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Inflation effects trouble euro zone finance ministers

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Inflation effects trouble euro zone finance ministers

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Euro zone finance ministers, at their monthly meeting in Brussels, along with European Central Bank President Jean-Claude Trichet, have admitted that rising food and fuel prices are increasingly hurting the region’s households, but insisted that big wage increases are not the answer.

Eurogroup Chairman Jean-Claude Juncker said “Inflation is a major concern” and he added “people on average incomes are suffering more and more.” Junker said they can be accommodated without giving up on the main governing principles of wage moderation.

European Economic and Monetary Affairs Commissioner Joaquin Almunia, also said inflation was a “big concern.” But, like Juncker, he said big wage rises risk sparking broader, knock-on inflation.

The euro zone’s annual inflation rate was 3.3% in April, way above the ECB’s 25 target.