EU Commission kick the economy

EU member states are being urged to sign up to an economic recovery plan proposed by the European Commission.

Gathered in Brussels, the Commission unveil a new rescue plan ratified by the various EU's members. A plan which is supposed « to redore confidence of consummers and investors and prevent opportunistic actions between states which share much more than institutions » according to France and Germany's leaders.

Those measures consist on the one hand to a combination of tax cuts and targeted investment has to be co-ordinated across the 27. On the other hand to unfreeze 130 billions euros, about 1% of the EU member states' GDP.

France and Germany's leaders have called on the EU to ease fiscal rules to allow nations to spend more to boost their economies. A requirement to hold a public deficit below 3% of GDP should be eased, Nicolas Sarkozy and Angela Merkel said. By not spending their money, these last ones do not dig them deficits.

The Commission has suggested that tax cuts could be made on Value Added Tax, energy efficient goods and labour taxes, while the investment should be focused on construction and car makers. This one hopes it will have a much bigger impact on the whole economy of Europe.

France foresees to inject 19bn euros into some of its key industries - including construction and the car industry - to kick-start its economy. From his part, Germany annonced spending worth 32 billions euros over two years.

Pierre SANCHEZ

Benjamin DUCLOS