European Commission President José Manuel Barroso unveiled proposals for a new economic recovery package last Wednesday, which seeks to improve the current economic climate. The report suggests that this should be done by refocusing attention towards increasing energy efficiency and by greening products across various sectors. The plans call for a substantial investment of around €200 billion, or around 1.5% of EU GDP, with the majority of the finances coming from Member State governments and the rest from EU funds and the European Investment Bank.

In terms of the content of the package, Mr Barroso acknowledged that ‘there are not only different points of departure but there are also other different policy environments’ to take into consideration in face of the financial crisis. As such he has made clear that the intention of the package is not to provide a uniform solution for all countries, but that it is more prescriptive to each nation’s particular needs and concerns.

The Commission has therefore outlined various priority areas. Firstly it seeks to ‘green’ the economy more, by focussing on investment in greener buildings and cars, and more generally promoting the take-up of greener products.

Reaction to the paper has been mixed although the general feeling is that it represents a positive step, both in terms of the financial crisis and in adapting and mitigating climate change.

PES President and Danish MEP Poul Nyrup Rasmussen has welcomed the fact that ‘the commission has listened to us and is going in the right direction’, but had some reservations all the same. Firstly he fears that ‘1.5 per cent of GDP in two years is almost certainly not enough to keep down unemployment’, and secondly he has raised conerns that ‘Angela Merkel and other conservative leaders such as Silvio Berlusconi may well water down the plan and refuse to make the necessary national investments’.

There was a recurring concern with the package however, centred around proposed investments in the car industry, with several quarters warning that this could ultimately amount to subsidies to the automotive sector. The Green/EFA Parliamentary leaders, Daniel Cohn-Bendit and Monica Frassoni warned in a statement that ‘while automakers are lobbying hard for softer fines for non-compliance, the EU must take great care not to gift a carrot and drop the stick. Strict controls must be put in place to ensure this money does not become a subsidy in disguise.’

All in all though, the response was positive, with the Green MEPs finding time to praise the fact that ‘that the commission sees the stability and growth pact as a flexible framework – not a straitjacket’. Focus will therefore now turn to convincing countries such as Germany and Poland to commit to the financial demands of the package, and to fine-tuning exactly what shape it is likely to take.