EU Reaches Agreement on Economic Stimulus and Climate Commitments
The EU leaders’ meeting on 12 December delivered results on all the main agenda items, including the stimulus package to counter the economic recession and the energy/climate legislative package intended to substantially reduce carbon dioxide (CO2) emissions and demonstrate global leadership.
The European Economic Recovery Plan, described by many observers as not aggressive enough, provides a framework for action to be taken at the EU level as well as for measures adopted by each
The Plan will thus largely be implemented by the individual Member States according to national preferences, which may render it less effective than if the states were to work in total concert. The appetite and capacity for fiscal stimulus at this point in time varies among EU countries, with, for instance,
Despite the variety in approaches to implementing the EU’s goals—the usual EU-mosaic approach—the leaders did agree to certain guidelines, including:
1. Measures to support demand must aim to
- produce immediate effects;
- be of limited duration; and
- be targeted at the sectors most affected and most structurally significant to the economy (e.g. the automotive industry and the construction sector).
2. Depending on national circumstances, stimulus measures may take the form of
- increased public spending
- judicious reductions in tax burdens
- a reduction in social security contributions, and
- aid for certain enterprise categories or direct aid to households, especially those most vulnerable.
The agreed climate package, albeit not directly related to the financial crisis, will have a significant impact on the EU economy going forward, affecting areas of public spending and fiscal policy. This package will implement the EU’s energy and climate commitments, especially the target of a 20 percent reduction in greenhouse gas emissions by 2020.
Last week’s EU meeting marked the end of the French EU Presidency, which is widely considered a great success. Expectations concerning the upcoming term of the
The hopes in the EU for a revitalized relationship with the
"When next month a new President takes office in
As most are aware, the
Notice: The purpose of this newsletter is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized from various sources, the accuracy and completeness of which cannot be assured. This alert should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.