Following Friday's meeting, Jean-Claude Juncker, the Luxembourg finance minister, said: "We have excluded the possibility of a European stimulus plan, and that since a couple of months."

Juncker said Europe was not in the same situation as the US and that past stimulus plans had had unwanted consequences.

"I think there is no need for a European stimulus package. Every country is responsible for itself," Peer Steinbrueck, the German finance minister said.

"It makes no sense to burn money."

While countries with strong public accounts could loosen their finances, the ministers agreed that "there is no question of letting budget deficits swell," Juncker said.

'Automatic stabilisers'

Despite a fast deteriorating economic situation, eurozone countries still had to respect EU rules requiring budget deficits to be kept to less than three per cent of total economic output, Juncker said.

Nevertheless, the ministers agreed that "automatic stabilisers" could be used, which under EU fiscal rules allow deficits to rise during periods of weak economic activity, although they must still keep within a three per cent limit.

Unlike other large global economies, Europe has few options for tackling the growing crisis and is often unwilling to use those that are available for fear of breaching its deficit and other economic guidelines.

Meanwhile, with the European central bank keen on keeping down inflation it is unlikely that the bank will give a boost to the economy by cutting interest rates until at least next year, according to economists.

Fight for survival

In contrast to Europe, the US has handed out billions of dollars in tax rebates, in an attempt to boost the economy, and at the end of August Japan announced an economic stimulus package worth more than $100bn.

Apart from targeted national measures, France, as holder of the EU's rotating presidency, is pressing for the Luxembourg-based European Investment Bank to be used to provide more funding to small and mid-sized firms.

The fight for survival at several big US banks also focused finance chiefs' minds on whether they are prepared to react in case a major European bank also runs into serious trouble.

"The situation remains fragile with the key credit markets disrupted and the banking sector under pressure," Joaquin Almunia, the EU economic and monetary affairs commissioner, told the finance ministers' meeting.