The EU has more than 23 million unemployed people and there are fears that wide-ranging budget cuts will harm enterprise and training.

Cuts need to be "smart" - well-targeted - to allow room for future growth, the European Commission says.

Most member states - and not the UK - are expected to sign up to a new budget treaty, or "fiscal compact".

The goal is much closer co-ordination of budget policy in the 17-nation eurozone.

Diplomatic wrangling continues over the influence of non-eurozone countries in the new institutional set-up.

The UK opted out, in a blaze of publicity last month, but did secure observer status in the discussions.

Poland is insisting that it and other countries preparing to join the euro should be fully involved in the eurozone negotiations.

Currently the draft treaty says signatories will hold summits at least twice a year. The attendance of non-euro countries is left to the discretion of the summit president, with the words "will invite when appropriate and at least once a year".

The Czech Republic may delay joining the treaty because of a split in its ruling coalition and the Republic of Ireland may decide it has to put it to a referendum.

While France may be content with a eurozone-only membership, Germany is keen to include countries like Denmark, Poland and Sweden, not yet in the euro.

The Brussels summit coincided with a general strike in Belgium in protest at recent austerity measures, which has brought most of the city's transport system to a standstill and disrupted international trains and flights.

Staff were asked to arrive for the 14:00 (13:00 GMT) summit at 05:30 to avoid the disruption.

bbc.com