The European Commission approved on Wednesday proposals for an EU-wide fiscal stimulus package worth 200 billion euros ($260 billion) to revive the struggling economies of the 27-nation group, an EU source said.
The proposal by EU Commission chief Jose Manuel Barroso was backed during a closed-door Commission meeting and amounts to 1.5 per cent of the block’s gross domestic product (GDP) — bigger than the 130 billion euro injection initially mooted.
It is to be made up of 1.2 percentage points of national budget spending and 0.3 percentage points of European Union funding. It further calls for states to cut value added tax for labour-intensive services.
The plan — which includes plans for at least 5 billion euros of extra funding for the hard-hit European car sector -— must now be submitted to a EU summit in December for approval by EU states.