EU ministers keep up anti-inflation vigil

By Paul Carrel and Francois Murphy

BRUSSELS (Reuters) - European finance ministers got a taste from Spain on Wednesday of the economic slowdown they may all face in coming months, but inflation risks could prevent the European Central Bank from flying to the rescue.

"Nobody has inflation under control but we are very happy with the way the European Central Bank has been reacting," said Slovenian Finance Minister Andrej Bajuk, whose country holds the rotating presidency of the 27-nation European Union.

The ECB has resisted calls to consider interest rate cuts as a means of offsetting slowdown risks, but the political pressure to do so has given way in recent weeks to a less antagonistic appraisal of the ECB's inflation-fighting stance.

Bajuk chaired discussions on Wednesday where finance ministers took stock of growth prospects and risks from inflation, notably in food, fuel and other everyday costs.

Spain's national statistics office meanwhile revealed that a hitherto racy pace of economic growth decelerated abruptly in the first three months of the year to its weakest since 1993, a year of recession.

And the EU statistics office, which last week said retail sales slid for a second month running in March in the euro zone, published new data showing industrial production dipped too, by 0.2 percent from the previous month.

On Thursday, statistics offices publish reports on economic growth in the first quarter in Germany, France and other countries as well as the euro zone and wider EU. While the figures are tipped to be fairly good, forecasters believe a slowdown is already taking hold.

European Economic Affairs Commissioner Joaquin Almunia, also attending the ministerial meetings in Brussels, said as much on Tuesday, while German Finance Minister Peer Steinbrueck said the state of Europe was nothing like the flagging U.S. economy.