Ms Ferreira's report on the commission's European Economic Recovery Plan (EERP) said stimulating the EU economy, improving competitiveness and restoring health to the financial markets are vital if rising unemployment is to be halted. But, she added, member states must be prepared to support each other.

"The EU is about competition but also cohesion and solidarity. That is why we conferred sovereignty to the EU before embarking on this whole project," she said during the debate.

Measures to release EU funds, improve the financial supervisory system and tackle tax havens also feature among the report's recommendations.

Attending the debate, commission President Jose Manuel Barroso outlined a number of commission initiatives to fight the recession and said his number one concern was the "social impact of the crisis".

However both he and Czech deputy prime minister for European affairs Alexandr Vondra, representing member state governments at the meeting, were sharply criticised by Socialist MEPs in particular for doing, in their words, too little, too late.

The leader of the Socialist group in the parliament, Martin Schulz, said only the UK, Germany and Spain had met their target of 1.5 per cent of GDP stimulus spending agreed under the EERP, adding that there was a need for "solidarity between states".

Socialist party president Poul Nyrup Rasmussen said Mr Barroso was painting "an overly rosy picture" of the spending being carried out under the plan, saying it was closer to 0.9 per cent of GDP rather than the commission estimate of 3.3 per cent.

Mr Rasmussen asked Mr Barroso whether he agreed with the statement by Jean-Claude Juncker - chairman of the 16 eurogroup countries and Luxembourg's prime minister - after a eurogroup meeting on Monday in which he said that Europe had done enough to counter the crisis.

"You have not done enough," he declared, appealing to the commission to launch a new recovery effort that would include the launch of 'eurobonds', the issuance of debt at the EU level, a move that would ease the borrowing costs of southern European member states and Ireland.

French Socialist MEP Pervenche Beres, who heads the powerful economy committee in the parliament, joined in on the attack. "Europe has to put into place the right measure and the European economic recovery plan is not enough," she said.

Mr Vondra countered calls for the EU to match US spending levels by pointing out that the US was not seeking financial support packages from the International Monetary Fund.

Both Hungary and Latvia have received aid from the multilateral lender so far and Romania is currently in negotiations.

"Solidarity must be accompanied by government responsibilities," he said.

MEPs also approved a report calling on EU leaders to make employment measures a priority at next week's summit meeting and another saying advanced spending on regional projects would help tackle the crisis.