Eurozone finance ministers rule out joint stimulus package

November 4th, 2008 - 12:36 pm ICT by IANS  

Brussels, Nov 4 (Xinhua) Finance ministers from the European Union (EU) countries have ruled out a joint stimulus package to save the real economy but called for better coordination. “We do not believe that in the euro area we need a general revival package, a sort of traditional programme designed to stimulate the economy,” Luxembourg Prime Minister Jean-Claude Juncker told reporters Monday after chairing a regular meeting of Eurozone finance ministers.

The meeting was held as the European economy slipped into a recession in the wake of the financial crisis.

An economic forecast released by the European Commission, EU’s executive arm, showed that the combined economy of the 15 countries of the 27-member bloc, already in recession, is expected to grind to a halt in 2009.

EU Economic and Monetary Affairs Commissioner Joaquin Almunia told the press conference that Eurozone members should coordinate their response to the economic slowdown as they did to the financial crisis.

“Coordination is needed,” Almunia said. “But this will take place within the rules of the Stability and Growth Pact, not without it.”

The Commission said last week it would propose a recovery package later this month to save the real economy from the impact of the financial crisis, which would be in essence a coordinated approach based on national measures.

“National action is needed and national action is much more efficient when it is coordinated with a common vision and with a common discussion on who, when and how should strengthen investment or fiscal policy and structural reforms,” Almunia said.

French Finance Minister Christine Lagarde, whose country holds the EU rotating presidency, said ahead of the meeting that she would push for a Europe-wide plan to support the European economy.

The issue was set to be raised again when finance ministers from EU states meet Tuesday.

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