Brussels, 27/05/2004 (Agence Europe) - Ministers of the economy and finance in EU Member States will be discussing on Wednesday in Luxembourg during a working lunch, the economic consequences of oil price rises. It is not being ruled out that Euro zone ministers discuss this subject on Tuesday during the Eurogroup meeting. Member States fear that developments involving the price of oil will have a negative impact on business in the world.
According to an information note from Commission for Energy Loyola de Palacio, submitted to other members of the European Commission, a rise in the price of crude oil of 25% in 2004 could reduce economic growth in the Euro zone by 0.2% and cause inflation to rise by 0.2% in the same year. De Palacio pointed out that the EU did not have the means to respond in a coordinated way to managing this crisis (EUROPE yesterday p 6).
EU oil stocks are sufficient
The EU group of oil experts, which met on Wednesday, noted that the fifteen long-standing EU Member States currently have strategic oil reserves that are largely sufficient compared to their Community obligations, as they all have a reserve of more than 90 days, Community sources told EUROPE. The ten new Member States are not as affected by this obligation as they benefit from transitional periods (except Hungary, which already has stocks equivalent to 90 days consumption) before having to comply. The three Baltic States (Estonia, Latvia, Lithuania), whose oil reserves are at the lowest level, have from end 2005 to 2009 to comply. National oil experts, moreover, shared the analysis made by Loyola de Palacio on the negative impact that a sharp rise in oil prices could have on the European and world economy.