BRUSSELS, Dec 11: European nations wrangled over the best way to beat the global recession on Thursday as a key US auto industry bailout package faced a tough vote in the Senate.

Tensions over attempts to boost the European economy broke into the open as EU leaders met for a summit in Brussels where they were to discuss proposals from the European Commission for a 200-billion-euro ($260 billion) stimulus package.

German Finance Minister Peer Steinbruck soured the mood when he told Newsweek magazine on the eve of the meeting that British Prime Minister Gordon Brown had adopted “crass Keynesianism” by borrowing money to finance state spending.

“The switch from decades of supply-side politics all the way to a crass Keynesianism is breathtaking,” Steinbruck said.

Germany has faced intense pressure from Brown, French President Nicolas Sarkozy and European Commission chief Jose Manuel Barroso to boost domestic consumption, but has refused to indulge in borrowing and deficit spending.

Brown dismissed the criticism and said the comments were “internal German politics” and German Chancellor Angela Merkel said as she arrived in Brussels that “we support the European Commission’s initiative.”

In the United States, the White House said there was a “realistic” chance of Senate passage on Thursday of a $14 billion government lifeline for the US auto industry despite Republican opposition.

US President George W. Bush was courting wary lawmakers on behalf of the embattled legislation, which cleared the lower House of Representatives on Wednesday and faces a vote in the upper chamber Senate on Thursday.

President-elect Barack Obama stressed that Washington “should provide short-term assistance to the auto industry to avoid a collapse while holding the companies accountable and protecting taxpayer interests.”

“The legislation in Congress right now is an important step in that direction. And I’m hopeful that a final agreement can be reached this week,” he said.

In Sweden, the government announced a 28-billion-kronor package to help its beleaguered automotive sector, including carmakers Volvo and Saab.

The measures “will take the form of increased investment in research and development and state credit guarantees for raising loans (from) the European Investment Bank,” the government said in a statement.

Volvo Cars is owned by Ford while Saab Automobile is owned by General Motors which has warned it could run out of money in the next few months without state aid.—AFP