ECB President Wim Duisenberg said after the meeting that dealing with unemployment was not the job of the new central bank.

"Dealing with structural problems is the task of policies other than monetary policies," he said.

But he confirmed that, with rate cuts on Tuesday by Portugal and Spain, that the average interest rate in the euro area is continuing to trend downwards.

Portugal's interest rates are now 3.75%, while Spain's are 3.50%. The Swedish central bank also cut interest rates, although Sweden does not intend to join the euro in January.

Many EU governments hope that low rates will prevent an economic slowdown, in the face of the turmoil on the world's financial markets. From January 1999 onwards the ECB will be responsible for setting interest rates for the whole "eurozone" of the eleven EU countries joining the single currency.

Several central banks - the Bank of England and the US Federal Reserve among them - have recently begun cutting interest rates.

The ECB is expected to set a rate of 3.3% - the current level of rates in the eurozone's main economies, Germany and France.

This rate level is far below that of the United States and most European countries, the UK included.

Nonetheless, many governments hope that even cheaper credit will boost the economy and that this in turn will translate into more jobs. Favouring job-creation over inflation-busting, they have been urging the central bankers to set low interest rates.

Oskar Lafontaine, Germany's new finance minister, reiterated his calls for rate cuts on Tuesday, but stressed that he would not infringe the ECB's independence: "I don't want to put anyone in the ECB under pressure. The only people under pressure are those without a job."

The ECB is an independent institution, tasked to keep inflation low. Experts say its credibility with the financial markets could be at stake if the bank gives in to political pressure even before the single currency has been launched.