EU leaders promise billions for eastern Europe, IMF

(BRUSSELS) - EU leaders pledged 125 billion euros on Friday to support for eastern Europe and the IMF after rejecting calls to plough more taxpayer cash into their own faltering economies.

The leaders agreed at a summit in Brussels to double loans available to eastern Europe to 50 billion euros (68 billion dollars) and add 75 billion euros to the coffers of the International Monetary Fund.

"We have matched our words with actions; our message is one of confidence and solidarity," European Commission chief Jose Manuel Barroso told journalists after the two-day summit.

British Prime Minister Gordon Brown insisted the summit laid the foundations for next month's crucial Group of 20 meeting in London after European leaders agreed to do "whatever is necessary to restore jobs and growth.

"I think you will find that that is the spirit of every country, that is the spirit of the European Union," Brown said. "Necessary action will be taken to deal with the problems of unemployment and growth and we are united in wanting to see that happen."

Europe wants to double the resources of the IMF to 500 billion dollars while Washington has suggested lifting its lending capacity threefold to 750 billion dollars.

The 75 billion euros would be Europe's contribution to the overall increase in IMF funds, which remains to be agreed by the leading economic powers.

The IMF has repeatedly warned that its resources, and therefore its ability to lend to countries in difficulty, could dwindle dangerously low if the economic crisis persists.

With eastern Europe struggling to cope with the crisis, the leaders agreed to double a standing credit line available to EU countries that do not benefit from the shelter of using the euro.

"If there is a need to help the countries that are particularly hit by the crisis then there is a possibility to help them," Czech Prime Minister Mirek Topolanek, whose country holds the EU rotating presidency, said.

The existing 25-billion-euro credit line is being rapidly depleted after Hungary and Latvia drew down nearly 10 billion euros, with other countries such as Romania likely to follow soon.

At the start of the month, EU leaders ruled out a regional bailout plan for eastern Europe, opting instead to extend help to countries on a case-by-case basis as trouble emerges.

Export-dependent eastern Europe has been hit particularly hard by the crisis due to the region's reliance on increasingly risk-averse foreign investors to finance their economies.

During the first day of the summit, the EU leaders rebuffed mounting calls for a big new injection of taxpayer money into their own ailing economies, tentatively agreeing only to a limited hike in energy investments.

With an estimated 4.5 million European jobs under threat this year, public anger that more is not being done to revive the economy is beginning to bubble over, with more than a million French workers taking to the streets on Thursday.

Washington has also pressed its European allies in the run-up to the G20 summit of major economies on April 2 to play a bigger role in reviving global demand by doing more to prop up their economies.

However, Topolanek said after the first day of talks that Europe wanted to see the effects of measures it had already taken before spending more.

"We all agree that we are going to be prudent in our fiscal stimulus, while awaiting the results of the first package of stimulus measures," he said.

While they ruled out ambitious new economic recovery plans, the leaders reached agreement on a package of investments in energy and Internet infrastructure projects worth up to five billion euros.

European nations have been wrangling for months over what projects should benefit from the funds, which are the main EU-financed component of the bloc's combined 400 billion euros economic recovery plan.

European Council