Brussels - The European Commission on Wednesday offered to help mitigate the impact of the recession on the European Union's dwindling labour market by speeding up the expenditure of 19 billion euros (27 billion dollars) in community funds until 2010.

Under a proposal unveiled by Commission President Jose Manuel Barroso and Employment Commissioner Vladimir Spidla, EU governments will temporarily be exempted from co-financing projects funded by the European Social Fund (ESF), the commission's main financial instrument for supporting employment.

The move is deemed necessary because many member states are unable to provide part of the money due to the strains that the economic crisis is placing on their national budgets, Barroso said.

The ESF is one of the chapters of the commission's structural funds, which are designed to improve economic development and which have a total budget of 347 billion euros over the 2007-13 period.

The biggest recipients of the ESF - which commission officials say helps more than 9 million people find a job each year, for instance through retraining - are Poland, Germany and Spain. Money is allocated according to a country's population and relative wealth.

The proposal, which must now be approved by EU leaders at their regular summer summit on June 18-19, comes in the wake of worryingly new unemployment figures, which showed the EU jobless rate climbing to 8.6 per cent in April.

The commission also wants companies to avoid redundancies by offering workers shorter working hours and is providing 100 million euros in micro-credit to help Europeans set up small businesses.

The proposal was criticized by the Socialist grouping of the European Parliament, which compared it to trying to extinguish a fire in a house by using a glass of water. (dpa)