"The inflation figure was 3.7% in the euro area and 3.9% in the EU as a whole," said the Commission's spokesperson for Economic and Monetary Affairs, Amelia Torres, adding that "it is going up" and that inflation was the Commission's main economic concern at the moment.
According to Eurostat, the main factor for inflation is increasing energy prices. Compared with May 2007, fuel for transport was 14% more expensive in May 2008. Another major factor weighting heavily on the inflation rate was the increase in food prices, in particular milk, eggs and cheese, the prices of which increased some 14% in the last 14 months, said Torres.
She said these were not good figures and that EU needed to "remain extremely careful in order to avoid a wage and inflation spiral".
The lowest annual rates are observed in the Netherlands (2.1%), Portugal (2.8%) and Germany (3.1%), and the highest in Latvia (17.7%), Bulgaria (14.0%) and Lithuania (12.3%). Compared with April 2007, annual inflation rose in 21 member states, remained stable in three (Slovenia, Poland, Malta) and fell in two (Estonia, Romania).
Currently, none meet the EU-wide target of maintaining inflation below 2%.
Meanwhile, angry farmers, fishermen and truck drivers are protesting throughout Europe, arguing the rising fuel prices are more they can bear while petrol companies skim additional profits.
On 16 June, the International Road Transport Union (IRU) called for governments to cut excessive fuel taxation, arguing they are simply using it "as a source of easy revenue for the state" and that without it the oil price would be cheaper. "There is no excuse for maintaining excessively high fuel taxes that artificially distort the price paid at the pump, just at a time when our economies need help most," stated IRU.
After fishermen in early June, truck drivers and farmers are set to protest in Brussels tomorrow (18 June) ahead of the 19 June EU Summit which is set to discuss the rising commodity prices.
The EU's hands are tied, however, because the prices are largely driven by increased demand and speculation taking place outside its borders. The potential for macroeconomic measures is also limited, because the record inflation limits the European Central Bank's (ECB) leeway for any potential rate cuts. Indeed, the ECB's President Jean-Claude Trichet has signalled a rate rise is likely next month.
