EU members wrangle over economic stimulus package
21/11/2008 17:38
European Union member states are disputing the 130-billion-euro economic
stimulus package being developed by the European Commission.
The plan, aimed
at helping the 27-nation bloc save its real economy, is expected to be unveiled
Nov. 26 and discussed at the EU summit next month.
German weekly magazine Der
Spiegel reported earlier that as an important step to cope with the current
global economic crisis, the EC has called on each of its members to contribute 1
percent of their gross domestic product (GDP) to the program.
Spanish Prime
Minister Jose Luis Rodriguez Zapatero said today that his country was ready to
comply with the request.
"We are going to unite efforts, combine plans and, I
hope, give a strong and combined response," Zapatero said.
Ewald Nowotny,
governor of the Austrian central bank, told the Financial Times that he favored
a coordinated European expansion program equivalent to 1 percent of countries'
GDP.
Germany's stronger finances meant it could contribute 2 percent of GDP,
he said.
However, Germany said it saw the package as a coordinated summary of
national stimulus programs, rather than a wide-reaching supplement to which
member states had to contribute new funds.
According to the dpa reports,
German Chancellor Angela Merkel's spokesman Ulrich Wilhelm said a program of tax
rebates, soft loans and handouts worth 32 billion euros (US$40 billion) that
already has been approved by Berlin should be counted as part of the plan.
He
said that the fiscal stimulus approved so far was pumping 1.3 percent of GDP
into the economy.
In addition, as the Czech Republic has been less affected
by the economic crisis than other EU nations, Czech Finance Minister Miroslav
Kalousek also has no interest in the program.
"For the time being I do not
have detailed information about this proposal. But I am not sympathetic to it,"
the daily Hospodarske Noviny quoted Kalousek as saying.
EC President Jose
Manuel Barroso said any criticism of the plan was premature as it has not yet
been finalized and no agreement has been reached on the size of the
stimulus.
The program will be "timely, targeted and temporary," he
said.
"What we need is a coordinated European Union response, big enough,
bold enough to work in the short term, yet strategic and sustainable enough to
turn the crisis into an opportunity in the longer term," he told reporters in
Brussels.
An economic forecast released by the European Commission earlier
this month showed the eurozone economy is likely already in recession, while the
whole EU is expected to be in recession by the end of this year.
For 2009,
both the eurozone and the EU economy could barely grow, with an annual growth
rate of 0.1 percent and 0.2 percent respectively.
Xinhua
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