Brussels - Germany is already doing its share and will not spend more money to help lift the European Union out of recession, the country's finance minister, Peer Steinbrueck, said Monday. "Germany is putting 31 billion euros (39.5 billion dollars) on the table. That is 1.25 per cent of our gross domestic product. I am not sure everyone has properly registered this," Steinbrueck said in Brussels.
Steinbrueck and his fellow eurozone ministers were holding a first discussion on the European Commission's economic recovery plan, which will have to be approved by heads of state and government at a summit due to take place on December 11-12.
The plan calls on member states to mobilize 170 billion euros, or 1.2 per cent of their GDPs, in extra spending and tax cuts. A further 30 billion are to come from the European Union budget and from the Luxembourg-based European Investment Bank (EIB).
Governments are also being asked to better coordinate their economic policies, so to ensure that decisions taken by one member state do not end up damaging other EU economies.
But with many governments lacking any room for manoeuvre - Italy, which sits on Europe's biggest budget deficit, has so far announced measures totalling just 6 billion euros, or 0.30 per cent of its GDP - Europe's locomotive is under pressure to help lift the entire bloc out of recession.
However, Steinbrueck made it clear that his government would not be bailing out other member states. And he insisted Monday on the need to stick to the EU's stability and growth pact, which calls on member states to keep their budget deficits to within 3 per cent of their GDPs.
"I am not sure that deficits of 6 or 7 per cent (of GDP) would increase the credibility (of the euro)," he said.
Germany, along with France, have also said they will not follow in Britain's footsteps and reduce their standard rates of Value Added Tax (VAT), as requested by Brussels.
Joaquin Almunia, the EU's economic and monetary affairs commissioner, said finance ministers would nevertheless back the commission's economic recovery plan.
"I am confident that the euro group and EU member states will provide an adequate reaction to this slowdown and risk of recession," Almunia said.
The commissioner also called on member states to resist any "protectionist measures", for instance by seeking to relax the EU's strict rules on what kind of state aid can be provided to businesses in difficulty.
"The (state aid rules) should be interpreted in a way that does not hinder the economic situation (while) preserving the (bloc's) internal market," Almunia said.
Diplomats note that the sum of money that governments will be willing to contribute to the commission's 200-billion-euro recovery plan will not become apparent until shortly before the December summit.
