European Union leaders will be asked to allocate billions of euros to "a new youth employment initiative" when they meet this week to haggle over the bloc's 2014-20 budget, dpa quoted EU President Herman Van Rompuy as saying Tuesday. The EU has struggled to get a handle on unemployment, especially in the crisis-battered eurozone, where it has remained at a record high of 11.7 per cent for three consecutive months through December. Joblessness among young people has been of particular concern, with warnings that a "lost generation" may be in the making. Greece and Spain have posted youth unemployment rates of above 55 per cent. "Youth unemployment is the biggest challenge in Europe right now," Van Rompuy said in a message issued ahead of the two-day Brussels summit. "That is why, on Thursday, I will propose a new youth employment initiative of several billions of euros." "This money will be targeted to the most afflicted regions, to get young people back into jobs," he added. Van Rompuy, who will chair the summit talks on Thursday and Friday, also said that he wants to boost spending - in real terms - on research, innovation and education. The budget "must be an engine for growth and jobs in the future," he said. At the same time, he warned that the austerity implemented in EU countries will have to be reflected in the bloc's budget too. "The budget must be a budget of moderation, reflecting the savings efforts in our member states," Van Rompuy said. "That is why - for the first time ever - there will be a real terms cut, compared to the current budget." Van Rompuy had proposed a maximum of 1.01 trillion euros (1.37 trillion dollars) in total spending commitments over the seven years when the leaders last met in November - down from the 1.09 trillion euros proposed by the European Commission, the EU's executive. Some diplomats in Brussels said they expect him to suggest even further savings at this week's summit, at the insistence of Britain, Denmark, Germany the Netherlands and Sweden. French President Francois Hollande on Tuesday spoke of the possibility of the core budget commitments eventually amounting to 960 billion euros - down from the 972 billion euros previously proposed by Van Rompuy. "I have to look for an agreement," Hollande told EU lawmakers during a debate at their plenary in Strasbourg, France.
