European leaders arrived in Brussels on Monday for a key summit which they said would help bring about a return to growth but which economists predicted would mean more austerity.
Leaders were due to sign off on a 500 billion euro permanent rescue fund for the eurozone while agreeing to strict new rules to ensure EU nations managed balanced budgets.
Arriving for the meeting, German Chancellor Angela Merkel called on the EU to help Greece to achieve the budget targets they have been set.
Danish Prime Minister Elle Thorning-Schmidt, who’s country has the six month rotating EU Presidency, said economic growth and not just the debt crisis, was on the agenda.
“It is very important that we have a new discipline in our economies and second, we need to discuss growth and jobs in Europe,” said Thorning-Schmidt.
While an estimated 20 billion euros has been set aside for job creation, some MEPs think the real answer lies in better cooperation.
“If we want to solve the euro crisis we need to tackle the problem of solidarity, how we can mutualise the debt and how we can lower interest rates,” said Guy Verhofstaft, MEP from the Alliance of Liberals and Democrats in Europe.
The European Stability Mechanism was due to be signed, the 500 billion euro permanent bailout fund that could be operational as early as July.
Meanwhile a ‘fiscal compact’ will ensure nations manage their budgets effectively.