EU leaders agree on measures to boost growth, build banking union

European Union (EU) leaders on Thursday and Friday have agreed on a series of measures to boost growth and jobs, and to build a European banking union to maintain financial stability. "It's been a productive summit," Herman Van Rompuy, European Council President, told reporters at a press conference after a meeting of EU leaders. According to Van Rompuy, EU leaders have agreed to scale up the Youth Employment Initiative to eight billion euros (about 10.4 billion U.S. dollars), with most of the money concentrated in the first two years. To promote jobs for youths, any funds left unspent in the Initiative will go in priority to employment, he added. Small and medium-sized enterprises (SMEs) would also benefit from the summit in the form of easier access to financing. "To help millions of SMEs, the biggest employers in our countries, get through the credit crunch in some countries, we will combine funds from the EU budget and the European Investment Bank," Van Rompuy said. This meeting was also devoted to long-term structural reforms, which are key to make the EU economy more resilient and more competitive globally. The leaders also discussed ideas to overcome bottlenecks to competitiveness, growth and jobs. One of the proposals is to "conclude contracts between a member state and the EU institutions and potentially associated with solidarity mechanisms," he said. "This is still uncharted territory, but we identified some principles, on which there are convergences," Van Rompuy said. The European Council President also hailed progress in restoring financial stability. "We have halved public deficits, we're now equipped to deal with financial turmoil and we've committed ourselves to a long-term roadmap to reinforce our Economic and Monetary Union (EMU) for the future." He pointed to the efforts to build a banking union as the key step in reinforcing the EMU and restoring normal lending to the economy. As a crucial step in setting up the banking union, EU finance ministers on Thursday morning agreed to harmonize "recovery and resolution rules" for all EU member states to deal with failed banks. "In fact this is a bridge towards the Single Resolution Mechanism for banks, to which all leaders are firmly committed. We're looking forward to the Commission proposal very shortly, to be adopted within a year by the end of this parliamentary term," Van Rompuy said. To break the vicious circle between banking crisis and sovereign debt crisis, eurozone finance ministers last week also agreed on the main features for direct recapitalization of banks in trouble. "This is another bridge towards the banking union. So the bridges are ready or under construction, and we're getting set to cross over, starting with the transition towards the Single Supervisory Mechanism for all eurozone banks in 2014," Van Rompuy said.