Home Economy EU unveils $260-billion recovery plan

EU unveils $260-billion recovery plan


Brussels : President of the European Commission, the executive arm of the European Union (EU), Jose Manuel Barroso Wednesday unveiled a 200-billion-euro ($260 billion) economic recovery plan designed to help the 27-member bloc weather the recession.

The bulk of the money – 170 billion euros – will come from national governments, with the remaining 30 billion euros will be made available by the commission and the Luxembourg-based European Investment Bank (EIB), Barroso said.

The figure, which amounts to 1.5 percent of the EU’s gross domestic product, is higher than was previously anticipated.

Noting that the European economy was facing an “exceptional crisis” as a result of the global credit crunch, Barroso said the commission’s plan provided “an equally exceptional response”.

The head of the EU executive said his “bold” set of initiatives was designed to create millions of jobs and restore confidence amid fears of a prolonged recession hitting one of the world’s largest economies.

The plan, which must be approved by EU leaders meeting in Brussels next month, consists of a mix of tax cuts and higher spending.

The commission is also set to relax its strict rules on national budget deficits until 2010.