Soaring inflation is becoming a risk to the 13 nations sharing the euro as they struggle to cope with slower economic growth, the chairman of eurozone finance ministers meetings said Monday.
"We cannot ignore increasing inflation risks," Luxembourg Finance Minister Jean-Claude Juncker said as he arrived to chair a meeting with his eurozone counterparts.
"The economy is robust but slowing down a bit; we have to face these risks," he said. According to official EU data on Friday, inflation in the eurozone rose to 3.0 percent in November, the highest in more than six years and well above the European Central Bank's preferred level of close to but less than 2.0 percent.
The ECB faces a growing dilemma over keeping prices under control without weakening the economy as it struggles to cope with financial market volatility, record oil prices and a strong euro.
Dutch Finance Minister Wouter Bos also sounded the alarm about inflation, saying that it was probably the biggest threat to growth but added that "it's not one we can't beat." Cypriot Finance Minister Michalis Sarris said that higher inflation was a broader worldwide trend, driven by soaring commodities prices, liquidity in the global financial system and rising prices and incomes in China.