The European Commission will unveil an economic recovery plan, which is expected to total 200bn euros (£170bn).
The European Commission has unveiled an economic recovery plan, which will total 200bn euros (£170bn), 1.5% of the EU members' GDP.
The Commission says a combination of tax cuts and targeted investment has to be co-ordinated across the bloc.
It hopes the plan will create millions of jobs across the region.
EU member states are being urged to sign up to the plan, which could amount to 1.5% of the EU members' GDP.
European Commission President Jose Manuel Barroso said the plan was "timely, temporary and targeted".
France and Germany's leaders have called on the EU to ease its fiscal rules to allow nations to spend more to boost their economies.
The Commission expects that 170bn euros will be supplied by member states, while 30bn euros will be provided "via action taken by the European Union".
The requirement to hold public deficits below 3% of GDP in individual EU countries should be eased, France's Nicolas Sarkozy and Germany's Angela Merkel said.
Mr Barroso said it was important that EU members acted together in a period of "exceptional crisis".
The two leaders made their comments in a joint newspaper article saying that governments had to head off a "recessionary spiral" at home.
"Measures that member states are introducing should not be identical, but they need to be coordinated," said Mr Barroso.
Meanwhile, Chancellor Merkel warned EU members against getting "into the race for billions" by unveiling huge stimulus packages.
"It's the best way to restore citizens' confidence and counter fears of a long and deep recession," he added.
"We should walk a measured path and keep to the middle ground, which is made-to-measure for the situation in Germany," she told the Bundestag, the lower house of parliament.
The European Commission president said the bigger part of the package would be implemented in 2009 and some measures would continue into 2010.
'Different situations'
The Commission has suggested that tax cuts could be made on Value Added Tax, energy efficient goods and labour taxes, while the investment should be focused on construction and car makers. There'll be more immediate money for some of the big EU-funded projects Mark Mardell, BBC Europe editor Blog: Too many EU plumbers?
The BBC's Europe editor Mark Mardell says the emphasis is on the 27 countries acting together - partly so no-one gets an unfair advantage but also because the Commission hopes it will have a much bigger impact on the whole economy of Europe.
The expected EU package was a "good target" they added in the piece in France's Le Figaro and Germany's Frankfurter Allgemeine Zeitung.
"There is no single model for recovery that can be applied to the 27 member states with very different budgetary and economic situations," they added.
"But we believe that co-ordinated budgetary stimulus can restore the confidence of consumers and investors and prevent opportunistic actions between states which share much more than institutions."
The EU Stability and Growth Pact - which all member nations sign up to - requires a country's annual public deficit to remain below 3% of its GDP.
But the treaty says there is room for more flexibility in these rules during severe economic downturn.Sarkozy and Merkel are grappling with economic challenges
"The debate could be swift on this point, since the pact foresees margins in the short term which must be used," wrote President Sarkozy and Chancellor Merkel.
France has said it plans to inject 19bn euros into some of its key industries - including construction and the car industry - to kick-start its economy
Full details of the rescue plan are due within 10 days, President Sarkozy said.
Earlier this month, Germany announced a string of measures to stimulate economic activity - including tax breaks and infrastructure spending worth 32bn euros over two years.
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