European Commission claims surge in oil price threatens European economy

The European Commission said Tuesday the recent surge in oil prices threatens growth in Europe and may well be a blow to Europe's already faltering efforts to impose reforms designed to make Europe a more dynamic economy in the years ahead.

"The present very high oil prices are without doubt of concern to the European Union," EU Energy Commissioner Andris Piebals told a news conference at the European Parliament in Strasbourg, France.

He said the EU executive Commission was concerned rising fuel costs will impact adversely not only on the well-being of "EU citizens but also regarding their effect on economic growth," notably the ambitious goal to make the EU the world's most dynamic economy by 2010.

He called on EU governments to redouble efforts to achieve greater energy savings and step up the search for alternative sources of energy but acknowledged that will only have a limited effect.

"Although the priority must be to reduce demand and to shift toward alternative and cleaner sources of energy ... in both the short and medium term the world will need an increase in the supply of oil and gas and more refining capacity," Piebals was quoted as saying by the AP.

He called on EU governments to improve coordination of their oil supplies through the International Energy Agency.

Under EU law, all 25 members of the union must retain emergency oil reserves equivalent to 90 days normal consumption.