The inflation rate in the 17-nation euro area fell to 2.8 percent from 3 percent in November, the European Union’s statistics office in Luxembourg said in an initial estimate today. Euro-area services and manufacturing output contracted less than initially estimated last month and French consumer spending unexpectedly declined in November from October, separate reports showed.
The article claims that this gives cover to the ECB to further reduce interest rates and relieve pressure on the Mediterranean debtor states in Southern Europe.
It is unlikely, however, that it will be enough to offset austerity measures being imposed by Berlin Brussels.
