June 2 (Bloomberg) -- European finance ministers pledged a coordinated response to the jump in oil prices to all-time highs, vowing not to repeat clashes over tax cuts when oil surged in 2000.

Crude oil futures leapt to a record $42.33 a barrel in New York yesterday, threatening to short-circuit the European recovery after the economy grew 0.6 percent in the first quarter, the fastest pace in three years.

Finance ministers said they have learned from mistakes made in 2000, when France and Italy, bowing to protests by truck drivers, broke with an EU consensus against cutting fuel taxes. Ministers didn't disclose what this year's policy will be.

``There's a common opinion that unilateral actions of countries are not helpful,'' Dutch Finance Minister Gerrit Zalm said after ministers from the 12 euro countries met late yesterday in Luxembourg.

Higher oil prices may shave 0.2 percentage point off European growth and add 0.2 point to inflation, the European Commission said. The commission forecasts growth of 1.7 percent in the euro region in 2004.

``The hope is that we won't see a repeat of the situation in 2000,'' French Finance Minister Nicolas Sarkozy said. ``We want to have a coordinated response.''

Ireland's Charlie McCreevy, the meeting's chairman, declined to say whether EU governments will cut taxes to cushion the impact of more expensive oil. The discussion will continue today with ministers from all 25 countries, he said.

`Thanks to Euro'

Several officials expressed confidence that the euro's resurgence against the dollar will prevent surging oil prices from accelerating inflation and halting the recovery.

``The euro is once more protecting our economies,'' EU Monetary Commissioner Joaquin Almunia said. ``Thanks to the euro, we aren't suffering the consequences so much,'' Belgian Finance Minister Didier Reynders said.

The euro has gained 3.6 percent against the dollar since April 25, cushioning the effect the 17 percent oil price increase had on European consumers in the same period. The euro rose 0.4 percent to $1.2239 yesterday and was recently at $1.2243.

Confidence among German, French and Italian executives fell in May, suggesting growth will slacken. Inflation jumped to a two- year high of 2.5 percent the same month, threatening to deter consumer spending.

``One has to be somewhat concerned as regards the influence on the economy,'' German Finance Minister Hans Eichel said. ``We will discuss this evening how we can counter this trend.''

The European Central Bank hasn't touched borrowing costs since June, when it cut its benchmark rate to 2 percent, the lowest in any euro country for six decades. Officials meet Thursday to set rates.

`Temporary'

``What we see now is more or less adequate -- the interest rates,'' Austrian Finance Minister Karl-Heinz Grasser said. Grasser and Spanish Economy Minister Pedro Solbes said the oil- induced jump in inflation will prove ``temporary.''

The European Commission yesterday left its economic forecasts for the next six months unchanged, saying growth will range between 0.3 percent and 0.7 percent in the second quarter and rise to 0.4 percent to 0.8 percent in the third.

Separately, the ministers discussed euro preparations by Latvia and Slovenia, two of the 10 countries that joined the EU last month. Previous meetings have focused on Hungary, Estonia, Cyprus and Lithuania.

None of the newcomers has applied ``at this stage'' to join the Exchange-Rate Mechanism, McCreevy said. Would-be euro users need to stay for at least two years in the system, which tests currency stability.

Today the ministers will also reprimand the Netherlands and Greece over their burgeoning budget gaps, urging tighter spending controls to prevent deficits breaching the EU's limit of 3 percent of gross domestic product again in 2004.

To contact the reporter on this story: James G. Neuger at jneuger@bloomberg.net.

Last Updated: June 1, 2004 18:35 EDT