2nd UPDATE: Almunia: EU Doing What Needs To Be Done For Econ

BRUSSELS -(Dow Jones)- The European Union is doing what is needed to help pull its economy out of a deepening recession, European Commissioner for Economic and Monetary Affairs Joaquin Almunia said Sunday. The E.U. has rejected U.S. calls to expand its fiscal stimulus spending. The bloc in December agreed to spend roughly EUR200 billion to aid its economy. The U.S., by contrast, last month established a $787 billion stimulus plan. The E.U. is worried that increased fiscal stimulus will leave its member countries with soaring debt burdens. Under E.U. rules, countries must keep their budget deficits below 3% of gross domestic product. "We cannot afford to spend the next two decades absorbing the debt" from fiscal stimulus spending, Almunia said during a conference in Brussels hosted by the German Marshall Fund of the United States. Almunia said revamped financial-market rules are the E.U.'s main priority going into the Group of 20 developed and developing nations summit in London on Alril 2. The U.S. is expected to use this meeting to press countries for more fiscal stimulus spending. He said the bloc and the International Monetary Fund will announce "next week" a plan to provide balance-of-payments support to Romania. The E.U. and the IMF have already provided similar assistance to Hungary and Latvia, two states that have been particularly hard hit during the current downturn. Almunia said the euro zone has instruments to help any state struggling financially. "We have the instruments to avoid having this crisis become a default problem," Almunia said, without adding details. European Central Bank governing council member Axel Weber, who appeared alongside Almunia at Sunday's conference, said no euro-zone country faces fiscal sustainability problems. Rumors circulated on Friday that the ECB had created a contingency fund to rescue troubled euro-zone economies, including Ireland and Greece. But E.U. finance ministers and the ECB said Friday that no such fund has been established.