Ecofin watches war’s effects

EU finance ministers said on Saturday that they were following developments regarding the war in Iraq but that it was still too early to draw any conclusions from it. Although there did not appear to be an immediate threat regarding inflation, deflation and high oil prices, they said there was no room for complacency. «Our meeting was overshadowed by the developments in the war in Iraq. We discussed the issue and ascertained many common points. The EU needs a single voice so as to be effective. In the current circumstances it is difficult for us to make a full estimate of the economic consequences of the war,» Finance Minister Nikos Christodoulakis, who chaired the Ecofin meeting in Vouliagmeni, near Athens, said on Saturday. Among the issues agreed on, the ministers said they would propose to their heads of government to keep European Central Bank governor Wim Duisenberg at his post until a replacement is found. Duisenberg was due to retire on July 9. Regarding the war, Christodoulakis said that right now the primary concern was to provide humanitarian aid. «After this comes the phase of reconstruction, over which we had a first exchange of opinions. We will discuss this at following meetings as well,» he added. The European Union is pressing the United States to give the United Nations a primary role in Iraq’s reconstruction. «Oil prices do not appear to be a cause for alarm right now,» Christodoulakis said. «Inflation is not a problem right now but there is no room for complacency. We need reforms for the better functioning of markets, especially the labor market. Also, we do not face a problem of deflation, either at the European level or of any single country,» he said. «We are watching developments closely and are ready to cooperate and take action if necessary.»