Euro - Economy Straining the pact As France becomes the latest European country to cast doubt on its ability to balance its budget, Tony Barber and George Parker argue that electoral cycles may be accentuating the problem. |  Read Chirac accused of undermining the euro France was accused of undermining the euro and threatening a rift between smaller and larger EU countries, over its threat to renege on a deal to bring its budget deficit close to balance by 2004. Commission officials reacted angrily to President Jacques Chirac's threat, claiming the "misguided" tax-cutting programme could damage the credibility of the pact underpinning the euro. |  Read Recovery yet to buoy German labour market The number of Germans out of a job edged up in April, in a sign that a gradual pick-up in the overall economy is taking time to filter through to the jobs market. |  Read Warning on eurozone inflation The European Central Bank warned that eurozone inflation could remain higher than expected for the rest of the year, fuelling market expectations of a rate increase sooner rather than later. |  Read French consumer confidence falls to four-year low Consumer confidence in France fell in April to a four-year low on increased worries about declining incomes and lower savings. The monthly index of household sentiment released by Insee, the official statistics institute, dropped a full three points month-on-month to minus 18. |  Read ECB urged to rethink role of M3 growth The European Central Bank should abandon money supply growth as an instrument for setting interest rates, according to a report co-written by a former candidate for the ECB vice-presidency. |  Read German business index dents hopes of recovery The strength of Germany's economic recovery was thrown into question with the most important national business climate index showing an unexpected a fall in April. |  Read Four eurozone members warned on budgets The European Commission warned Germany, France, Italy and Portugal that it expected them to keep their promises and achieve budgets close to or in balance by 2004 at the latest. |  Read Eurozone recovery 'set to accelerate' The eurozone's fledgling recovery should accelerate in the course of the year, with economic growth reaching 2 per cent in the second quarter, according to a leading indicator produced for the Financial Times, FT Deutschland and Les Echos. |  Read Brussels warns eurozone recovery in 'infancy' The European Commission said that economic recovery in the eurozone was "still in its infancy" and could be jeopardised by higher oil prices - considerations that could make the European Central Bank less likely to increase interest rates. |  Read Two-speed eurozone economy contracts in Q4 The eurozone economy shrank in the final three months of last year, depressed by low investment and a weak industrial sector. But the decline in the region's economy was only modest, leaving economists undaunted in their prediction that the region is set for a pick-up this year. |  Read