2008 European Union Stimulus Plan - National Plans

National Plans

National plans are often close to 1.2 percentage points of GDP, as recommended by the European Commission, and are focused on 2008 and 2009. However, Germany and Spain have announced fiscal stimulus of respectively 3.3% (two plans altogether) and 3.7% of their GDP.

The plan announced by the European Commission at the end of November recommended measures to revive the economy but did not specify much the nature of the plans. Some plans are focused on the stimulation of demand (United Kingdom, to a lesser extent Spain, Italy or the second German plan), other plans insist more in incentives to supply (French plan, first German plan ).

Measures took on expenditure to improve demand generally include measures to support medium-term growth through increased public spending on infrastructures (road networks and railway) and aids to the housing sector (notably construction and renovation). Several countries have also announced short-term measures to relieve the effects of the crisis on the poorest people (increase in benefits and allowances to households with low incomes and unemployed). However, these aids have often limited effects on the economy, because their amounts are insignificant.

Other measures affected national taxation systems. The UK was the only country that opted for a temporary decline in the standard VAT rate, by 2.5 percentage points. In Germany, employer contributions were lowered. Most plans include incentive measures to SMEs and development of green energy.

Country Date Type Amount in billion euros (% of GDP) Measures
Germany November 2008 first plan 32 (1.3%) 82 (3.3%)
  • Investments in infrastrucrures
January 2009 second plan 50 (2%)
  • Public investments
France December 2008 stimulus plan 26 (1.3%)
  • Aids to auto industry (2 billion)
  • Aids to construction and housing (2 billion)
  • Public works (10.5 bn)
  • Aids to improve companies' liquidity (10 bn)
Spain April 2008 election pledges 20 bn (1%) 40 (3.7%)
  • Increase in minimum wage from 570 € to 800 € by 2012
  • Tax cuts
  • Benefit of 400€ for each fiscal household
  • Tax rebates for the housing sector
  • Suppression of the wealth tax
August 2008 first plan 20
  • Aids to SMEs
  • Construction of social housing
November 2008 second plan 10.9
  • Suppression of contributions and incentives to hire unemployed
  • Expenditures in research and development
  • Aids to auto industry
Italy May 2008 election pledges 9 (0.6%)
  • Suppression of taxation on overtime
  • Suppression of the housing tax
November 2008 anti-crisis plan
  • Aids to low-incomes households (3 bn)
  • Tax rebates for companies (2.3 bn) and households (0.7 milliard)
Netherlands September 2008 budget bill 2.5 (0.4%) 8.5 (1.4%)
  • Tax rebates for households and firms
  • Cancellation of the increase of VAT rate
  • Suppression of unemployment contributions
November 2008 stimulus plan 6 (1%)
  • Tax rebates
  • Social benefits
  • Aids to improve the liquidity of companies
  • Public expenditure (works)
United Kingdom September 2008 urgency measures £1 billion £31 bn (2.2%)
  • Aids to real estate sector
November 2008 stimulus plan £20 billion
  • VAT taxation rate lowered from 17.5% to 15% until 2010
January 2009 additional measures £10 billion
  • Building program (school, hospitals, green energy) to create 100,000 jobs

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