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EU presidency’s finance minister more concerned about economic slowdown

Portuguese Finance Minister Fernando Teixeira dos Santos said on Monday he is more concerned about the economic slowdown than inflation in the euro zone.

„I am more concerned with the slowdown in our economies. I think about inflation we have to wait and see whether this is just a peak in the data or if it is something more permanent. It is too early to assess,” said dos Santos, whose country holds the rotating presidency of the European Union. Economic prospects for the euro zone were markedly dampened by the ongoing turbulence on the financial markets, triggered by the sub-prime mortgage crisis in the United States in August, as credit conditions have significantly tightened, which makes borrowing more difficult. Investors’ confidence was also undermined due to the lingering uncertainty over the scale and location of losses. „We still have some losses to present when accounts come out and we know that there are some uncertainties in the extent of the losses to be reported,” dos Santos said.

Meanwhile, official figures from the EU showed annual inflation in the euro zone jumped to 3% in November, the six-year high since the circulation of euro in 2002, due to hiking oil and food prices. Economic slowdown and rising prices threw the European Central Bank into a difficult situation as to whether to raise its interest rate to curb inflation or leave it unchanged to support growth. (