Brown urges EU to maintain stimulus

 

Prime Minister Gordon Brown Tuesday urged the European Union to maintain stimulus measures until recovery is embedded, warning of a decade of low growth and high unemployment without sustained action.

Official figures Friday showed the country's economy unexpectedly contracted in the three months to September, marking the longest recession on record and contrasting with an earlier return to growth in France and Germany.

Brown, in a letter to EU leaders ahead of their meeting in Brussels Thursday and Friday, warned that a drop in consumption in the United States and elsewhere was putting growth across the world at risk.

"We need as a matter of urgency a new European compact for jobs and growth" he said in the letter. "The first step is to maintain our stimulus until the recovery is secured."

"While it is right that we plan our exit strategies now, we cannot put growth and jobs at risk by premature withdrawal of the extraordinary measures we have all put in place."

Brown said Europe should set a target of creating 10 million new jobs by 2014, a fifth of which should be in low carbon industries, and said employment levels could be improved by better use of flexible labour market policies.

Britain also wants to see Europe invest in sectors such as green technology and advanced manufacturing that will help drive future economic growth, Brown said.

He added that administrative and legislative burdens on business, especially the services sector, should be reduced and a focus put on reaching bilateral trade agreements with India, Canada and south east Asia to help seal a global trade deal. 

"Finally, we need to go further in strengthening our banking system" Brown said. "We must... urgently establish new rules requiring the systemic financial firms and supervisors to develop effective recovery and resolution plans."

Climate finance will also feature high on the agenda in Brussels, Brown's spokesman told reporters.

Britain has been pushing for a 100 billion euro (90 billion pound) fund - funded by rich nations, carbon markets and bigger emerging economies - to help developing nations tackle climate change.

An agreement on how to help poorer nations cope with and fight global warming is seen as crucial if a new climate change deal is to be reached at a meeting in Copenhagen in December.