Consumer price inflation in the 17 nations sharing the euro fell to 2.4 percent year-on-year in May from 2.6 percent in April, the EU's statistics office Eurostat said on Thursday. Economists polled by Reuters had forecast inflation of 2.5 percent.

It was the lowest level since February 2011, albeit still above the ECB's medium-term target of close to, but below, 2 percent.

The ECB meets next Thursday for its June interest rate decision and a majority of economists predict a rate freeze until the end of 2013, although a growing minority see a rate cut before the end of this year.

Spain, weighed down by troubles in its banking system and heavily indebted regions, has called on the ECB to revive its bond-buying program to help buy some time, but the call has fallen on deaf ears so far.

ECB President Mario Draghi urged European leaders to clarify their vision for the euro quickly or risk disaster, saying the ECB could not fill the policy vacuum.

Draghi told the European Parliament on Thursday that the bloc should err on the side of doing too much to bring an end to more than two years of euro zone debt crisis.

Economists have expected price rises to ease steadily as the economy stumbles and to offer some relief to households at a time of rising unemployment and sharp spending cuts. Oil prices have slipped almost 20 percent since early March highs.

According to the European Commission's economic sentiment survey on Wednesday, selling price expectations decreased significantly in all business sectors and consumer inflation expectations dropped to a 16-month low.

Inflation in Germany and Spain fell below 2 percent this month and in Belgium slipped below 3 percent for the first time in a year and a half.

(Reporting By Philip Blenkinsop; editing by Rex Merrifield)

• A Permanent Economic Emergency