EU leaders shift focus from austerity to growth

Officially, the half-day summit focused mainly on ways to rekindle growth and create jobs at a time when governments across Europe currently have to cut public spending and raise taxes to tackle mountains of debt.

Heads of European states and governments approved a permanent rescue fund for the euro zone and put the finishing touches on a so-called “fiscal compact” for stricter budget discipline.

With Britain standing aloof, most of the other 26 EU leaders agreed on Germany’s fiscal pact to write balanced budget rules into their national law, despite many economists' doubts about the economic wisdom of effectively outlawing deficit spending.

The summit was expected to announce that up to EUR20 billion of unspent funds from the EU's 2007-2013 budget will be recycled towards job creation, especially among the young.