The fact that the price of crude oil finally has broken the symbolic barrier of USD $100 a barrel in early 2008 is an unwelcome yet significant New Year present'. Analysts have long weighed up the effect of such rising energy prices on the EU (See Europolitics 3437). The EU Commissioner Joaquin Almunia admits 'upside risks' to his baseline scenario from oil-price 'hikes' combined with a range of other factors from turbulence in the financial markets, the US slowdown and - biofuel induced? - food price increases. The rising oil price is also working its way into the EU's total energy bill with gas prices, for instance, being linked by contract to the price of oil. Gazprom is already rubbing its hands with glee at substantially higher gas...

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