Governments should be ready to increase their spending on economic stimulus programmes if circumstances require it, the International Monetary Fund's chief economist Olivier Blanchard said in comments published on Tuesday.
Here are some details of the stimulus packages already announced by European governments:
* EUROPEAN UNION — The European Commission first made proposals on Nov. 26 for an EU-wide fiscal stimulus package worth 200 billion euros.
— The package amounted to 1.5 percent of the bloc's gross domestic product (GDP) and is to be made up of 1.2 percentage points of budget spending and 0.3 percentage points of central EU funding. The plan includes 5 billion euros of extra funding for the European car sector.
— The draft approved the headline goal of an EU-wide programme of measures aimed at wrenching the 27-nation bloc's economy out of recession, despite some differences between EU member states about how to handle the economic downturn.
* FRANCE:
— France has unveiled a 26 billion euro stimulus package — equivalent to 1.3 percent of gross domestic product — and said it is ready to pump more aid into its ailing economy next year.
— 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 next year due to the crisis. — The stimulus plan earmarks 10.5 billion euros for infrastructure, research and support for local authorities.
* GERMANY:
— Germany's lower house of parliament has passed a package of measures worth 31 billion euros, which will generate 50 billion euros of investment and new contracts over two years. Germany has said that its stimulus plan amounts to 1.3 percent of national GDP, and that it is thereby "over-fulfilling" the Commission's plans — although others question the figures.
— A new lending programme of up to 15 billion euros will be introduced for German state-owned development bank Kreditanstalt fuer Wiederaufbau (KfW) to strengthen its lending activities.
— Parliament approved a rise in government net new borrowing in 2009 to 18.5 billion euros from 10.5 billion.
* HUNGARY:
— Hungary has 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 a regrouping of existing funds to assist businesses.
— 680 billion forints will be allocated to provide lending guarantees primarily to SMEs and 260 billion forints will provide liquidity for lending. * ITALY:
— Italy approved a package to help families and firms hit by the global financial crisis. Prime Minister Silvio Berlusconi said the measures amounted to 80 billion euros, but economists pointed out the vast majority was a recycling of existing funds.
— The measures included a temporary freeze on regulated energy prices and road tolls, 2.4 billion euros in tax breaks for poorer families.
* 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 has said it is ready to act swiftly to aid the economy after a 175 basis point rate cut last week highlighted a "serious economic situation". The government is expected to produce a stimulus package in early 2009.
* PORTUGAL:
— Portugal has announced a package worth just under 2.2 billion euros to boost the economy. The package will focus on investment in schools, boosting technology and alternative energy. The finance minister has said the package is expected to give a 0.7 percentage point boost to GDP in 2009.
* SPAIN:
— In the last six months, Spain has announced various measures to cushion the impact of the economic slowdown and soaring unemployment including a 38 billion euro fiscal stimulus package.
— The package 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 next year. The plan includes 800 million euros in aid for the auto sector.
* SWEDEN:
— Finance Minister Anders Borg said on Dec. 4 Sweden was planning stimulus measures of less than 15 billion Swedish crowns ($1.8 billion) to help cushion the financial crisis.
* UNITED KINGDOM:
— Britain announced on Nov. 24 that it would pump 20 billion pounds ($29.7 billion) into the economy to 2010 which includes tax cuts and 3 billion pounds of capital spending.
— This amounts 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.
— The plan includes a value-added tax (VAT) reduction to 15 percent from 17.5 percent, effective from Dec. 1 until the end of 2009.
