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Rising oil prices, euro rate worrying: Solbes

MILAN: European Economic Affairs Commissioner Pedro Solbes said in an interview published on Sunday that the rising price of oil and the euro's exchange rate were worrying, but he still expected inflation to slow in the second half of this year.

Asked about inflation and a possible rise in interest rates, Solbes told Italy's Il Sole 24 Ore newspaper: "It is useless to deny that the behaviour of oil prices and of the euro dollar exchange rate worries us. But in both a trend of stabilisation can be seen."

"After the rise in inflation in the first half, there should follow a slowing in the second half. In November we forecast an annual rate of 1.5 percent for this year. I am convinced that it will remain anyway below the European Central Bank's two percent target," Solbes was quoted as saying.

Asked whether he expected a rise in euro-zone interest rates, he said: "That is a decision for the ECB, but we know that the behaviour of inflation plays a central role."

Solbes said it was important for euro-zone countries to maintain strict public finance policies, though efforts in that direction had already helped boost growth.

"In November, when we put forward a forecast for (GDP growth) of three percent for this year and next, people said we were too optimistic. Today they accuse us of the opposite. I am convinced that that target will be reached very comfortably," he said.-Reuters