In March, consumer price growth in the euro zone again set a new record. Compared with February, goods rose by 1%, and year on year – by 3.6%. Fuel and food are the driving force behind inflation. Brussels fears the inflationary spiral, when wage indexation only leads to faster prices. The representative of the European Commission Amelia Torres says:
“It is very important that the increase in consumer prices does not affect the rest of the tariffs. That the inevitable increase in the level of salaries is related to the growth of labor productivity. Otherwise, we will find ourselves in a situation of an inflationary spiral with all the ensuing dire consequences.”
Inflation in the euro area countries exceeded 3% in December last year and has been growing steadily since then. March statistics, however, nullifies the chances that the European Central Bank will lower base rates on the euro in the foreseeable future. Despite the global credit crisis and economic downturn, the department of Jean-Claude Trichet considers the fight against inflation as its priority, which requires a high cost of replacement funds.