Finance ministers, business and labour unions ramped up pressure on the European Central Bank on Tuesday to refrain from hiking eurozone interest rates to fight inflation, telling the ECB it risked stifling economic recovery.
Ernest-Antoine Seilliere, the head of the UNICE group that represents business at European Union level, told ECB President Trichet so at talks on Tuesday that also involved trade unions. But Trichet made no commitments, he said after the meeting.
"We will be saying to him very clearly that moving the interest rates upwards today would be a negative signal for European growth," Seilliere told a news conference.
Financial markets are increasingly convinced the ECB could raise its key interest rate - currently at a historic low of 2.0 percent, half the US level - as soon as December.
Seilliere said expensive oil had pushed up energy prices but inflation was otherwise contained and a rise in interest rates could lift the value of the euro, which many exporters believe is now at a level that makes their goods more competitive in world markets, after months of decline versus the dollar.
He was speaking as finance ministers of the 25 EU countries - 12 of them in the euro currency zone - met in Brussels for the second day of a regular gathering where Trichet was told bluntly that a rate hike was unwanted.
"We reminded the ECB it shouldn't take hasty decisions," Luxembourg's Jean-Claude Juncker said on Monday after chairing a meeting of finance ministers and Trichet.
Hans Eichel, about to be replaced as German finance minister in a new coalition that may raise value-added tax, told the ECB it would be going too far if it raised interest rates on the grounds that such tax increases could be inflationary.
"In my view, and I made this very clear last night, the response to this cannot be a tighter monetary policy from the ECB," Eichel said.
Spanish Finance Minister Pedro Solbes appeared hopeful that the ECB would hold back.
"I always listen to the president of the bank (ECB) and the bank has said yesterday that for the time being the rates are appropriate," he said.
Ministers from the rest of the 25-nation EU joined their eurozone colleagues on Tuesday and Trichet met business and union representatives separately.
The European Trade Union Confederation also made an appeal to the ECB to hold off.
ETUC said it too was worried a rate rise would damage growth and believed there that was no risk of wages soaring and causing inflation to snowball as the ECB fears, arguing that wages had been modest for a decade. Financial markets however remained set on the idea that a rate rise could come as early as the ECB meeting next month following a stream of recent comments from Trichet and other top bank officials about their readiness to act at any time.
Nicholas Garganas of Greece, a member of the ECB Governing Council, stressed the point on Tuesday.
"We will move on interest rates if we believe there are clear indications that inflationary risks are likely to materialise. That does not mean we will sit back and wait for inflation to rise," Garganas told Reuters in an interview.
The ECB wants to keep consumer price growth below, but close to 2.0 percent. Eurostat estimated the headline inflation rate in October of 2.5 percent, down from 2.6 percent in September, but still well above the ECB target. Growth in the eurozone is expected to hit a paltry 1.2-1.3 percent this year, even if there is a pickup in the second half that has yet to show through in earnest.