EU trumpets deficit, growth pacts amid Greek irritation | business | Hindustan Times
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EU trumpets deficit, growth pacts amid Greek irritation

European leaders trumpet a pact to banish deficits and kick-start job creation at a summit on Monday overshadowed by tensions over a German drive to strip Greece of budget sovereignty.

business Updated: Jan 30, 2012 22:06 IST

European leaders trumpet a pact to banish deficits and kick-start job creation at a summit on Monday overshadowed by tensions over a German drive to strip Greece of budget sovereignty.

Leaders from the 27 European Union states were scheduled to hold their first summit of the year from 1400 GMT (IST 7.30 pm) to finalise a German-driven pact to toughen fiscal discipline despite Polish demands revealing new tensions. They do so amid a general strike in Belgium over deepening austerity in their own country.

EU officials’ insistence that a corner is being turned in the crisis were reinforced by an improved economic confidence survey and another successful debt auction for Italy, which was the source of deep worries last year.

The consumer and business sentiment index compiled by the European Commission halted a 10-month skid, showing the medium-term prospects for the euro zone economy on the up.

What Brussels deems a “moderate” recession is nonetheless looming large over Europe.

So leaders will also try to find ways to jumpstart the economy and reduce an unemployment rate averaging 10% across the 17-nation euro zone.

Ideas include lowering the tax burden on employers to get more people hired, and giving all youths guaranteed options in work, training or study.

Two years into a crisis that forced Greece, Portugal and Ireland to take bailouts, European governments will put the finishing touches on the new “fiscal compact” to prevent future debt debacles.

Britain opted out of the plans in December, and Polish Prime Minister Donald Tusk said on Monday that Warsaw is thinking again. “We will not accept it in its present form,” said Tusk, who wants non-euro governments to be given a bigger say in euro zone economic governance, which France rejects.

European stock markets and the euro fell on Monday on fears over Greece’s debt.

Public anger over the austerity-first policy sweeping the euro zone was on full display in Belgium, where the strike halted the Eurostar and Thalys international rail lines, forced flight cancellations and brought transport in Brussels to a standstill.

Countries that may want to tap future rescue funding will have to have ratified this treaty on fiscal discipline in order to do so.