EU faces recession threat

European Commission President Jose Manuel Barroso said Saturday that Europe's biggest threat is recession and countries should be allowed leeway in running up deficits.

"We are living in exceptional conditions: the menace today is not inflation, the threat today is deflation, the risk today is a recession," he said in a press conference after a summit of global leaders hosted by U.S. President George W. Bush.

The EU commission forecasts that the economy in the 15 countries that use the euro may already be in a recession and will barely grow next year, expanding just 0.1 percent as the financial crisis hits hard.

Germany plans to boost …