EU Trio Press Germany for Bigger Contribution to Stimulus Plan

Gordon Brown, the French president Nicolas Sarkozy, and the European commission president José Manuel Barroso are to meet European business leaders and economists in London on Monday, putting pressure on Germany to make a bigger contribution to a European-wide anti-recession package.

The Global Europe Summit will bring together the three biggest advocates of a European-wide fiscal stimulus ahead of a European council summit at the end of next week. Barroso has proposed an EU-wide fiscal stimulus of €200bn (£174bn), or 1.5% of European GDP. The summit is also likely to hear calls for trade talks to be revived.

British cabinet ministers are frustrated that Germany, still the chief motor of the EU economy and usually in budgetary balance, will not adopt a more aggressive stimulus package of its own.

In a move welcomed by Downing Street, Sarkozy yesterday unveiled a €26bn stimulus plan targeting investment projects rather than directly aiding consumers. He said the measures would boost French GDP by 0.6% in 2009. The package will cost the equivalent of 1.3% of GDP.

Critics of Germany claim it has far more budgetary room for manoeuvre than any other EU country, but has so far only announced a package worth €32bn over the next two years. Much of this had been previously announced, with some saying it is really worth only €12bn over two years.

Germany complains that Barroso's plan for a €200bn EU stimulus would have to be quarter-funded by German taxpayers.