EU leaders to hold summit on Jan. 30 to discuss jobs, growth

European Union leaders will hold a summit on Jan. 30 to discuss jobs and economic growth, EU President Herman Van Rompuy said.

“I’m preparing this meeting intensively,” Van Rompuy said in a video message posted on the EU’s website Tuesday. “It will be focused on jobs, and that’s a big challenge in a context where zero growth is expected in most of our economies. In some of them there will even be a recession.”

Euro-area governments yesterday pledged to channel 150 billion euros ($196.2 billion) to the International Monetary Fund as the European Central Bank bolstered its support for sagging sovereign bond markets. British wariness of the IMF program undermined the euro region’s goal of drawing an additional 50 billion euros from the rest of the EU. 

IMF Managing Director Christine Lagarde warned Tuesday that the euro area needs “special attention” to stop contagion from its sovereign-debt crisis sweeping through the global economy.

“Without action, the world economy could be swept into a downward spiral of collapsing confidence, weaker growth and fewer jobs,” Lagarde said in a speech in Lagos, Nigeria.

In announcing the EU summit, Van Rompuy said “strong action on employment” is needed to ensure economic growth.

“Bringing financial stability to the euro zone remains absolutely key for our future,” he said, adding that EU leaders “have taken major decisions this year to overcome the sovereign-debt crisis.”

EU policy makers are still behind the curve in their efforts to contain the turmoil in financial markets, according to Mohamed El-Erian, head of the world’s biggest bond fund.

“The contamination has been allowed to travel from the outer core all the way in and threaten the inner core,” El- Erian, chief executive officer of Pacific Investment Management Co. in Newport Beach, California, said in a Bloomberg interview. “It is now a crisis for the euro zone as a whole.” He sees a more than 1 in 3 chance that the euro area will break apart and trigger a financial crisis akin to the one that devastated the global economy in 2008. 

(Bloomberg)