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2010-06-17 12:03:21
EU leaders are to meet to tackle the challenge of getting economic growth back
on track while reining in the worst public debts for decades.
Leaders are intent on preventing contagion from the Greek budget crisis.
The summit comes amid particular concern about public finances in Spain, the
fifth biggest eurozone economy.
Meanwhile, British Prime Minister David Cameron, attending his first EU summit,
has promised to play a "positive" role in the bloc.
"We will of course always defend our national interests, as others do, and our
national red lines," he added, speaking alongside EU Commission chief Jose
Manuel Barroso early on Thursday.
Both Mr Cameron and Mr Barroso said the EU should be focusing on "substance"
rather than institutions.
Earlier Mr Barroso served up an English cooked breakfast of bacon, sausage and
egg for Mr Cameron.
Spanish woes
Among the subjects for discussion at the summit are plans to improve budget
scrutiny and establish sanctions to punish reckless spending.
EU leaders will back a bank levy to ensure that any future bail-out is financed
mainly by banks rather than taxpayers.
Analysis
Continue reading the main story Gavin Hewitt
Gavin Hewitt,
BBC Europe editor
Britain agrees with the discipline of sanctions but does not see why they
should apply to countries that do not use the euro
Gavin Hewitt Mr Cameron comes to Brussels
Although details remain unclear, they will urge the US and other major economic
powers to embrace a bank levy system at the G20 summit next week.
Officials have said concerns about the Spanish economy are not on the formal
agenda of the summit.
But the issue is still expected to be a focus of attention.
On Thursday, the cost of borrowing for the Spanish government hit a record high
as confidence in Spain's ability to repay its debts fell.
The government admitted this week that foreign banks were refusing to lend to
some Spanish banks.
Spain has been forced to deny reports that it is in talks with the IMF over a
bail-out package to help it manage its debts.
The country has announced budget cuts and - just hours before the summit -
unpopular labour reforms to avoid a Greek-style meltdown.
The eurozone has set up a 750bn-euro ( 623bn; $920bn) bail-out mechanism as a
safety net in case any more countries suffer a similar debt crisis to Greece.
Budget surveillance
The draft summit document mentions EU member states presenting their budgetary
plans to the European Commission each spring, "taking account of national
budgetary procedures", BBC Europe editor Gavin Hewitt reports.
He says there may be enough wriggle room in that language for the British to
avoid a clash.
The UK has made it clear that its budget must go before the British parliament
before being presented to EU officials for scrutiny.
However, the UK's pre-budget report is already fed into EU finance ministers'
discussions before the full budget appears in April, a UK diplomat told the
BBC.
The EU leaders are also expected to approve a new 10-year strategy for jobs and
growth, drafted by the Commission, called "Europe 2020".
It sets out a range of targets for employment, training and investment.
Spending on research and development would reach 3% of gross domestic product
(GDP) under the plan.