Morning:
8°c
EC calls for £170 billion from members to stave off crisis
Hugo Duncan26.11.08
Europe today stepped up the global fight against recession by calling for a co-ordinated €200 billion (£170 billion) rescue package across the Continent.
The European Commission urged member states to plough funds into their economies to stave off a prolonged and nasty downturn.
Countries including Britain, Germany and France have already announced fiscal stimulus plans of their own and the EC wants other nations to follow suit.
EC President Jose Manuel Barroso said the plan was "timely, temporary and targeted" and that it was important EU members acted together in a period of "exceptional crisis".
It is hoped the plan will save millions of jobs across the region. Barroso said: "Measures that member states are introducing should not be identical, but they need to be co-ordinated. It's the best way to restore citizens' confidence and counter fears of a long and deep recession."
The EC called on nations to invest a total of €200 billion, or 1.5% of EU gross domestic product - more than the €130 billion initially mooted.
The Commission expects €170 billion to be provided by member states, while €30 billion will be provided by the EU.
In Britain, Chancellor Alistair Darling outlined a £20 billion fiscal stimulus for the UK including a cut in VAT in the Pre-Budget Report on Monday. Germany, France, Spain and Italy have also made proposals.
The Europe-wide package must be approved when leaders gather in Brussels for a summit on 11 and 12 December, although it will have little impact on Britain as it has already fulfilled the main aims of the plan.
The Treasury today said it showed plans unveiled in the PBR had the backing of Europe. The stimulus proposed in Europe, along with a fall in revenues and rise in spending that accompany an economic slowdown, is likely to lift deficits in many nations, including Britain, to well above the ceiling of 3% of GDP.
Reader views (1)
This strikes me as having all the potential of another EU power grab . First , it is a matter of deciding if the EU has such a competency at all , or whether measures such as those proposed are purely in the remit of national governments .
The trust issue that has taken such a central role in this economic crisis also applies to perceptions as to the ability and the genuine motives of politicians . There are many who doubt that the EU are at all capable of effectively pursuing such a policy to a successful conclusion even if they had such legal competency .
One of the real problems with the EU is that so many distrust the motives of these bureaucrats because they lie , and are at best frequently exposed as incompetent .
This is a policy area for national governments and should remain so . We definitely shouldn't be giving the EU any more taxpayers money for any reason .
- Marcus J. Tyson, London
