EU's Barroso sees interest rates heading lower

PARIS, Nov 30 (Reuters) - Conditions are ripe for further interest rate cuts and the European Central Bank could be expected to take steps in that direction, European Commission President Jose Manuel Barroso said on Sunday.

"It is true that now the conditions are there for a drop in interest rates," Barroso told RTL radio.

"I am awaiting decisions from the European Central Bank that go in this direction," he said, declining to comment on the scale of a possible rate cut.

It was necessary to monitor economic developments, Barroso said, noting that deflationary fears now existed among some economists while inflation had been the overriding focus a few months ago.

ECB President Jean-Claude Trichet has said that the bank could cut rates in the coming week as long as there is evidence that inflation pressures have eased.

The ECB cut interest rates in October and November by 50 basis points each time to the current level of 3.25 percent.

A Reuters poll published recently showed that of 81 economists surveyed, 56 expected the ECB to cut rates by 50 basis points on Dec. 4, while 24 predicted a cut of 75 or 100 basis points. One analyst forecast a 25 basis point reduction. (Reporting by Tamora Vidaillet; Editing by Bernard Orr)