European leaders are loosening the shackles on national budgets as the euro-area recession deepens and unemployment climbs, with pro-growth calls coming even from German Chancellor Angela Merkel, the leader most closely associated with austerity.

Merkel went into a European Union summit today urging a stepped-up fight against youth unemployment, now over 50 percent in Greece and Spain, and skipped the appeal to fiscal discipline that has been her standard message throughout the debt crisis.

"We will have one focus above all: the fight against youth unemployment," Merkel told reporters before the 27 national leaders gathered in Brussels. "We passed a growth pact last summer and what matters now is putting life into this growth pact. The money is there, we have to get the money to the people so young people in Europe get jobs."

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