Chancellor Merkel faces a battle for re-election in September
EU leaders have agreed to put 6bn euros (£5bn; $8bn) into youth training schemes, while admitting that much-needed job creation will take time.
Germany's Chancellor Angela Merkel said the key was improving competitiveness and not creating new pots of money.
But one senior EU official described the sum as "a drop in the ocean". Nearly a quarter of people aged 18 to 25 in the EU have no job.
EU leaders are holding a second day of summit talks in Brussels on Friday.
Austria's Chancellor Werner Faymann described the 6bn-euro jobs initiative as "a first step".
The European Commission has also presented a plan to trigger much-needed bank lending to small and medium-sized enterprises (SMEs), using an extra 10bn euros in funding for the European Investment Bank. The idea is to encourage private banks to lend by giving them EIB guarantees.
There was relief on Thursday when, after months of wrangling, a deal was clinched on the EU's long-term budget.
The 27 leaders backed the deal reached with the European Parliament - a 960bn-euro budget for 2014-2020, which cuts real spending for the first time.
Unemployment rates
- Greece - 27%
- Spain - 26.8%
- Portugal - 17.8%
- Cyprus - 15.6%
- Rep of Ireland - 13.5%
- Italy - 12%
- France - 11%
- EU average - 11%
- UK - 7.7%
- Germany - 5.4%
Source: Eurostat, April 2013 (Figures for Greece & UK are for February 2013)
There was a last-minute delay, with UK Prime Minister David Cameron seeking reassurances that new arrangements on rural development funds would not lead to £300m being deducted from the British rebate - which some French officials had been suggesting. He was told the rebate would remain unchanged, the BBC's Europe editor Gavin Hewitt reports.
On the eve of the summit, draft plans were also agreed on agricultural reform and how to rescue troubled banks.
Under the new budget deal unspent money will be transferred from one year to the next, rather than returning to national budgets as at present.
The leaders are also expected to approve accession talks for Serbia, as well as formalising Croatia's entry into the EU next week.
Serbian Prime Minister Ivica Dacic said on the eve of the summit that he hoped to see his country join within five years at most.
Source: BBC News - Business http://www.bbc.co.uk/news/world-europe-23095198#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa
