Commission creates EU recovery plan

AN EU recovery plan including measures to cushion the impact of the economic downturn on the real economy, and especially on jobs, is being drawn up by the European Commission.

Its proposals will include a doubling of money to help bail out countries suffering real hardship; the faster release of €350 billion in EU funds for investment projects and money to help retrain those who lose their jobs or want to start up their own businesses.

The proposals will be included in an EU action programme to be released on November 26 next designed to steer the European financial sector out of crisis. It will include new regulation and supervision for the banking sector and its contribution to a global response to the financial crisis.

Commission president Jose Manuel Barroso said lack of confidence was fuelling the collapse of stock markets and the real economy was suffering as a result.

“We must minimise the impact on jobs and prosperity and . . . help households across Europe and support those that have lost jobs”, he said, adding that all EU countries must work together on this.

He said that member states should give priority to reforms that bring down inflation and target support for the most vulnerable members of the population. They must also speed up agreement on climate change as this would grow new jobs.

The EU’s crisis fund of €12 billion should be increased to €25 billion, he said. Already €6.5 billion of this has been promised to Hungary as part of a €20 billion international rescue package.

Other EU countries could need similar funding, as they see a sudden drop in their rapid growth and an end to easy credit are the Baltic states.

He promised the Commission would release as efficiently and quickly as possible the €350 billion they have to invest in infrastructure and other projects over the next four years.

Economic Affairs Commissioner Joaquim Almunia said the European Investment Bank and the EBRD (European Bank for Reconstruction and Development) should be used more by member states and governments should also intensify their use of public private partnerships to create investment.