EU leaders confident and determined in face of economic crisis

Leaders agreed to use €5bn in unspent EU funds to upgrade energy and internet connections. And they raised the ceiling on EU aid to countries having difficulties. The credit line – which covers countries not using the euro – was lifted to €50bn.

Leaders also pledged €75bn in additional support to the International Monetary Fund to help countries in trouble.

Wrapping up a two-day summit, the leaders issued a joint statement saying the bloc had made “good progress” in implementing the €200bn stimulus package adopted in December. Leaders expressed confidence the measures – which include tax cuts and bank bailouts – would revive the economy but said it would take time.

“If needed, we will have to review it in the future, but now we have to concentrate on implementation,” president Barroso said.

The 27-nation bloc is already spending some €400bn – about 3.3% of its gross domestic product – over two years to combat the worst economic crisis in decades. Besides stimulus measures, that figure includes increases in social spending as unemployment rises. The EU jobless rate was 7.6% in January, the highest in over two years.

Many EU leaders have voiced concern about racking up deficits with spend-now-pay-later policies. The leaders said EU countries should return as soon as possible to deficits “consistent with sustainable public finances”. A number of countries are in violation of bloc rules requiring budget deficits to stay below 3% of GDP.

Looking ahead to the G20 summit on 2 April, leaders spelled out a common position on how to improve regulation and oversight of the financial industry.

The €5bn includes funds to bury climate-changing carbon and to bring gas from the Caspian Sea region. Interest in a new pipeline has grown since the dispute between Moscow and Ukraine in January halted Russian gas flows to Eastern Europe.

Leaders also approved the development of closer ties with countries to the east. The Georgia-Russia war has pushed this issue up the agenda.

The Irish government updated EU leaders on its plans for a re-run of the Lisbon Treaty referendum.