Memo: Preparation of Eurogroup and Economic and Finance Ministers Council, Luxembourg, 6 and 7 October 2008

Eurogroup ministers will meet on Monday 6 October. Joaquín Almunia, Commissioner responsible for Economic and Monetary Affairs will attend as will European Central Bank Governor Jean-Claude Trichet. Ministers will discuss the economic situation, with particular attention to the financial market crisis. The economic situation and outlook for the euro area have turned exceptionally uncertain in the most recent weeks. The crisis in financial markets has deepened, with many key credit markets barely functioning and central banks having stepped up their efforts to avert a global liquidity squeeze. This comes on top of inflation pressure due to elevated commodity prices, notwithstanding the fall in inflation since August, and severe housing market corrections in some Member States. The Commission, on 10 September, revised downwards its economic growth forecasts for 2008. At the time it was stressed that risks to the growth outlook were on the downside. The dramatic events in financial markets in the last few weeks are reinforcing that view.