The thirteen euro zone finance ministers, plus European Central Bank President Jean-Claude Trichet, have been meeting in Brussels to take stock of growth in their combined economy.
Trichet faces pressure to hold off on interest rate rises because of signs that euro zone inflation is easing off. Spain’s Economy minister, Pedro Solbes said: “In terms of inflation, I think that inflation is improving all over Europe, including countries such as Spain, which normally have a higher level of inflation than others.”
In January, euro zone inflation was 1.9%, that is in line with the ECB’s target of below but close to 2%. The prospect of higher ECB interest rates is boosting the euro against the dollar and particularly against the Japanese currency the yen, which last week hit a new all-time low against the euro. The finance ministers have repeatedly expressed concern about the yen’s weakness because it makes exports from the euro zone more expensive by comparison.