EU launches stimulus plan

London: Massive stimulus plans to drive the world out of recession took center stage on Wednesday with the European Union considering a 200 billion euro boost for its economy. The move came on the heels of an $800 billion credit market bailout from the US Federal Reserve. The European Commission approved a package aimed at giving the sagging European economy a sharp, temporary boost with a 200 billion euro ($260 billion) spending plan across the 27-nation bloc, an EU source said. The plan, higher than initially thought, calls for a targeted and temporary fiscal stimulus of 1.5 percent of EU gross domestic product. National measures would account for around 170 billion euros, or 1.2 percent of GDP, and EU and European Investment Bank budgets around 30 billion euros. The Commission wants the European Union’s 27 member countries to unite on a two-year dash for growth, even if it means that it comes at the cost of breaking the region’s national deficit targets. — Reuters

Volcker to head economic advisers

CHICAGO: President-elect Barack Obama chose former Federal Reserve Chairman Paul Volcker Wednesday to head a new White House panel to help create jobs and bring stability to the ailing financial system. Volcker, 81, will head the President's Economic Recovery Advisory Board. The board's top staff official will be Austan Goolsbee, a University of Chicago economist, Obama said at a news briefing. Volcker is no stranger to economic crises. He became Fed chairman in 1979, a time of high inflation and high unemployment. He helped tame inflation by raising interest rates, a move that helped plunge the economy into recession. He was later credited with reviving the economy by getting inflation under control. Volcker served as Fed chairman until 1987. He returns as an adviser with the nation facing increasing unemployment, a growing federal budget deficit and a financial system in turmoil. It was Obama’s third news conference in as many days dealing with the economy. On Monday, he announced New York Federal Reserve President Tim Geithner as his treasury secretary. — AP

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