Poland urges EU to spend EUR 700 bn to boost growth

(WARSAW) - Poland has called on the European Union to loosen its purse strings to boost growth, becoming the latest country to question German-led austerity as the eurozone economy continues to falter.

The 28-member bloc should agree to about 700 billion euros ($900 billion) in spending over the next five years, Poland's finance minister said in an interview published on Friday.

"Europe is strangling itself unnecessarily (...) We need to convince Europe that it needs to spend more," Minister Mateusz Szczurek told the Financial Times.

Talk of a fresh round of spending has not gone down well in Germany, which has Europe's biggest economy and would likely be asked to contribute a hefty sum to the overall pool.

The EU powerhouse has insisted that countries bring down their public deficits. The stance has angered other members including France, which has been grappling with a stagnant economy.

Critics argue that austerity is harmful to growth and jobs.

The eurozone's finance ministers were due to take up Szczurek's proposal at a meeting in Milan on Friday after he first floated the idea in Brussels earlier this month.

He argued at the time that the 700 billion euros be taken from the surplus of EU economies and used to finance infrastructure projects across the bloc.

The fund would be placed under the umbrella of the European Investment Bank and would notably help boost short-term growth and increase long-term growth potential, Szczurek had said.

He implied in the Financial Times interview that Poland would be ready to contribute to the fund.

European Central Bank chief Mario Draghi said on Thursday that a policy mix involving monetary, fiscal and structural policies was needed "to jump-start the economic recovery in the euro area".