The chairman of one of Britain's biggest companies has warned the world is in danger of "talking itself into a recession."

Sir Martin Laing, who heads John Laing Construction, said there was no sign yet of a global recession, but too much talking could knock confidence and might lead to companies cutting back on investment.

His remarks come as head of the US Federal Reserve, Alan Greenspan, reported that growth rate of the US economy is near zero.

But many others remained optimistic about the prospects for growth in the European economy.

"Growth in Europe might be underestimated compared with the US," Bundesbank president Ernst Welteke said.

And the head of Germany's largest company agreed.

"I am very upbeat," Deutsche Telekom's Ron Sommer told the BBC. "It is a fair race [against the US] and it is a good one."

The World Economic Forum was meeting amid unprecedented security at the Swiss ski-resort.

Police and army units have sealed off the resort, fearing a repeat of the riots that dogged last year's meeting.

Need for restructuring

Meanwhile, delegates were warned that Europe must become more business-friendly if it is to compete with the US in a global market.

Attention focused on the pace of restructuring in the European economy - the many laws which make life difficult for businesses - and which has been seen as one of the factors which have made investors wary of investing in Europe and its weak currency.

"We need structural reform, there is no question about it," Mr Sommer said, citing problems with the 3G auctions of mobile phone licenses.

Michael Porter, professor of business administration at Harvard Business School said: "There is no question that the European companies are making progress and moving in the right direction. There is much more regulation in Europe, there are much more subsidies. There is still quite a way to go."

"In five years from now, I don't think we will be celebrating the victory of Europe over the US," he said, injecting a healthy note of scepticism into the debate.

Developing country plea

The leaders of developing countries have demanded a fair share of the benefits of globalisation, saying profits had mainly flowed to the rich industrialised countries.