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EU launches three-pronged attack on economic crisis

EU launches three-pronged attack on economic crisis
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Europe’s economic rescue plan has consumers firmly in its sights, targeting as it does three basic areas of spending that dominate EU citizens’ daily needs.

Taking mainly the British lead as its model, but also drawing on several national plans, the first initiative is to encourage member states to cut sales taxes. Britain’s has already been cut to the lowest allowed under EU regulations, 15 percent.

The second initiative tries to tackle the housing and construction crisis, intimately linked with the credit market, a huge part of consumer spending, and a vital part of the jobs market and small to medium-sized companies. If unemployment can be staved off, full-blown depression could be avoided.

Carmakers will also get relief, further protecting jobs and export revenues, but investment capital released for them has strings attached to try and encourage them to green their industry.

Finally the European Commission’s proposal to relax the stability pacts’s three percent budget deficit limit has been taken on board, but the holiday will be a short one, as by 2010 governments will again be expected to toe the line.