27 Nov 2008

Europe announces 200b euro recovery plan

6:33 pm on 27 November 2008

The European Commission has announced an economic recovery plan worth 200 billion euros which it hopes will save millions of European jobs.

The idea is to stimulate spending and boost consumer confidence by injecting more purchasing power into region.

Commission president Jose Manuel Barroso said the plan was "timely, temporary and targeted".

The EC expects member states to contribute 170 billion euros while the European Union will give 30 billion euros.

Mr Barroso said it was important that EU members acted together in a period of "exceptional crisis".

He said the bigger part of the package would be implemented in 2009, while some measures would continue into 2010.

The proposed plan will need to be approved at the next EU summit in December.

Earlier, Chancellor Merkel expressed concern about getting "into the race for billions" by unveiling huge stimulus packages.

Germany has already announced a package of measures to generate 50 billion euros in investment and contracts.

"We should walk a measured path and keep to the middle ground, which is made-to-measure for the situation in Germany," she told the Bundestag.

Other moves

France has announced a 19 billion euro injection into key industries

Spain has announced a fiscal stimulus package worth 40 billion euro, including 6 billion euros in tax cuts

Italy has annouced a stimulus package worth 80 billion euro but a large part of the money has been already received

Britain this week announced a fiscal stimulus plan worth Stg 20 billion including a cut in VAT.

Mr Barroso said that these plans were part of the Commission's recovery plan.