Euro zone ministers cut their economic growth forecast for 2005 to 1.3 per cent from 1.6 due mainly to a surge in world oil prices.
At the start of 2005, the euro zone was counting on growth of 2 per cent, the same as in 2004, but less than half of the rate of expansion of the world economy as a whole.
EU Economic and Monetary Affairs Commissioner Joaquin Almunia said he hoped the economy would pick up in the third quarter, and that a weaker euro will lift exports even if more expensive oil is raising energy costs. "I would like to see the oil price going down," he said.
Italy, the third biggest euro zone economy, is struggling with recession but its economy minister acknowledged that this was not solely a problem caused by oil prices.
"The price of oil of course has an impact on growth, but the impact is less in countries with low energy intensity, such as Italy," economy minister Domenico Siniscalco said.
"With our forecast of zero growth for this year, we are already very cautious. I don't think we will have to revise this," he said.