PREVIEW: EU hopes for no "drama" despite unfinished eurozone business Eds: EU summit set to begin at 1700 GMT
BRUSSELS, Mar 01, 2012 (Menafn - dpa - McClatchy-Tribune Information Services via COMTEX) --European Union leaders have been repeating for months that austerity is not enough to solve their bloc's economic problems. A summit this week will offer them another chance to give substance to their pledges.
But the hunt for growth-enhancing measures is taking place while efforts to solve the eurozone debt crisis are still a work in progress, with Greece's new rescue still in need of final approval and no progress on boosting the currency bloc's bailout funds.
"We need to provide a sense of new direction and hope" to make the tough austerity measures in many EU countries more socially acceptable, European Commission President Jose Manuel Barroso insisted on Tuesday.
Draft EU summit conclusions take up some of the ideas from an eight-point plan to revive the EU's economy that was presented last week by the leaders of 12 nations -- including Italy, Spain and Britain, but not France or Germany.
The aim is to remove internal barriers to trade and investment, which, for example, currently make it difficult for German lawyers to offer their services in France or for a Spanish start-up to attract capital investors from Britain.
"The internal market could boost (our) gross domestic product by two to three percentage points," EU Market Regulation Commissioner Michel Barnier predicted Monday, quoting a commission report written by Mario Monti before he became Italy's premier.
Draft papers set deadlines to create an EU digital market by 2015 and a European research area by 2014. They state that, by June, project bonds to fund infrastructure projects should be agreed and a Franco-German-British row on the EU patent should be resolved.
Furthermore, they touch upon controversial tax and labour issues -- hinting at the need to put an end to collective wage bargaining and getting the EU to negotiate anti-tax evasion deals with countries like Switzerland.
The two-day EU summit, starting on Thursday evening, will come straight after a meeting of the Eurogroup panel of eurozone finance ministers, called to review whether Greece has adopted enough reform and austerity measures to qualify for its newest bailout.
Athens needs the 130-billion-euro (175-billion-dollar) package in time for a bond redemption on March 21 to avoid bankruptcy. But final approval depends on the successful completion next week of a parallel debt write-off deal with private banks, worth over 100 billion euros.
The eurozone is also facing strong international pressure to do more to protect Italy and Spain from the fate that has befallen bailout recipients Greece, Ireland and Portugal.
For months, the currency bloc has toyed with the idea of combining the 500-billion-euro European Stability Mechanism (ESM) -- its new bailout fund to be launched in July -- with the 250 billion euros left in its predecessor, the European Financial Stability Facility.
Over the weekend, Group of 20 economies such as China, Brazil and the United States said there would be no increase in the bailout facilities of the International Monetary Fund (IMF) until the eurozone acted to boost its own.
But Germany's reluctance to dig deeper into its pockets, at least as long as the Greek bailout package remained in the balance, has resulted in the postponement of eurozone decisions that were expected this week.
"It would not be the first time that we would be a little bit too late and behind the curve," Eurogroup chief and Luxembourg premier Jean-Claude Juncker drily told reporters on Wednesday night.
The issue should now be resolved before the end of March, Barroso and Juncker said.
Barring surprises, the most concrete result of the summit was set to be the signature of a German-sponsored budget discipline pact.
"This European Council should be -- you never know, but should be -- with less drama than the last summits. I'm sure you will agree, a little less drama will do no one any harm," Barroso quipped.
The so-called fiscal compact was agreed at the last summit in January. All EU nations except Britain and the Czech Republic are expected to sign it on Friday -- though uncertainty was cast over its ratification in Ireland after a referendum was called there.
Leaders were also poised to reappoint EU President Herman Van Rompuy for another two-and-a-half term and give him the additional role of chairing regular eurozone summits.
Finally, Serbia is in line to be recognized as an EU candidate, after striking cooperation deals with Kosovo. But officials were unsure if Romania would continue blocking the move, ostensibly over Serbia's treatment of an ethnic Romanian minority.
Bucharest prevented EU affairs ministers from closing the matter on Tuesday. Speculation was rife that it was actually trying to flex its muscles in protest at being blocked by the Netherlands from joining the European border-free Schengen zone.
EU partners were "extremely critical" of Romania's actions, one diplomat said, predicting that its resistance would be overcome.
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