FRANKFURT - The euro-zone's debt crisis has "deteriorated" in some member states, and "rapid" commodity price inflation must not be allowed to filter through to wages, Estonia's central bank, whose Governor Andres Lipstok sits on the European Central Bank's Governing Council, said Wednesday.
"Debt-crisis related problems in some euro-area member states are still on the agenda and have even deteriorated," despite a pick-up in economic growth in most European Union countries at the end of 2010, the Bank of Estonia said in its economic policy statement.
The bank warned that inflation in Estonia and the euro-zone has been "rapid" in recent months, mostly due to higher food and commodity prices globally.
"Looking ahead, it is very important to avoid the pass-through of commodity prices, since this would harm the competitiveness of enterprises," the bank said.
Still, external risks to Estonia's financial stability from the ongoing debt crisis "have not changed" since late autumn 2010, according to the bank.
The disclosure of results from Europe's second round of bank stress tests should "help reduce the financing risks of banks", the bank said.