The Cabinet met yesterday to discuss the economy in light of imminent war in Iraq and Prime Minister Costas Simitis urged his ministers to fight a climate of «catastrophe that is being cultivated.» Simitis tried to calm fears that war could lead to emergency measures, but he admitted that there were problems that had to be confronted. «There are problems, doubtlessly, because of the international economic situation, because of the bad circumstances such as the rise in the price of oil and the recession in Western Europe which has had a direct effect on exports and tourism,» Simitis said, according to government spokesman Christos Protopappas. «But there is also an image of impending catastrophe that is being cultivated and which is false, without there being figures to justify this now,» Simitis said. Bank of Greece governor Nicholas Garganas, presenting the central bank’s quarterly monetary report, said the consequences of war would affect mainly tourism, industry and inflation, but the extent of the damage would depend on the duration and nature of the crisis. «Geopolitical uncertainties notwithstanding, it is possible that economic expansion this year will continue to be satisfactory, as growth relies on domestic factors,» Garganas said. «GDP is projected to grow by 3.7 percent.» The government forecast is 3.8 percent. Noting existing problems, Simitis said: «We have to provide the measure of the true situation, a situation which has problems with prices and with oil and concerns about tourism… But no one in the Cabinet believes that emergency measures are needed. But care, a sense of responsibility and seriousness are needed in dealing with a negative circumstance.» «We decided to forge an anti-inflationary front in a great effort to contain prices, especially in foodstuffs and services. Utility rates will not rise above the inflation rate. Transport invoices must be inspected to make sure there is no profiteering. We must examine ways to boost tourism, supporting it domestically if necessary. Exports must be promoted and, of course, if war causes special problems for sensitive sectors of the population, then special measures will be taken to support them,» Simitis said. National Economy and Finance Minister Nikos Christodoulakis announced a plan focusing on growth, fighting inflation and creating jobs.