The European Commission said on Wednesday it will present late November an economic recovery plan with short-term measures to drag the economy from the verge of recession.
"We will bring forward, on Nov. 26, a comprehensive EU recovery plan, based on the framework we have approved today," the European Commission President Jose Manuel Barroso told a press conference in Brussels.
"That recovery plan will include targeted short-term actions to add to the medium-term reform agenda," he said as the fallout from the global financial crisis threatens to tip the 27-nation bloc into a recession.
In a four-pronged framework, the commission called for measures to help families and households across Europe, coordination and solidarity among member states, full use of flexibility allowed by EU rules and global governance.
Barroso said the top priority of the plan is to minimize the impact of the financial crisis on jobs, purchasing power and prosperity of EU citizens.
"We must keep unemployment to the absolute minimum and support those who have lost their jobs," Barroso said.
The EU chief acknowledged the main instruments for stimulating demand and employment are in the hands of EU governments, but he stressed there should be coordination at the EU level.
"Europe must confront the economic downturn with the same robust and coordinated approach we have taken on the financial crisis," Barroso said.
In the spirit of solidarity, EU governments agreed late Tuesday to lend Hungary 6.5 billion euros (about 8.1 billion U.S. dollars) in a joint bid with the International Monetary Fund (IMF) to help the country deal with the financial crisis.
Barroso said the EU stands ready to provide substantial medium-term financial assistance to other member states experiencing balance of payments pressures or serious financial stability risks.
EU Economic and Monetary Affairs Commissioner Joaquin Almunia told the same press conference that he had made a proposal to raise the maximum EU aid to member states facing financing troubles to 25 billion euros.
Under current rules, the EU can only provide as much as 12 billion euros in the form of so-called medium-term financial assistance facility to help non-euro member states stabilize their economies before they adopt the single currency.
Almunia warned the EU is now not only facing a financial crisis, but a mounting threat to the real economy.
"We are now facing not only a financial crisis but a serious slowdown in our economies that is hitting households, businesses and jobs," he said.
Almunia advised EU countries to use a combination of monetary and fiscal policies to support their economies, noting the EU budget rules do contain flexibility for member states to use in times of serious slowdowns.
"Given that inflationary pressures are now easing, monetary and fiscal policy can contribute to supporting demand," he said. "... Member states can now use the room for maneuver they have created ... to cushion the impact of the crisis."
Echoing Almunia, Barroso said EU countries should use to its full potential the flexibility that exists within the EU fiscal discipline, as well as within the competition, state aids and internal market rules.
In the fourth part of the framework, Barroso said the EU should work to improve cooperation and coherence at international level.
"When you have global interdependence, you need global governance," he said.
Pushed by the EU, leaders from world's major economies were due to meet in Washington on Nov. 15 in a bid to reform the global financial system.
Barroso said the summit must deliver the first results so as to rebuild a climate of confidence, which is part of the solution to the current crisis.
He called on the IMF to be prepared to intervene with emergency financing as there were signs that the crisis is spreading to emerging markets.
Meanwhile, Barroso warned the global financial crisis could not be used an excuse for protectionism.
"Trade barriers shut out prosperity and open the gates instead to short-term, economic populism. So yes to pro-activism, but no to protectionism," he said. (1 U.S. dollar = 0.8025 euro)
Source:Xinhua
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