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Berlin: German Chancellor Angela Merkel said today she backed a new multi-billion-euro European Commission plan to kickstart the European Union's flagging economy, if the funds are invested wisely.

"The German government supports in principle the package submitted" by new European Union Commission chief Jean-Claude Juncker, Merkel told MPs in the Bundestag lower house of parliament.

"Investment is important... but what's important above all is which projects" it is ploughed into, she said.

New European Union Commission chief Jean-Claude Juncker earlier today unveiled a 315-billion-euro ($390 billion) investment plan to "kickstart" the economy, saying it would show the world that Europe was back in business.

The proposal must still be approved by European leaders in December but would entail an investment fund and a scheme to match new projects with private money.

German Economy Minister Sigmar Gabriel said he was pleased about the European Union investment proposal.

But he also stressed the need for some European Union member states to undertake structural reforms and said money alone was not enough.

The new European Fund for Strategic Investment will be funded from the European Union's budget and from the European Investment Bank, although the door is open for direct contributions from member states.

Merkel indicated that Germany would probably not be in a position to offer much financially.

Europe's biggest economy is due to approve its draft 2015 budget later this week foreseeing a balance of its public finances for the first time since 1969.

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Angela Merkel Backs 'In Principle' European Union Plan to Revive Economy

EU member states are discussing the possibility of watering down net neutrality proposals made by the Parliament and Commission

The European Union's net neutrality legislation isn't dead yet: EU telecommunications ministers discussing the issue Thursday delayed a decision on the proposed law until next year.

Thursday's meeting of the Council of the EU discussed what to do with a proposal from the European Commission and the European Parliament to enshrine net neutrality in EU law. The Parliament is aiming for a strict form of net neutrality that treats all Internet traffic equally, without discrimination, restriction or interference, a position Members of the European Parliament confirmed in a resolution adopted earlier Thursday.

However, the Council still has to agree to the proposals and could be seeking to water them down. Italy, the current holder of the rotating Council presidency, has been pushing to remove the very definition of "net neutrality" from the bill, and also wishes to allow differential charging for services, according to a document published by the Council.

These proposals were criticized by MEPs, civil society groups and the new vice president of the European Commission responsible for the Digital Single Market, Andrus Ansip, who all urged the Council to stick with strict net neutrality rules.

Discussions in the Council though will continue until the Italy's presidency ends, a Council official said. It will hand over the reins to Latvia on Jan. 1.

The change of presidency may not alter much though, because member states holding the presidency work together closely in groups of three, determining the topics and major issues that will be addressed by the Council over an 18 month period. The current trio consists ofItaly, Latvia and Luxembourg.

Speaking at a press conference after the Thursday meeting, Antonello Giacomelli, the Italian Undersecretary in charge of telecommunications who chaired the meeting, said that the Council had an intensive dialogue on net neutrality, adding that there was a "renewed commitment" towards it. "This was something that the member states supported loud and clear," he said, adding that the Council wants to put "citizens back at the center of things."

Though there were different opinions, the Council was willing to find common ground with the Parliament, he said.

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, online payment issues as well as EU technology policy and regulation for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com

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EU net neutrality discussions to continue into the next year

The national flag of Italy, center left, flies along side the European Union flag from the Palazzo Chigi, the headquarters of the Italian government, in Rome. The European Commission will warn France and Italy's governments that they may face action in March if they do not follow through on written pledges to the EU executive on cutting deficits and making their economies more competitive, according to a European Union official. Close

France and Italy will escape immediate punishment over their 2015 draft budgets when the European Commission announces results of its assessments tomorrow, a European Union official said.

The Brussels-based commission will instead warn the two governments that they may face action in March if they do not follow through on written pledges to the EU executive on cutting deficits and making their economies more competitive, according to the official, who spoke on condition of anonymity. The commission considered moving to sanctions tomorrow and decided against it, the official said.

Under budget-monitoring rules bolstered during the euro-area debt crisis, the commission will publish its formal assessments of draft 2015 budgets from all of the countries using the euro, apart from Greece and Cyprus, which are still subject to conditions under their bailouts.

Earlier this month, the commission decided against rejecting any budget outright, saying that none of the euro-area nations seriously risked breaching EU spending rules, while leaving open the possibility of warning that measures were needed. The decision to put off until March any move toward sanctions is a change to the EUs timetable for such action.

