EC calls for £170 billion from members to stave off crisis

Europe today stepped up the global fight against recession by calling for a co-ordinated €200 billion (£170 billion) rescue package across the Continent.

The European Commission urged member states to plough funds into their economies to stave off a prolonged and nasty downturn.

Countries including Britain, Germany and France have already announced fiscal stimulus plans of their own and the EC wants other nations to follow suit.

EC President Jose Manuel Barroso said the plan was "timely, temporary and targeted" and that it was important EU members acted together in a period of "exceptional crisis".

It is hoped the plan will save millions of jobs across the region. Barroso said: "Measures that member states are introducing should not be identical, but they need to be co-ordinated. It's the best way to restore citizens' confidence and counter fears of a long and deep recession."

The EC called on nations to invest a total of €200 billion, or 1.5% of EU gross domestic product - more than the €130 billion initially mooted.

The Commission expects €170 billion to be provided by member states, while €30 billion will be provided by the EU.

In Britain, Chancellor Alistair Darling outlined a £20 billion fiscal stimulus for the UK including a cut in VAT in the Pre-Budget Report on Monday. Germany, France, Spain and Italy have also made proposals.

The Europe-wide package must be approved when leaders gather in Brussels for a summit on 11 and 12 December, although it will have little impact on Britain as it has already fulfilled the main aims of the plan.

The Treasury today said it showed plans unveiled in the PBR had the backing of Europe. The stimulus proposed in Europe, along with a fall in revenues and rise in spending that accompany an economic slowdown, is likely to lift deficits in many nations, including Britain, to well above the ceiling of 3% of GDP.