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EU Prepares Economic Stimulus Package


European officials are working on a $164 billion aid package to help stimulate the economies of its 27 member nations.

The German Finance Ministry says Wednesday the proposal would call on each EU member to contribute the equivalent of one percent of its gross domestic product, the value of all the goods and services produced in each country.

German magazine Der Spiegel says the European Commission will approve the plan by the end of the month, and that European leaders would discuss it at a summit in December.

Meanwhile, sluggish sales and disappearing profits for the U.S. auto industry are being blamed for growing problems around the world.

The world's largest chemical company, BASF, says the auto industry has been canceling orders on short notice, forcing it to suspend production at 80 plants. The move will affect about 20,000 workers.

The German-based chemical giant makes a variety of products used in automobiles, including chemicals used in exterior paint, emissions control devices known as catalytic converters, and plastics used in engine components.

BASF also says orders from the construction and textile industries have decreased dramatically.

Also today, the European Union's Industry commissioner blamed the troubles of European automakers on the ailing U.S. auto industry.

EU Industry chief Guenter Verheugen says the EU should take "extraordinary measures" to prevent German carmaker Opel from collapsing. Verheugen warns if Opel - a division of U.S.-based General Motors - fails, it would hurt the entire European auto industry.

German solar power company Solarworld today offered to buy GM's Opel operations and a research facility for more than $1 billion. Solarworld officials say they want to transform Opel into a environmentally-friendly car company. GM says Opel is not for sale.

America's auto woes have also hurt Japan's largest carmaker. Toyota says it will suspend production at its U.S. and Canadian plants for two extra days in December, and lay off about 250 temporary workers. The Japanese auto giant also cut its sales forecast for China by more than 14 percent.

Some information for this report was provided by AFP, AP, Bloomberg and Reuters.

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