EU leaders pledge to stimulate growth, create jobs

Brussels: European leaders promised to stimulate growth and create jobs, in a tacit acknowledgment that their exclusive focus on austerity has had painful side effects. Heads of European state and government meeting in Brussels on Monday pledged to offer more training for young people to ease their transition to the work force, deploy unused development funds to create jobs, reduce barriers to doing business across the EU's 27 countries, and ensure that small businesses have access to credit. However there was no offer of any new financial stimulus.

"We must do more to get Europe out of the crisis," the statement approved by leaders said.

The European Commission says that there are still 82 billion euro in development funds that have not yet been allocated, and the statement from Monday's summit said they should be "rapidly" committed to projects focused on growth and job-creation.

Europe's debt crisis has put the continent and its leaders in an almost impossible situation. While they have to slash their deficits to reassure investors reluctant to lend to them, the debt crisis has also hammered the so-called "real economy," sending unemployment soaring. Many analysts, politicians and trade unions think that only government spending can restart growth.

Countries across Europe are struggling with high unemployment and sluggish economies: Overall, 23 million people are jobless across the EU, 10 per cent of the active population.

In Spain, unemployment has soared to nearly 23 per cent and closed in on 50 percent for those under age 25, leaving more than 5 million people, or almost one out of every four, out of work as the country slides toward recession.

Even countries in the so-called European "core", which are generally better off, are suffering. The French government was forced yesterday to revise down its growth forecast for the year from 1 per cent to just 0.5 per cent.

In fact, many now fear that Europe is on the verge of another recession, and leaders gathering in Brussels said that while austerity is important, more needs to be done for growth. Economists often note that cutting spending is just one way to slash deficits; another equally important method is to boost growth, which increases the amount of money pouring into government coffers.