EU leaders focus on entrenched economic problems

Summit attempts to take advantage of a lull in the debt crisis

French president François Hollande: As tensions continue between France and the European Commission on Brussels’ handling of the crisis,  he  reiterated the need to tackle “growth and jobs” ahead of the summit, adding that it was “what Europe expects. Photograph: Philippe Wojazer/Reuters

French president François Hollande: As tensions continue between France and the European Commission on Brussels’ handling of the crisis, he reiterated the need to tackle “growth and jobs” ahead of the summit, adding that it was “what Europe expects. Photograph: Philippe Wojazer/Reuters

Fri, Jun 28, 2013, 10:30


EU leaders pledged last night to intensify the campaign against unemployment as they seek to refocus their attention away from crisis management towards more entrenched problems in the real economy.

Buoyed by last-minute deals on the EU budget and their approach to future bank rescues, the leaders who are attending a two day summit in Brussels, are keen to take advantage of a lull in the debt crisis to deepen the effort to promote economic growth.

The effort will concentrate on new measures to protect youth employment and increase European support for lending to small and medium sized businesses.

This includes a new “youth guarantee” to support training and education, and a commitment to concentrate the allocation of structural funds on initiatives designed to create youth employment.

The new EU budget, which was secured by Ireland’s outgoing presidency of the EU Council includes specific support for measures to boost lending by the European Investment Bank to the private sector.

Amid high praise for the Irish presidency, Irish officials dismissed suggestions that it had yielded to German pressure to postpone a decision on mandatory emission targets for new cars.

German chancellor Angela Merkel is reported to have phoned Taoiseach Enda Kenny to discuss the matter. A senior Irish official confirmed that a scheduled phone call had taken place but declined to discuss the conversation.

Provisional agreement was reached on Monday to reduce average car emissions from 2015 to 2020 by about a quarter.
Car-makers
After intensive lobbying from Germany’s influential automotive lobby, Berlin sought to increase the value of “supercredits” which allow car-makers producing bigger models to offset their emissions by making electric cars and smaller vehicles.

When this effort failed, German officials reportedly began building a blocking minority at EU ambassador level to ensure the compromise proposal would fail if put to a vote.

An Irish official said many states had expressed concerns with the proposals for some time.“We never removed this from the agenda,” said a spokesperson for the Irish presidency, saying countries had asked for more time to study documents distributed on Wednesday.

The issue now passes to the Lithuanian presidency.

As tensions continue between France and the European Commission on Brussels’ handling of the crisis, French president François Hollande reiterated the need to tackle “growth and jobs” ahead of the summit, adding that it was “what Europe expects”.

France has become embroiled in an acrimonious battle with the European Commission about its handling of the economic crisis, with ministers criticising European Commission president José Manuel Barroso in recent weeks.

The country was once again warned of the need to tackle its budget deficit yesterday, this time by the country’s court of auditors.

Ahead of the summit, Dr Merkel reiterated the need to improve competitiveness, an issue that has particular relevance for France, which has been repeatedly warned of the need to tackle its economy’s competitiveness.

“The main thing here is about improving our competitiveness. It’s not about creating more and more pots of money,” the chancellor said, noting that talks on economic and monetary union would take place alongside talks on budget consolidation during the summit.
Banking union
Leaders were due to discuss the EU’s progress on banking union, 12 months after the pledge to break the link between sovereign and banking debt.

Agreement was reached by finance ministers on pan-European rules for winding down banks in the early hours of yesterday, giving renewed impetus to the talks.

Following a meeting with European Council head Herman Van Rompuy, British leader David Cameron said he had been reassured that Britain’s long- standing rebate would be secure.

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