It does not exclude so this possibility which remains a national competence

The leaders of the Union, which had appointed, on 7 November, the European Commission to submit "a European strategy to cope with the economic downturn and maintain growth and employment", are likely to be disappointed. The plan that adopts today Brussels indicates that Member States can resort to a fiscal stimulus "for a period of up to two years", in other words for 2009 and 2010. He immediately adds that those who would be forced to exceed the 3 deficit limit permitted by the stability and Growth Pact will have to return to the standard at the end of this period.

The plan sets three objectives: stimulate demand and restore the confidence of consumers, limit the impact of the economic crisis on the most vulnerable categories and helping Europe to take advantage of the recovery when it will be. But, from the outset the Commission states that "most of the levers of economic policy and, in particular, those which can stimulate the consumer demand, are in the hands of the Member States".

In a forum published this morning in "Le Figaro" and the "Frankfurter Allgemeine Zeitung", the French President, Nicolas Sarkozy and German Chancellor, Angela Merkel, say that it "is crucial to prevent and to prevent a recessive spiral in our country" and called for "a public intervention quick and decisive to prevent irreversible damage to our economies."

Fiscal stimulus. The Commission recalled that the stability pact will continue to apply with all the flexibility provided by the reform of 2005. In other words, Brussels should open procedures for excessive deficit against all countries that will exceed the 3 percent set by the Covenant, the first rank of which the Ireland, the France and the United Kingdom. Instead of the year usually given to in the standards, the Commission indicated that they will have a period of two years. It is only after 2010, she, said that Member States will have to commit to correcting the budgetary deterioration reached meanwhile to return to the objectives in the medium term to balance public accounts.

Taxation. The Commission should not encourage a reduction of the rate normal VAT to the image that comes to the United Kingdom. It does not exclude so this possibility, which remains a national competence. On the other hand, it could propose targeted reductions, including on "green" services and products But the decisions in this area will be all the more difficult that they require the unanimity of the twenty-seven.

Competition. One of the more concrete measures that should be Brussels is a relaxation of the competition rules applicable to state aid. The Commission plans both to raise the amount of aid that Member States may grant their SMEs without his permission and to increase the intensity of the aid for some sectors, such as research and the protection of the environment.

Financing. The cost of the recovery plan should be fixed now by the Commissioners, an amount of EUR 130 billion quoted on several occasions appearing as the credible minimum. The European Investment Bank, which could benefit this year from the capital increase scheduled for 2009, should mobilize 30 billion for SMEs over four years, or 10 billion more than expected. The envelope devoted to the fight against climate change, energy security and infrastructure should be increased from 6 billion per year. Community aid for research and development would be intensified in three priority for employment, growth and the environment sectors: automotive, construction and goods manufactured. But the bulk of the measures of this package will be the responsibility of States.