Brussels - European Commission President Jose Manuel Barroso on Thursday urged European Union governments to implement the bloc's fiscal stimulus plan, warning that calls to do more would undermine confidence in a swift recovery.

"Let's implement the plan and review it if necessary," Barroso said. "Saying (now) the plan is not enough will not build confidence."

The head of the EU executive was speaking after a meeting in Brussels with European business and trade union leaders ahead of the EU's regular spring summit, which was due to start in the afternoon.

The EU has launched an economic recovery package worth about 400 billion euros (540 billion dollars), or 3.3 per cent of the bloc's annual gross domestic product (GDP), spread over two years.

About half of this amount is made up of so-called "automatic stabilizers" - non-discretionary public spending, such as for unemployment benefits, that naturally increases during a downturn.

The package has been described as insufficient by the administration of US President Barack Obama, and most recently by American economist and Nobel laureate Paul Krugman.

But officials in Brussels note that Europe's generous system of social safety nets puts it in a much better position than others to weather the storm.

Nevertheless, Britain and Spain, which are experiencing particularly sharp downturns, are both understood to be pushing for more to be done.

"The financial crisis is now an economic crisis. And it's a big problem for families in Europe. Europe should not stay indifferent and should make a bigger effort", said Spanish Employment Minister Celestino Corbacho.

However, proponents of the "more-is-better" view face strong resistance from the bloc's biggest contributor, Germany.

"The current measures have to take effect first," German Chancellor Angela Merkel told the German parliament ahead of the summit. "A bidding war of promises will not calm the situation."

Merkel noted that Germany had already pumped more than 80 billion euros into the EU's 400-billion-euro economic recovery programme, making it its biggest contributors.

In a joint letter addressed to the Czech presidency and the commission ahead of the summit, Merkel and French President Nicolas Sarkozy also warned member states against trying to spend their way out of the recession.

"Excessive public indebtedness threatens long-term global stability," the two leaders wrote. "Healthy public finances thus remain crucial for the credibility and stability of the European Union."

Thursday morning's meeting with the EU's social partners was largely devoted to finding ways of defending jobs from the continent's worst recession in 60 years.

"Our absolute priority must be to keep people employed," Barroso said.

His comments came as French workers held their second national strike in as many months, and amid growing social unrest in Latvia and other badly-affected nations.

The EU is to hold a special summit on employment in Prague in May.

Czech Prime Minister Mirek Topolanek, whose country holds the EU's rotating presidency, said that meeting should do its best to preserve one of the bloc's pillars - the free movement of workers - while improving labour flexibility and providing more training.

The premier also echoed Barroso's view that Europe was doing its fair share in combating the global crisis.

"We have gone as far as we can in preparing the economic recovery plan. Now we have to implement what has been decided and assess its impact," Topolanek said.

Much of Thursday and Friday's summit was to be devoted on forging a common EU position on how to better regulate the international financial markets ahead of next month's Group of 20 summit in London.

Those discussions could turn sour because of calls to fight tax havens and other potential threats to "market integrity".

The leaders of Austria and Luxembourg fear being singled out by fellow heads of state and government because of their countries' bank secrecy rules and may well drive a hard bargain over dinner.

Another major bone of contention involves the possible use of 5 billion euros in community funds to improve internet access in rural areas, invest in environmentally-friendly projects and strengthen energy connections between member states as part of the economic recovery plan.

While the funds represent only a tiny part of the plan, national egoism is clearly at play - with governments still unable to agree on where the money should come from, or on where and how it should be spent.

"We are fairly confident that we will reach an agreement over the next couple of days," Topolanek said. (dpa)