EU rules to allow big borrowing on major projects

EU rules are to change to allow the Government to borrow large sums for major infrastructure projects.

The announcement is to be made today.

Previously, strict rules regarding Government accounts restrained projects such as the Dublin Metro and the Cork School of Music.

Yesterday, the EU Commission outlined plans to spend up to one trillion euro, despite demands for restraint from six leading contributors.

Announcing plans for the 2007-2013 budget, European Commission President Romano Prodi proposed spending 1.14% of the EU's gross national income, or just over €900bn, but these proposals were rejected by British, German, Swedish and Austrian finance ministers.

Commission documents showed overall planned spending commitments of more than one trillion euro, or 1.26% of gross national income, over the seven-year period, including spending by the European Development Fund.

Prodi also highlighted funds specifically allocated for education, research and training to assist the EU economy catch up with the US.