The EU is putting the final touches to a co-ordinated economic stimulus package, designed to limit the worst effects of recession for member states.
The bloc will unveil wide-ranging plans tomorrow, predicted to include measures on government spending and tax relief.
It has been suggested the European Commission will urge states to follow the UK’s lead and cut sales tax to encourage consumers to keep shopping.
“We need a common strategy to create the right conditions for economic rebirth. Above all, the plan must limit the impact of the financial crisis on individuals, on households, workers and business leaders. The plan must mobilise all means possible, financial, structural and legislative, at the European and national level, in a co-ordinated effort.”, Commission President Jose Manuel Barroso told a meeting last week.
The entire stimulus package is projected to be worth no less than one percent of the bloc’s GDP – or 130 billion euros. However, experts say there is little chance of a co-ordinated cut in sales tax, because Germany and France are against the idea.
The plan will also focus on specific industries hit hard by the crisis, like vehicle manufacturers, with proposals to boost the development of green transport.
And it is likely to include proposals to step up the allocation of EU funding for poorer regions and to help people get back to work.