Split on economics stimulus

However, the delayed coordination failed to prevent the worsening financial crisis from further spreading to the real economy.

Hard hit by the crisis, the euro zone economy plunged into its first-ever recession in the third quarter of this year and the EU is set to follow suit in the last quarter.

Faced with an economic crisis, EU countries again embarked on their own way to stimulate their economies.

In a bid to coordinate national efforts to cushion the slowdown, the European Commission proposed in November an EU-wide economic stimulus package worth 200 billion euros (278 billion dollars).

The sum amounts to 1.5 percent of the EU's gross domestic product (GDP), with 1.2 percent coming from EU governments and the rest from EU funding.

Although EU leaders adopted the plan at their summit on Dec. 12,divergence on details remained.

Germany, the largest economy within the EU, has opposed a call for it to expand its national fiscal stimulus plan for the benefits of the EU economy as a whole, saying their current plan worth 32 billion euros (44 billion dollars) is enough.

On specific measures, EU leaders also failed to agree on a proposal pushed by the Commission to cut value-added tax (VAT) on green goods and labor-intensive services such as restaurants, putting off the debate until a meeting of EU finance ministers in the spring.

Dubbing the summit as the most important one since he assumed the top EU post, European Commission President Barroso declared the EU had succeeded in its "credibility test" by adopting the stimulus package.

But there is still a big question mark hanging on the solidness of the EU's unity, as daunting tasks still lie ahead of EU countries for them to tackle the spreading financial crisis, analysts warned.

(Xinhua News Agency December 22, 2008)