Agenda Ecofin: Hoge olieprijzen en Nederlands begrotingstekort (en)

The recent spike in oil prices and the related threat to the EU's economic recovery has blown more routine matters from the agenda of euro zone finance ministers who gather today (1 June) in Luxembourg.

The price of a barrel of crude oil has risen to above 40 dollars, driven higher by threats of instability in oil producing middle eastern countries. Suspected Al-Qaeda attacks in the world's biggest oil producer, Saudi Arabia, over the weekend has raised fears - and prices - even higher.

Higher oil prices lead to higher prices at the petrol pumps, which in turn drives inflation higher, which then threatens growth and Europe's nascent recovery.

Indeed, inflation amongst the 12 countries that share the euro is already at a two year high.

Ministers are set to be briefed at the meeting in Luxembourg on recent meetings of the G7 richest industrialised nations and Russia. The oil producing cartel OPEC was pushed to boost output, which would drive prices downwards.

Netherlands in the dock

The slight panic in the oil market has forced more mundane issues off the agenda - such as the monthly scrap over the euro rules.

Nevertheless, ministers will consider the case of the Netherlands which, after crying foul when France and Germany broke the rules, has moved into the deficit bad books itself as its budget deficit has breached the ceiling of three percent of gross domestic product.

The likely result is that ministers will rubber stamp the European Commission's decision to initiate the so called "excessive deficit procedure", which is the beginning of the punishment process for countries over the limit.

The European Union finance ministers are also scheduled to vote on Wednesday (2 June) on whether to implement a new savings tax system. But the final decision might be delayed by continuing problems with Switzerland.

The 12 ministers from the euro zone countries meet tonight and they are joined by the 13 remaining countries on Wednesday morning.