In a joint statement on economic growth after the summit, EU leaders acknowledged that cutting budgets was “not in itself sufficient.” The European Union will dedicate €82 billion ($107 billion) to fighting unemployment, Herman Van Rompuy, the EU president announced. The money will come out of so-called structural funds, which were set up to subsidize economically weak regions in the union.
German Chancellor Angela Merkel called the treaty “an important step forward in Europe’s efforts to overcome the sovereign debt crisis." Britain and the Czech Republic refused to sign the pact, which still needs ratification in the other 25 EU member states. Most member states are likely to ratify, though Ireland may threaten to hold a referendum on it, while in France, presidential elections could affect French participation. The UK government has in the past made it clear that it was not prepared to yield any budgetary control to Brussels.
The accord was an initiative by Chancellor Merkel. But Germany is seen by many as one of the main culprits for the lack of progress in solving the debt crisis. Europe’s biggest economy and the main contributor to bailout packages and rescue funds, Germany has been trying to implement a strict therapy of cutting deficits throughout the eurozone, where a range of countries including Greece, Portugal, Spain, and Italy have amassed critically high levels of sovereign debt and at the same time lost the trust of international investors because of weak economic performance.
Leaders in Brussels appeared to agree that more should be done to promote growth throughout Europe and to facilitate the movement of labor. “If we just keep cutting back on spending, our children won’t inherit a house, they’ll just inherit a mortgage,” said Martin Schulz, president of the European Parliament.