Brussels: EU leaders tackled Friday boosting jobs and growth to mend some of the damage caused by austerity policies, after France and Germany reached a compromise deal on bank supervision key to easing the bloc’s crisis.
After an 11-hour session into the wee hours to reach the bank supervision deal, in the second and final day of their summit EU leaders were seeking ways to offset the worst effects of spending cutbacks and tax hikes adopted in an effort to tame the eurozone debt crisis.
Violent protests in Greece against more spending cuts and the threat of a general strike in Spain highlighted the risks that unadulterated austerity measures can spark social unrest.
Leaders will also take up foreign affairs, with conflicts in Syria and Mali pressing, while Iran and its disputed nuclear programme is a persistent concern.
Agreement on the banking union proposal was crucial as it clears the way for the bloc’s new debt rescue fund, the European Stability Mechanism (ESM) to help failing banks directly, without going through governments and thus increasing national debts.
As the talks began Friday, French President Francois Hollande said it was “a good deal”. German Chancellor Angela Merkel made no comment.
 For Carsten Brzeski, chief economist at ING, leaders had achieved “a typical European compromise, which had something for everyone.”
France had wanted the system up and running for all banks by January 2013, in line with a summit agreement from June, while Germany wanted implementation to be slower, at first involving only the biggest bank groups.
A statement in the early hours said the 27 EU leaders set themselves “the objective of agreein on the legislative framework by 1 January 2013” while work on putting the union in place would come “in the course of 2013.”
Merkel said the timetable was still “very ambitious,” stressing the need for “quality before speed,” while Hollande pushed again for quick implementation.
European Commission chief Jose Manuel Barroso said European Central Bank (ECB) head Mario Draghi had told leaders a “reasonable” estimate for implementation would be “less than one year but certainly more than one or two months.”
 “I can’t give you a precise date,” EU President Herman Van Rompuy, adding that finance ministers would take up the issue on November 12.
Leaders now take up the ‘Compact for Growth and Jobs’ adopted in June which identified a series of measures — boosting investment, promoting research and development — to mend some of the damage caused by austerity.
Progress, however, has been patchy given the pressure on government budgets.
Leaders “welcomed progress made so far but also called for swift, determined and result-oriented action to ensure its full and rapid implementation,” a draft of the summit conclusions said.
The case for jobs is self-evident — EU unemployment is at record highs while in Greece and Spain, rates run around 25 percent, with youth joblessness near a demoralising and hugely damaging 50 percent.
France’s Hollande warned in the early hours against “adding austerity to austerity” by imposing harsh conditions on Spain if it were to request a full sovereign European bailout.
 Greece meanwhile will have to stick to the terms of its debt bailout but earned praise for its efforts to balance the public books, suggesting Athens’ request for a two-year extension might get a more sympathetic hearing.
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