February 16, 2009 / 5:36 PM / 9 years ago

FACTBOX-Europe's fiscal stimulus plans

Feb 16 (Reuters) - The Czech cabinet approved on Monday a package of tax cuts and spending which, together with earlier measures, totals 1.9 percent of GDP, while Hungary unveiled a package including changes in taxes, benefits and pensions.

Following are some details of stimulus packages announced by European governments to help weather the financial crisis:

* BULGARIA -- The government has increased by 20 percent to 5.6 billion levs ($3.66 billion) capital expenditure for 2009. The money will go into infrastructure projects, public building repairs and education and healthcare-related projects to create new jobs.

* CZECH REPUBLIC -- The Czech government has more than doubled the size of its stimulus package to 73 billion crowns ($3.3 billion) in revenue and spending, representing 1.9 percent of GDP. New tax cuts and spending measures account for 1.1 percent of GDP.

-- The plan, which will push the fiscal deficit “significantly” above 3 percent of GDP, sees lower social security payments, faster depreciation of property, and widening a value-added tax write-off for the purchase of new cars.

* FRANCE -- France unveiled a 26 billion euro stimulus package, equivalent to 1.3 percent of gross domestic product. President Nicolas Sarkozy said on Dec. 31 France was ready to pump more aid into the economy on top of this amount.

-- 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 due to the crisis.

* GERMANY -- The lower house of German parliament approved a 50 billion euro ($66 billion) second stimulus package on Feb. 13, combining investment spending and tax cuts. It includes investment in infrastructure projects and education, incentives for new car purchases and one-off payments of 100 euros for every child in Germany.

-- Germany had previously passed a package of measures worth 31 billion euros, aimed at generating 50 billion euros of investment and new contracts over two years.

* UNITED KINGDOM -- Britain pledged to spend 500 million pounds ($754 million) to tackle rising unemployment. The pledged money is part of a 20 billion pound ($29.91 billion) fiscal package announced in November.

-- Companies will get 2,500 pounds ($3,767) for new recruits who have been unemployed for more than six months.

-- The November package included tax cuts and 3 billion pounds of capital spending, amounting to about 1 percent of GDP. According to the pre-budget report it will reduce the effect of the downturn by 0.5 percentage points. It includes a value-added tax (VAT) cut from 17.5 percent to 15 percent until end-2009.

* HUNGARY -- Prime Minister Ferenc Gyurcsany unveiled tax and budget measures on Monday, under which the government plans to raise the main value-added tax to increase revenue and allow a cut in taxes on jobs to boost the economy.

-- In November, Hungary announced plans for a 1.4 trillion forint ($6.9 billion), two-year stimulus package to kick-start economic growth. The package does not involve new spending but regroups existing funds to assist businesses.

-- 680 billion forints would be allocated to provide lending guarantees primarily to small and medium-sized firms and 260 billion forints will provide liquidity for lending.

* ITALY -- Italy has approved a package to help families and firms hit by the financial crisis. Prime Minister Silvio Berlusconi said the measures amounted to 80 billion euros, but economists say the vast majority recycles existing funds.

* LITHUANIA -- Lithuania plans an economic stimulus package worth 4 billion to 5 billion litas ($1.48-$1.86 billion), the prime minister said on Feb. 6. The plan aims at helping business to get credits, speed up the use of EU structural assistance and ease labour market regulations.

* NETHERLANDS -- The government has announced a “liquidity impulse” of about 6 billion euros, including allowing companies to write down investments earlier than usual.

* NORWAY -- Norway presented on Jan. 26 a 20 billion crown ($2.87 billion) fiscal stimulus package. The package consists of 16.6 billion crowns in extra budget spending and 3.3 billion crowns in tax relief.

* PORTUGAL -- Portugal announced a package in December worth just under 2.2 billion euros to boost GDP by a planned 0.7 percentage point in 2009. It will focus on investment in schools, boosting technology and alternative energy.

* SLOVAKIA -- The Slovak government has approved a stimulus package worth 332 million euros. The funding will come from reshuffling of budget expenditure. The measures include partial and temporary reduction of payroll taxes, subsidies for new jobs and an increase in non-taxable income.

* SLOVENIA -- The Slovenian government’s stimulus package is expected to amount to some 800 million euros or about 2 percent of GDP. As part of the package, the cabinet offered subsidies to companies that introduced shorter labour hours due to lower demand for their products and has also increased tax incentives.

* SPAIN -- Spain has announced various measures to cushion the impact of the economic slowdown and soaring unemployment including a 38 billion euro stimulus package. It includes 6 billion euros in tax cuts and 4 billion euros of liquidity to credit-strapped companies and households. The government has said it will spend an extra 11 billion euros on public works and other stimulus measures to create 300,000 jobs.

* SWEDEN -- Sweden announced a stimulus package worth 8.3 billion Swedish crowns ($1 billion) on Dec. 5, but faced criticism for having too cautious an approach. Prime Minister Fredrik Reinfeldt said the measures were far greater than the steps proposed by the EU of 1.2 percent of GDP. The package totalled almost 3 percent of GDP.

* TURKEY -- Turkey has presented an economic stimulus package to parliament, Turkish papers said on Feb. 6.

-- The package will give the government cabinet the power to reduce some corporate tax on investment by up to 90 percent, and also cut taxes in textiles and retail clothing by 75 percent for a five-year period if they move their plants to certain cities.

* EUROPEAN UNION -- The European Commission on Nov. 26 proposed an EU-wide fiscal stimulus package worth 200 billion euros or 1.5 percent of the bloc’s gross domestic product (GDP) -- to be made up of 1.2 percentage points of budget spending and 0.3 percentage points of central EU funding.

Writing by Carl Bagh and Jijo Jacob, Bangalore Editorial Reference Unit; Central and East European bureaux, Additional writing and editing by David Cutler

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