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TheStreet Open House

EU Strikes 2 Major Deals, Stumbles On Unemployment

By JUERGEN BAETZ

BRUSSELS (AP) ⿿ The past week has seen a rare flurry of activity in the European Union. Two major deals have been brokered ⿿ a ⿬960 billion ($1.3 trillion) budget for the 27-country bloc and a system for rescuing banks without making taxpayers foot the bill. But the leaders from the 27 nations achieved little progress on fighting youth unemployment and speeding up plans for a so-called banking union.

Here is a look at what progress has been made this week to overcome the bloc's economic crisis and what still needs to be done:

PROGRESS: A 960 EURO BILLION BUDGET TO FUND EU PROJECTS.

The blueprint for the 2014-2020 budget includes the bloc's first-ever spending cuts, as many of its countries are in recession and struggling to reduce their national debt.

Separate from national finances, the EU budget funds everything from joint infrastructure projects and farming subsidies to development aid, research and employment measures.

The seven-year plan was brokered early Thursday after months of infighting between the European Parliament and governments. An EU summit of leaders in Brussels then endorsed the compromise, sending it to Parliament for a formal vote next Wednesday.

DEADLOCK: NO NEW INITIATIVES TO TACKLE RECORD UNEMPLOYMENT

Unemployment is at an all-time high of 11 percent for the EU, which forms the world's largest economy, and stands at 12.2 percent for the group of 17 EU countries that use the euro.

The plight is worse for the young, with almost one in four people aged under 25 without a job. In crisis-hit Greece and Spain, that rate is more than 50 percent.

EU leaders agreed to speed up spending up to 6 billion euros â¿¿ about 0.05 percent of the bloc's annual output of 13 trillion euros â¿¿ to fight youth unemployment starting next year. However, they had announced that step since last year, and half of the money is only repackaged from other budget positions.

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