EU sticks to stimulus target

12th December 2008, Comments 0 comments

"In these exceptional circumstances, Europe will act in a united, strong, rapid and decisive manner..."

BRUSSELS - EU leaders have agreed to an economic stimulus package worth 200 billion euros to ward off the threat of a "recessionary spiral," according to draft conclusions of a summit on Friday .

Under the plan, member countries would pump on average the equivalent of 1.5 percent of gross domestic product (GDP) into their economies in order to temper the impact of a global recession.

"In these exceptional circumstances, Europe will act in a united, strong, rapid and decisive manner to avoid a recessionary spiral and sustain economic activity and employment," a draft of the summit conclusions said.

"It will mobilise all the instruments available to it and act in a concerted manner to maximise the effect of the measures taken by the Union and by each member state," it added.

In the run-up to the summit, Germany had expressed reservations about ploughing so much public money into the economy and resisted pressure to contribute more than what Berlin judged necessary to get the German economy going again.

Officials working through the night slightly revised earlier versions of the conclusions to say that the package should be worth "about" 1.5 percent of GDP rather than "at least" 1.5 percent as seen in an earlier draft.

A reference was also retained about allowing countries to reduce their sales or value added tax rates in order to boost spending, which Germany strongly opposed.

The draft agreement could be changed as EU heads of state and government discuss the measures on the second and last day of their summit in Brussels.

(AFP/Expatica)

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