PREVIEW-EU finmins to pore over Commission's 200 bln euro plan

By Jan Strupczewski

BRUSSELS, Nov 28 (Reuters) - European Union finance ministers will seek to coordinate a joint boost to the sagging economy next week, choosing from a menu of actions drawn up by the European Commission in a plan worth some 200-billion euros.

But EU sources close to the organisation of the monthly meeting of euro zone finance ministers and the European Central Bank, called the Eurogroup, as well as the broader Ecofin of the 27 EU finance ministers, cautioned not to expect too much.

"On Monday and Tuesday the Eurogruop and the Ecofin will discuss the Commission plan, what they think is missing, if they disagree with the plan," one Eurogroup source said.

"They will make informal agreements, like: 'we think this is more worth pursuing more than something else', or 'we think this is missing', or 'that should definitely be done', but there will be no formal decisions," the source said.

With the 15-member euro zone already in recession and the economy of the 27-nation European Union fast heading towards one, the EU executive arm proposed on Wednesday a 200 billion euro fiscal stimulus to stave off the slowdown. [ID:nNLQ669817]

The plan calls for additional discretionary budget spending, mainly in 2009, but also in 2010, of around 1.2 percent of GDP from EU members with Commission adding another 0.3 percent of GDP from common EU funds, to kick start the economy.

"Finance ministers have an important role in clearing the ground and seeing what degree of agreement is possible," a second Eurogroup source said.

To avoid actions in one country clashing with measures taken elsewhere in the 27-nation bloc, which shares a common market for goods and services, the Commission has prepared a toolbox of steps for countries to choose from.

"If the impulse is not coordinated, one plus one might not equal two, but less, even zero. If it is coordinated, one plus one may equal three," Economic and Monetary Affairs Commissioner Joaquin Almunia said on Wednesday.

What will make the talks difficult is the fact that many EU countries, like Germany, Spain, Italy or the Netherlands have already announced national economic stimulus plans. Some, like France, are just about to.

HOW MUCH NEW MONEY?

The 200 billion euro total of the Commission's plan takes into account already announced measures, Commission President Jose Manuel Barroso said on Wednesday, giving the example of the German stimulus package worth 32 billion euros.

On Thursday Berlin rejected French calls to provide billions more euros to finance growth, saying it did not want to be punished for putting its public finances in order in past years, by having to now bailout those who did not make the effort.

France has less room for manoeuvre in budget policy than Germany because its budget deficit is now close to the EU limit of 3 percent of gross domestic product and likely to breach that ceiling in coming years, triggering EU disciplinary action.