIW would cut its 2004 German growth outlook to 1.4 percent, compared with a 1.7 percent joint forecast made by the institutes in October.||