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Recovery Plan to restore confidence in the European economy

28
Nov '08

The European Commission has presented a comprehensive plan to drive Europe's recovery from the current economic crisis. The Recovery Plan is based on two mutually reinforcing main elements. Firstly, short-term measures to boost demand, save jobs and help restore confidence. Secondly, "smart investment" to yield higher growth and sustainable prosperity in the longer-term.

The Plan calls for a timely, targeted and temporary fiscal stimulus of around €200 billion or 1.5% of EU GDP, within both national budgets (around €170 billion, 1.2% of GDP) and EU and European Investment Bank budgets (around €30 billion, 0.3% of GDP).

Every Member State is called upon to take major measures good for its own citizens and good for the rest of Europe. The Recovery Plan will reinforce and accelerate reforms already underway under the Lisbon Growth and Jobs Strategy. It includes extensive action at national and EU level to help households and industry and concentrate support on the most vulnerable.

It puts forward concrete steps to promote entrepreneurship, research and innovation, including in the car and construction industries. The Recovery Plan aims to boost efforts to tackle climate change while creating much-needed jobs at the same time, through for example strategic investment in energy efficient buildings and technologies.

Commission President José Manuel Barroso said: "Exceptional times call for exceptional measures. The jobs and well-being of our citizens are at stake. Europe needs to extend to the real economy its unprecedented coordination over financial markets. This Recovery Plan is big and bold, yet strategic and sustainable. It builds on the Commission's proposals of 29 October that were the first blueprint to reach beyond crisis support in the financial sector and address the problems in the real economy. I am happy to see that it was and is the inspiration for the action announced since by the Member States."

The President added: "The Recovery Plan can keep millions in work in the short-term. It can turn the crisis into an opportunity to create clean growth and more and better jobs in the future. The timely, targeted and temporary fiscal stimulus will help put our economy back on track, within the Stability and Growth Pact.”

“Smart investments in tomorrow's skills and technologies will accelerate Europe's drive under the Lisbon Growth and Jobs Strategy to become a dynamic low-carbon economy for the 21st century. If Europe acts decisively to implement this Recovery Plan, we can get back on a path of sustainable growth and pay back short-term government borrowing. If we do not act now, we risk a vicious recessionary cycle of falling purchasing power and tax revenues, rising unemployment and ever wider budget deficits."

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