EU feels uneasy about soaring oil prices

The European Union (EU) ushered in the new year in an uneasy mood on Thursday after world oil prices touched 100 U.S. dollars a barrel one day ago.

“If this high level of (oil) prices maintain its way, it will have an impact on the (European) economy,” Amelia Torres, EU spokeswoman for economic and monetary affairs, warned at the first daily briefing of 2008 after week-long Christmas and new year vacation.
However, Torres declined to specify how the recent oil price move would affect the outlook of the European economy.

At the latest monthly meeting of EU finance ministers earlier December, EU Economic and Monetary Affairs Commissioner Joaquin Almunia suggested economic growth in the euro zone may slow more than forecast by the European Commission and drop below two percent in 2008 for the first time in three years, due to new developments in the oil markets and persistent financial turbulence.

“We are facing downside risks for our growth scenario,” Almunia said at that time. “With the present information our forecast would have lower figures for growth.”

Xinhua