EU ministers to review economic recovery plan

European Union finance ministers met in Brussels on Tuesday to discuss how to mitigate one of the bloc’s sharpest economic downturns in decades.

“We can’t avoid a recession, but we can try and limit it,” German Finance Minister Peer Steinbrueck said shortly after his arrival in Brussels.

On Monday, the European Commission issued fresh economic forecasts predicting a 1,8% drop in the EU’s GDP this year.

GDP in the 16-member eurozone, which excludes many fast-growing countries in Eastern Europe, is set to shrink by 1,9%.

Discussions in Brussels were set to focus on the implementation of the various economic recovery plans that have so far been put together by national governments.

Officials in Brussels say 18 such plans, totalling €190-billion over the next two years, have so far been submitted to the European Commission.

By far the biggest stimulus package, €82-billion spread over 2009 - 2010, belongs to Germany, the bloc’s largest economy.

Luxembourg Prime Minister Jean-Claude Juncker said after a euro group meeting held late on Monday that “no minister called for a further increase in the measures decided so far”.

But EU ministers meeting in Brussels were clearly concerned, with Austrian Finance Minister Josef Proell saying the feeling among colleagues was that “we are heading towards the peak of the crisis”.

According to the commission’s forecasts, EU GDP is set to move into positive territory again in 2010, but as many as 3,5 million jobs could be lost in the process.

Ministers also expressed disappointment that one of the underlying causes of the economic downturn—the global credit crunch—was still far from being resolved.

On Monday Britain’s third-largest bank, the Royal Bank of Scotland, announced possible losses for 2008 of €28-billion—the biggest in British corporate history, prompting the British government to launch a second multibillion-pound rescue package.

“Clearly, the necessary trust [in the financial sector] has not been restored,” Steinbrueck said.—Sapa-dpa



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