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EU hints of bailout plan, sets economy program

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[March 03, 2010]  BRUSSELS (AP) -- The European Union's executive commission promised Wednesday it would eventually have concrete measures in place to safeguard the stability of the 16 nations that share the euro and stem problems such as Greece's debt crisis, which is threatening the currency union.

InsuranceEU Commission President Jose Manuel Barroso said there was "intense debate" on how eurozone economies would bail out one of their members if it risks bankruptcy and that he could not give details before a decision was made.

"The concrete instruments, we will present them in due time," he told reporters. "We have to have solidarity in the European Union."

Barroso also called for stronger economic governance in the 27-nation bloc, saying there is a "real sense of urgency" for European governments to boost growth and smooth out major differences between their economies.


He said the EU should monitor economic performance in each member nation and issue warnings if a country is heading off track, something that might have flagged up problems with Greece's weak growth prospects and ballooning debt at an earlier stage.

In setting out the EU's economic strategy for the next 10 years, Barroso said Wednesday that there is a need to rebalance demand across EU countries -- a prod for Germany and the Netherlands to stoke spending at home.

"The European Union appears ready for stronger economic coordination and stronger economic governance," he told reporters.

The potential for the European economy to grow has been damaged by the economic crisis, he said, and governments need to take tough measures if they want to avoid sluggish growth that would make it harder for them to fund generous social welfare systems.

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He wants to set five overall targets for EU countries:

  • To boost employment from an average of 69 percent to 75 percent of the work force.

  • To increase how many school leavers gain a college degree from 30 percent to 40 percent.

  • To increase research spending from governments and companies to 3 percent of gross domestic product.

  • To reduce the number of people living in poverty from 80 million to 60 million.

  • To generate more renewable power and reduce energy consumption as part of the EU's ambition to slash greenhouse gas emissions by 2020.

He said he was confident that governments would drop some of their objections over giving the EU more say in how they run their economies.

But he said there would be no sanctions for countries that didn't hit the targets because this would not be appropriate.

[Associated Press; By AOIFE WHITE]

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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