While the EU cannot dictate the contents of a national budget, it can begin a process to impose fines if governments repeatedly flout debt or deficit targets or take insufficient measures to deal with imbalances.

Countries are required to narrow deficits to within 3 percent of gross domestic product and to reduce debt to 60 percent of GDP. They can ultimately face fines of as much as 0.7 percent of GDP if they do not take effective action, after other factors such as growth potential are taken into account.

To contact the reporter on this story: Ian Wishart in Brussels at iwishart@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net Jones Hayden

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France, Italy Said to Avoid Immediate Action Over Budgets

The European Union expects stablegas supplies this winter under a deal by Russia and Ukraine, asenior EU energy official said, even while Moscow has yet toresume shipments and Kiev has yet to pay in advance as agreed.

Russia provides a third of European Union gas supplies, andhalf of that volume flows through Ukraine. Previous spatsbetween Kiev and Moscow led to temporary supply cuts to Europe.

Ukraine and Russia signed an agreement, brokered by theEuropean Commission, at the end of October to cover gas suppliesover the winter as a temporary solution to a long-standing pricedispute between Moscow and Kiev.

But Russian gas producer Gazprom has not resumedshipments, suspended in June, and Ukraine has not provided thepre-payment that Moscow says is a condition for restartingsupply.

"So far, everything is in order," Maros Sefcovic, theEuropean Commission's new energy chief, told reporters onThursday on the sidelines of an international energy conferencein Kazakhstan's capital Astana.

"We are in close and, I would even say, everyday contactwith both Ukraine and the Russian Federation, and I hope that wewill have no problem with gas this winter," he said in Russian.

Sefcovic's comments were among the first from newlyappointed members of the EU executive body on the gas supplyissue.

Under the EU-brokered deal, Ukrainian state firm Naftogazhas agreed to pay Gazprom $2.2 billion in debt and upfrontpayments before supplies resume.

Naftogaz has transferred the first $1.45 billion tranche ofthe payment, but it has not said when it will place new orders,nor for what volume.

Naftogaz Chief Executive Andriy Kobolev said on Monday thatUkraine planned to buy 1 billion cubic metres (bcm) of gas fromRussia by the end of the year and up to that amount monthlythrough the winter.

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European Union expects stable gas supply even as Russian shipments yet to start

EU legislators have called on antitrust authorities to consider breaking up companies that use search activities to dominate other markets

In a move widely seen as targeting Google, European Union legislators have called on antitrust regulators to consider unbundling search engines from other commercial services as a way of maintaining competition in the search market.

While the non-binding resolution adopted by the European Parliament on Thursday didn't mention Google, the company is the obvious target, with about 90 percent of the European search market.

The E.U.'s executive arm, the European Commission, has been conducting an antitrust investigation into Google since 2010, examining the company's promotion of its own services in search results among other things, but has proven reluctant to enforce penalties and has struggled to reach a settlement with the company.

In approving the resolution by 384 votes to 174 on Thursday the Parliament sent a strong signal to the Commission to address such antitrust concerns more forcefully, one to which it will have to respond.

Although the resolution roiled diplomatic relations with the U.S., it will have little effect on the Commission's investigation of Google, nor on Google, which Parliament does not have the power to break up.

Google declined to comment, but the Computer and Communications Industry Association (CCIA), of which Google is a member, stepped up to criticize the Parliament's decision.

"Unbundling of companies is an extreme and unworkable solution that makes no sense in fast moving online markets. While clearly targeting Google, the parliament is in fact suggesting all search companies, or online companies with a search facility, may need to be separated. This is of great concern as we try to create a digital single market, and the right conditions for innovators, in the EU," CCIA Europe Vice President James Waterworth said in an email.

Adoption of the resolution was clearly designed to increase the pressure on competition Commissioner Margrethe Vestager, he added. "Sound competition policy is too important to a well-functioning economy to let it be influenced by anything but the facts and the law. Interjecting politics into independent legal proceedings undermines the credibility of competition investigations and thus confidence in markets."

The Members of the European Parliament behind the motion stressed earlier this week that breaking up Google is only one of the options to solve the issues with the company. Other options include introducing a rotation mechanism to display commercial services from Google and its competitors in the same location and with the same prominence on the search results page. Adopting legal measures specifically aimed at the search market could also solve the problems.

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European Parliament calls on Commission to consider breaking up Google