Luxembourg / Brussels, 18/07/2000 (Agence Europe) - Eurostat, the EU's Statistical Office, last month announced that inflation rose to reach an annual average of 2.4% in the euro zone (as opposed to 0.9% one year earlier and 1.9% in May) and 2.1% in the EU as a whole (against 1% one year earlier and 1.7% in May). The differences are, however, considerable from one Member State to the next: the United Kingdom was at 0.8% in June, Sweden 1.4%, France 1.9%, Germany 2% (all below the average), whereas the rate was 5.4% in Ireland, 4.4% in Luxembourg and 3.5% in Spain.
The Commission, however, states that the situation should not be over-dramatised. If one excludes energy (and therefore the rise in oil prices) the average rates are 1.2% in the euro zone and 1% in the EU as a whole. The Commission spokesperson, however, recognises that the rise in inflation has also structural causes and stresses that the Eurogroup decided, on Sunday, to strengthen budgetary consolidation and accelerate structural reforms (see yesterday's EUROPE, pp.7/8). Any reduction in taxation must go hand in hand with reduction in public spending. The European Central Bank (ECB) maintains the aim for the euro zone of a rate of inflation not exceeding 2% during the current year.