Reuters - European Union leaders willurge the G20 leading and emerging economies to double the sizeof the International Monetary Fund's arsenal for fighting global recession to $500 billion, a draft declaration showed on Friday.

The draft also held out the prospect of the EU offering aidto eastern European states hit hard by the global economicdownturn, but rejected U.S. pressure for the 27-nation bloc to inject more money into their own economies to combat the crisis.

The draft, for issue at a summit of EU leaders in Brussels,said the priority remained to see through existing recoveryplans and exercise budgetary restraint.

The EU will propose at the Group of Twenty summit in Londonon April 2 that leaders agree to "double IMF resources so that
the Fund can help its members swiftly and flexibly if theyexperience balance of payment difficulties," the draft said.

The G20 meeting is intended to produce a plan to put theworld economy back on track.

The document said the EU was ready to help Europeancountries in trouble on a case-by-case basis and to reviewcontinually the ceiling of a 25-billion-euro ($33.7-billion) EUcrisis fund which has already been used by Latvia and Hungary.

EU leaders made clear late on Thursday they would not bow topressure to increase stimulus packages which have failed to reverse the slowdown, although the U.S. Federal Reserve pledgedan extra $1 trillion on Wednesday to help the U.S. economy.

"Member states should return to their medium-term budgetaryobjectives as soon as possible," the draft said, referring tothe drive for balanced budgets which has underpinned thestability of the euro single currency zone.

Reflecting European calls for tighter regulation to avoid arepeat of the financial crisis, the draft called for "appropriate regulation and oversight of all financial markets,products and participants that may present a systemic risk".

TAX HAVEN BLACKLIST

EU leaders attending the Brussels summit sought to end adispute over the branding of European countries as tax havens. Diplomatic sources said there was agreement that no EU stateshould appear on a blacklist of such countries.

"These countries which have accepted these standards, theare not on this blacklist," Czech Prime Minister MirekTopolanek, whose country now holds the EU presidency, told Swisstelevision of Switzerland and EU members Luxembourg and Austria.

The EU puts the size of its effort to combat recession atanything between 3.3 and 4 percent of its output, includingwelfare spending. President Barack Obama plans to devote 5.5percent of U.S. output to recovery efforts.

Although the draft gave no figure for an EU contribution toany raising of IMF funds, Belgian Finance Minister DidierReynders said there was an agreement to pledge $75 billion.

"This is quite an amazing amount and is quite enough,"Reynders told Reuters on Thursday.

Britain had said earlier on Thursday it would support newloans of $75-100 billion as part of an internatioase of what aBritish official called a "contagion of financial instability".

In a move to ease concern over the hard-hit economies ofcentral and eastern Europe, European Commission President Jose Manuel Barroso proposed doubling to 50 billion euros an EU fundavailable to troubled non-euro zone members.

"There seemed to be good support. It was broadly backed," one diplomat said. A French official said the plan had "strong support" from France, and Sweden confirmed it was in favour.

EU leaders also agreed on a list of schemes to benefit from afurther 5 billion euros of EU funds. Among them, the Nabucco pipeline intended to bypass Russia to bring Caspian gas to Europe won 200 million euros of funding.