A plan for economic recovery of EU member states has been proposed by the European Commission. European Commission is urging member states to sign up for this plan that aims to be coordinated across the European bloc by combining tax cuts and targeted investment.

The details about the plan have been unveiled on Wednesday and it may be of 130bn euros that is nearly one percent of EU states’ GDP.

EU has been asked to ease fiscal rules that may help the nations to spend more to strengthen their economies.

France president Nicolas Sarkozy and German chancellor Angela Merkel said that the condition to keep a public deficit below 3 percent of GDP must have been eased. These comments were made by both these leaders in a joint article that published Wednesday in a Newspaper.

According to the Commission, the tax cuts needed to be made on labor taxes, Value added tax and energy efficient goods.

The EU Commission is quite hopeful to have a significant impact on the entire European economy.