Economy and Finance Minister Nikos Christodoulakis, also current chairman of the European Union’s council of finance ministers (Ecofin), yesterday voiced strong concern over the economic outlook and recovery in 2003. «Uncertainty and the shaken confidence of consumers and investors do not leave much room for optimism,» he said during a speech at a conference organized by The Economist magazine on globalization and the role of Europe. «The impact of the turmoil (in Iraq) on the global economy cannot yet be accurately assessed… The risk of a prolonged conflict or even a wider escalation in the region is not negligible,» Christodoulakis said. His remarks came two days before a scheduled informal Ecofin meeting in Athens. He warned of a vicious circle of price and wage increases if oil prices remain at high levels for a relatively long period. Christodoulakis defended the fiscal constraints posed by the European Union’s Stability and Growth Pact against critics calling for a more expansive macroeconomic policy. He added that the EU needed to assume a leading role in the world economy. «The EU must transform itself into a dynamic union of states that have a voice not only in matters of monetary policy but international politics as well.» This requires expediting structural changes that have fallen behind in many sectors. Christodoulakis said the EU must tap into three new sources of growth in future: First, the consolidation of the single market; second, the twinning of knowledge and entrepreneurship in new technologies; and third, the process of globalization. «Globalization is often demonized, but when accompanied by appropriate mechanisms of control and supervision over capital movements and a socially oriented treatment of labor, it creates growth opportunities for all,» he said. An EU cooperating with other powers within the framework of international organizations can contribute to the lessening of the democratic deficits created by globalization, through its principles of competitiveness with social cohesion, improvement of productivity with the creation of more and better jobs, economic growth with respect for the environment, and national and cultural diversity in tandem with integration, Christodoulakis said.