Barroso insists on overall EU spending target for stimulus package

Special Report:Global Financial Crisis

BRUSSELS, Dec. 9 (Chinese media) -- European Union (EU) leaders should spend 1.5 percent of the bloc's gross domestic product (GDP) to stimulate its economy, the European Commission president, Jose Manuel Barroso, said Tuesday.

"I will insist on that -- that we have the 1.5 percent target as a sign that we mean business when we are speaking about fiscal stimulus," Barroso told a press conference two days before EU leaders meet in Brussels for their year-end summit.

In November, the commission proposed a EU-wide economic stimulus package worth 200 billion euros (256 billion U.S. dollars), aimed at building a coordinated European response to a recession resulting from the global financial crisis.

The sum amounts to 1.5 percent of the EU's GDP, with 1.2 percent coming from governments of member nations and the rest from EU funding.

Barroso said in London on Monday that there was wide support for the proposed package but it needed Germany's participation.

Germany, the largest economy in the EU, is facing pressure to expand its national fiscal stimulus plan for the good of the whole EU economy. But Berlin has resisted the call, saying its current plan worth 32 billion euros (41 billion U.S. dollars) is enough.

Barroso denied there was fundamental disagreement between Berlin and other EU capitals. He said German Chancellor Angela Merkel might increase the country's stimulus scale next year.

"I think next year there will be some revisions of the national intentions," Barroso said. "I have no doubt about Chancellor Merkel's intention to make a contribution to the European package."

However, EU Economic and Monetary Affairs Commissioner Joaquin Almunia said Monday that EU member states had not pledged enough on their national fiscal stimulus plans so far.

"According to our estimates, we have an impact (from fiscal stimulus) in 2009...of 0.8, (or) 0.9 percent of gross domestic product in the euro zone and member states of the EU," Almunia told a committee of the European Parliament in Brussels.

He added that 18 of the EU's 27 member states had adopted their national fiscal plans more or less in line with the commission's proposal.

However, Barroso said that the need for a numerical target did not mean spending could solve the problem.

"You have to see how we are going to make that smart spending. This is the key of our proposal," Barroso said, urging EU member governments to combine their short-term stimulus measures with long-term structural reform.