Crisis-hit EU states get wiggle room on deficits

European leaders meeting in Brussels on Thursday hinted that some countries could be given more time to meet their deficit goals as they address high unemployment and seek to ease the pain of tough austerity measures.

The president of the European Commission told CNBC that while countries should pursue reforms and meet the deficit targets set under EU rules, there was room for maneuver if countries showed that they were making an effort to implement reforms.
"The stability and growth of the EU has incorporated the necessary flexibilities, so provided the members states make the structural adjustments required, we proposed the extensions to fulfill the debt target as we`ve done in Greece two times, in Portugal, in Spain, and may do so again, provided that countries make a structural effort...and France too" Jose Manuel Barroso said.
While these reforms were taking shape, it was important to support the issue of youth employment, he said, adding that the Commission would mobilise funds to help companies employ young people.
"Now we are mobilising...European social funds to help young people find apprenticeships, traineeships in companies in small and medium enterprises that might need that kind of help. It`s better to have this kind of solution for the short term than simply to accept this very high levels of unemployment .
The topic of unemployment in the euro zone is high on the agenda at the EU summit, with a particular focus on youth unemployment. In January, 23.6 percent of young people in the EU under the age of 25 were unemployed, up from 22.4 percent a year before. In Spain and Greece up to 50 percent of young people are struggling to find work as their economies flounder.
"Of course, we know well that the structural solution for youth unemployment, and for employment in general, has to do with the health in the economy and the reforms to increase competitiveness [but in the meantime} while these reforms take place, it is important to support through target policies these very important issues of youth unemployment," he said.
EU leaders continue their summit in Brussels on Friday. Countries such as France who have said that they will miss the target of a budget deficit below 3 percent of gross domestic product (GDP) have been granted some leeway.

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