EU nations reject adding funds to stimulus plans

BRUSSELS (AP) — EU nations have refused to spend any more money to stimulate their recession-hit economies, rebuffing calls by U.S. officials and European trade unions for more aid to stoke growth.

Czech Prime Minister Mirek Topolanek said EU leaders meeting at a summit Thursday were “unanimous in their views” that they “are going to be prudent” with economic stimulus plans. Topolanek is hosting the summit.

The European Commission claims that the bloc is spending 3.3 percent of gross domestic product this year and next year on stimulus efforts — but most of this is extra welfare payments. Government programs to boost the economy total 1.2 percent of GDP.

EU leaders stood firm against new stimulus deals even after an announcement late Wednesday that the U.S. Federal Reserve will launch a bold $1.2 trillion effort to lower rates on mortgages and other consumer debt.

Strikes in France, sagging company results in Germany and gloomy new unemployment figures in Britain have driven home the EU leaders’ challenges.

Earlier, Topolanek called any more deficit spending “a deadly idea.” He said EU nations need to know whether a $270 billion EU-wide spending package is working before digging into depleted state coffers for more.

Though that is aimed at increasing the amount of money in the economy, not the amount of government spending, it underlines the contrast between the European stance and a U.S. approach, which is piling on debt a lot faster.

“Trying to outdo one another with promises will certainly not bring any calm to the situation,” said German Chancellor Angela Merkel, who has led calls for European fiscal restraint.