FACTBOX-Europe's fiscal stimulus plans to tackle crisis

Mon Dec 8, 2008 10:47am EST
 
[-] Text [+]

Dec 8 (Reuters) - European leaders are due to plan their next moves to bring economies back from a precipice in a two-day summit from Thursday.

The European Union summit in Brussels on Dec. 11 and 12 will study European Commission proposals to give the sagging world economy a sharp boost with a 200 billion euro ($257 billion) spending plan.

* EUROPEAN UNION:

-- The European Commission approved on Nov. 26 proposals for an EU-wide fiscal stimulus package worth 200 billion euros.

-- The proposal amounted to 1.5 percent of the bloc's gross domestic product (GDP) and is to be made up of 1.2 percentage points of budget spending and 0.3 percentage point of EU funding. The plan includes 5 billion euros of extra funding for the European car sector. It also includes a temporary, across-the-board value-added tax (VAT) cut.

Here are some details of how European member states will spend that money:

* FRANCE:

-- France has unveiled a 26 billion euro stimulus package -- equivalent to 1.3 percent of gross domestic product.

-- The French economy minister said the plan should create 80,000-110,000 new jobs, making up for the expected disappearance of some 90,000 jobs next year due to the crisis.

-- The stimulus plan earmarks 10.5 billion euros for infrastructure, research and support for local authorities. This includes 4 billion euros for investment for state-owned rail, energy and postal companies, including a pledge to speed up projects such as a fast train link in western France.

* GERMANY:

-- Germany's lower house of parliament passed a package of measures worth 31 billion euros last week, which will generate 50 billion euros of investment and new contracts over two years.

-- A new lending programme of up to 15 billion euros will be introduced for German state-owned development bank Kreditanstalt fuer Wiederaufbau (KfW) to strengthen its lending activities. KfW's infrastructure programme for structurally weak local authorities will be raised by 3 billion euros.

-- Urgent investment in transport will be accelerated via a new programme totalling 1 billion euros in both 2009 and 2010.

-- Parliament approved a rise in government net new borrowing in 2009 to 18.5 billion euros from 10.5 billion.

* HUNGARY:   Continued...