Europe News

EU summit approves jobs plan, continues talks on budget pact

Jan 31, 2012, 1:13 GMT

Britain\'s Prime Minister David Cameron, speaks during a media conference at the European heads of state summit in Brussels, Belgium, 30 January 2012. EPA/JULIEN WARNAND

Brussels - European Union leaders approved a plan to combat rising unemployment and revive a stagnating economy, but efforts were still underway at a summit late Monday to overcome Polish concerns about a draft budget discipline pact.

While stopping short of increasing overall resources, leaders agreed that existing regional aid and social development money that the bloc makes available to member states should be 'better' targeted 'towards jobs and growth, within agreed ceilings.'

The European Commission said that up to 82 billion euros (108 billion dollars) were available for reallocation, including 4.3 billion euros for troubled Greece.

In comments published on Twitter while he was giving a presentation to leaders, Commission President Jose Manuel Barroso said he would prod the eight EU members with the highest youth unemployment rates - Spain, Greece, Slovakia, Latvia, Italy, Portugal, Lithuania and Ireland - to get their acts together.

'I will be writing to the prime ministers of these eight countries to propose that we start work immediately,' he wrote.

Leaders pointed out that labour policies were 'mainly a matter for member states' and committed themselves to adopt national job plans. Remaining measures 'to be taken at EU level' will be reviewed at a summit in June.

They pledged to: help small and medium-sized enterprises; boost trade, notably with the United States; update EU copyright rules to kick-start the digital economy; and settle a Franco-German-British row holding up the launch of an EU patent system.

Swedish Prime Minister Fredrik Reinfeldt was the only EU leader to duck out of the seven-page statement, saying he needed parliamentary clearance before endorsing it.

In an unusual naming and shaming exercise, Barroso singled out lengthy approval procedures holding up the openings of IKEA stores in Germany and Italy as the kind of bureaucratic red tape that the bloc needed to do away with.

The summit was taking place against a backdrop of continued uncertainty over debt forgiveness talks in Greece, renewed concern for Portugal, rising unemployment and stalling growth across the bloc, despite reduced bond-market pressure on Italy and Spain.

Monday's talks were still expected to focus measures to counter the eurozone debt crisis.

Leaders gave final approval to bring forward to July the launch of the 500-billion-euro European Stability Mechanism (ESM), the new eurozone bailout fund.

They were expected to agree on the so-called fiscal compact, a budget discipline pact that is being negotiated by all EU countries except Britain.

The most significant innovation brought in by the German-sponsored treaty is an obligation to keep a balanced budget, to be policed by the EU Court of Justice.

'We will resolve the last questions today. So, in the future, there will be a debt brake in every country and, thus, a guarantee that budget discipline ... is adhered to,' German Chancellor Angela Merkel said as she arrived in Brussels.

Holding up the fiscal compact deal were Poland's complaints about provisions limiting participation of non-euro signatories to the fiscal compact in future eurozone summits.

'If we come out of this summit ... showing that Europe is divided or has been divided - into a certain group that makes decisions at one time, and the rest - we don't think that that would be a good signal for anybody,' Polish Finance Minister Jacek Rostowski told reporters.

Expressing support for Poland's position, Latvian Prime Minister Valdis Dombrovskis told dpa: 'If you join this treaty, you should be part of this treaty and not sit behind the door.'

Belgian trade unions staged a 24-hour general strike - the first in 18 years - to protest EU-mandated budget cuts. Aimed at inconveniencing European leaders attending the summit, the work stoppage ended at 2100 GMT.

'Enough is enough. We want them to change their policies,' Claude Rolin, leader of the Belgian Christian trade union CSC, said outside EU headquarters. 'Up in their helicopters, they will see a country paralysed because of their blind policies.'