BRUSSELS — Europe's leaders travel to Brussels on Thursday, hoping to chart the continent's way back to growth as figures show unemployment in the 17-country eurozone has spiked to its highest level since the euro was established in 1999.
While the two-day summit is for once taking place amid relative calm on financial markets, Europe's population is only starting to feel the full impact of the massive budget cuts and economic uncertainty of the past three years.
New figures showed that unemployment in the 17-country eurozone hit 10.7 percent in January — the highest level since the currency union launched in 1999. The situation in the 27-country European Union is not looking much better, with unemployment reaching 10.1 percent in the first month of the year.
Policymakers across Europe have made spurring growth and jobs their new mantra, but so far their proclamations have yielded few results. Many economists want governments to stop slashing budgets as the continent heads into another recession, warning that more cuts will further destabilize the economy and make the debt situation even worse.
"This crisis and some remedies puts social cohesion at stake. It can also damage the European idea itself," said EU President Herman Van Rompuy. "That is why we have to tackle inequalities and poverty."
Anti-austerity protests have moved out of the crisis hotspots like Greece or Spain and unions across Europe staged demonstrations across Europe the day before the summit. Many feel that recent efforts by the EU and the European Central Bank have only benefited banks and investors, while ordinary people continue to suffer.
But political leaders say that large-scale spending won't kick-start growth and are betting instead on reforms to modernize Europe's economy by cutting red tape, making it easier to hire and fire people, and investing in better broadband networks.
Yet even the EU acknowledges that such economic reforms will take time to show results and has warned that governments often don't follow up on the commitments leaders make at their regular Brussels get-togethers.
Separate from the summit of EU leaders, the finance ministers of the eurozone are meeting to check on Greece's progress in implementing promised spending cuts and economic reforms. Their discussions will likely take place in a more benign atmosphere after a panel convened by a securities dealers' association ruled that the restructuring of Greece's government debt is not yet a credit event, further .
Greece has a wide array of policies and cuts to implement before it can receive a first batch of money from a €130 billion ($173 billion) bailout Athens needs to avoid bankruptcy.
So far, it looks like it's impressing its creditors.Comment on this story
Germany's finance minister, Wolfgang Schaeuble, said he was optimistic that his eurozone colleagues would release the money to Greece.
"From what I heard ahead of time, it looks as if Greece has made big progress," he said, referring to Athens' implementation of reforms and spending cuts. "Because of that I believe we will make a big step forward today."
Schaeuble's French counterpart Francois Baroin was equally optimistic over the disbursement.
"Everything that was asked was generally done," he said. "We are in favor of unblocking (the funds)."