EU to spend €960bn creating jobs

In some good news for the 5.6m people under 25 and unemployed, European Union authorities announced a political deal on the EU's hotly-contested trillion euro budget running from 2014 to 2020.

The deal came just hours before leaders gather for the two-day summit.

After months of bitter argument, European Commission president Jose Manuel Barroso said a budget compromise was agreed at emergency breakfast talks.

This could accelerate the pumping of funds into schemes to get youngsters out of unemployment and into jobs or training schemes.

"Today we have agreed on this budget that will make investment in Europe possible," Barroso said of the agreement on the €960bn, which will still need to be approved by the EU's 754 lawmakers.

"This is the growth fund for Europe," Barroso added.

There was no immediate comment from austerity-minded hardliners Britain, Germany and the Netherlands, which earlier this year shot down Commission plans to increase spending by five percent over the next seven years.

Austerity takes a toll

With EU nations set on belt-tightening spending cuts to beat Europe's debt crisis, leaders instead agreed for the first time ever to cut spending by three percent.

But as leaders headed to Brussels, EU staff went on an unprecedented strike against austerity and striking rail-workers in Belgium snarled domestic and international trains.

In all, austerity and recession have left 26m people unemployed across the 27-nation bloc, one out of four aged between 16 and 25.

In struggling southern states Portugal and Spain, one-in-two youngsters is out of a job while in Greece three-out-of-five people are jobless.

Even in Italy, the eurozone's third economy, two-out-of-five youngsters are on the dole.

The leaders are expected to speed up disbursements from next year of €3.6bn of the €6bn fund to help jobless youngsters. The legislators plan to improve access to credit and increase youth mobility across European borders.

The centre-piece of the scheme is the implementation of a Europe-wide guarantee of a job or training for young people within four months of their finishing studies or losing their job.

"This is an urgent situation and we urge European leaders to act to confront it," said Bernadette Segol from the European Trade Union Confederation (ETUC).

EU President Herman Van Rompuy describes the problem as "one of the most pressing issues in most, if not all, of our member states" which leaders simply must tackle if the union is to prove its worth.

Survey shows European project in 'disrepute'

Talk of a lost generation and concern over popular discontent have fed support for extremist political parties and bred dissatisfaction with the European project and animosity towards EU institutions.

A Pew Research survey last month branded the European Union "The New Sick Man of Europe", showing favourable opinion of the EU slumping from 60% last year to just 45% now.

"The European project now stands in disrepute across much of Europe," it said.

Eastern European states continue to prepare to join the bloc of 500m people and none of the 17 nations that share the euro - about to become 18 with Latvia - keen to leave.

Serbia is expected to win endorsement from the EU summit to begin membership talks no later than January after having agreed to tough EU-set conditions to normalise ties with its breakaway former province of Kosovo.

And Croatia on Monday (1 July) officially becomes the 28th EU state.

Kosovo itself is also expected to get the go-ahead for talks on a Stabilisation and Association Agreement with the EU, a prospect that its foreign minister Enver Hoxhaj hailed as a "milestone".

But citizens from the core EU states are increasingly opposed to including the poorer eastern countries.

Conservative British Prime Minister David Cameron has called for powers to be taken back from Brussels and for Britain's refashioned membership to be put to an 'in-out' referendum.

Source: AFP via I-Net Bridge