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UK and France and EU to discuss stimulus package

  British, French and European leaders will meet in London on Monday to discuss the European Union’s €200 billion economic stimulus plan amid suggestions of a rift with Germany over the viability of the package.


Prime Minister Gordon Brown’s office said he would endorse the EU proposal at a summit with French President Nicolas Sarkozy and European Commission chief Jose Manuel Barroso before talks with business leaders. The package focuses on accelerating EU-wide investments in transport, information technology, and energy.

“Obviously the discussion is going to be very much focused on the economy. It will be an opportunity for the prime minister as well as President Sarkozy and President Barroso to hear the concerns that European business have at the moment,” Brown’s spokesman told reporters. “There will be a lot of emphasis and discussion on the important role that public investment can play in sustaining jobs and growth through the downturn.”

European leaders will meet in Brussels on Thursday and Friday to discuss the stimulus package, which includes spending €5 billion on energy connection and broadband projects, and plans to bring forward €4.5 billion for infrastructure to earlier in 2009. However, the London meeting threatens to be overshadowed by the absence of German Chancellor Angela Merkel, with suggestions she had been snubbed by Brown and Sarkozy over her lack of enthusiasm for the EU plan.


Merkel, leader of Europe’s biggest economy, is under fire from some EU nations and domestic lawmakers for what they say is a dithering and isolationist approach to the financial crisis. In particular, they are angry over her reluctance to embrace the EU approach, although her coalition has pushed through a national stimulus package it says is worth €31 billion.

Brown’s spokesman insisted the London gathering was an “informal meeting,” adding that the British and German leaders had discussed the economy in a phone call on Sunday. “Obviously each country has to take the action that it feels appropriate,” the spokesman said. “We have already seen the announcement of the fiscal stimulus package in Germany.” “We continue to work closely with Germany on how we can help businesses and families in both of our countries to ensure that we get through this downturn as fairly as possible.”

Brown has brought forward public spending projects worth £3 billion as part of a £20 billion stimulus package to mitigate the effects of the looming recession. In a statement earlier on Monday, Downing Street said Brown believes that speeding up infrastructure investments “will not only cushion the blow to the construction sector, which is slowing down sharply in most member states, it will also enhance Europe’s longer-term sustainable growth potential.” Businesses representatives include EADS, Total, Vodafone, National Grid, BT Group, Corus, Prudential, Diageo and Tesco, as well as British lobby groups the Confederation of British Industry, Institute of Directors and the Federation of Small Businesses. (Reuters)