All European Union countries except Britain and the Czech Republic agreed Monday to sign a new treaty designed to stop overspending in the eurozone and put an end to the bloc's crippling debt crisis, while EU leaders also pledged to stimulate growth and employment.
The new treaty, known as the fiscal compact, was agreed at a summit of European leaders in Brussels on Monday. It includes strict debt brakes and makes it more difficult for deficit sinners to escape sanctions. The 17 countries in the eurozone hope the tighter rules will restore confidence in their joint currency and convince investors that all of them will get their debts under control.
"We have a majority of 25 that will now sign up to the fiscal compact," Swedish Prime Minister Fredrik Reinfeldt said Monday night after the summit of European heads of government in Brussels.
Although the new rules only apply to the 17 euro states, the currency union wants to get broad support from the other EU states, in hopes the accord will eventually be integrated into the main EU treaty.
Britain had said in December it wouldn't sign the new treaty. Reinfeldt said the Czech Republic didn't sign because of parliamentary procedural problems.
"I don't want to stand in the way of what they think they should do," British Prime Minister David Cameron said of the other countries. "But this is not an EU treaty because I vetoed that."
Leaders at the summit also promised to stimulate growth and create jobs across the region, an acknowledgment that their exclusive focus on austerity has had painful side effects.
"Yes we need discipline, but we also need growth," said Jose Manuel Barroso, the president of the European Commission, the EU's executive arm.
The leaders pledged to offer more training for young people to ease their transition into the work force, to deploy unused development funds to create jobs, to reduce barriers to doing business across the EU's 27 countries and ensure that small businesses have access to credit.
However there was no offer of any new financial stimulus.
"We must do more to get Europe out of the crisis," the leaders said in a statement.
Barroso said that there is still $107.5 billion in development funds that have yet to be allocated that small and medium businesses can use for various purposes, including as guarantees to get funding from banks.
He also said the Commission will dispatch action teams to the eight countries where youth unemployment is the highest and help fund apprenticeships and young startups.
Europe's debt crisis has put the continent and its leaders in an almost impossible situation. While they have to slash their deficits to reassure the financial markets and investors, the crisis has also sent unemployment soaring. Many analysts, politicians and trade unions think that only government spending can restart growth.
Overall, 23 million people are jobless across the EU, 10 percent of the active population. In Spain, unemployment has soared to nearly 23 percent and closed in on 50 percent for those under age 25, leaving more than 5 million people out of work as the country slides toward recession.
Even the most influential countries in Europe, which are generally better off, are suffering. The French government was forced Monday to revise its growth forecast for the year from 1 percent down to just 0.5 percent.
Many now fear that Europe is on the verge of another recession, and the leaders in Brussels said that, while austerity is important, more needs to be done for growth. Economists often note that cutting spending is just one way to slash deficits; an equally important method is to boost growth, which increases the amount of money pouring into government coffers.
While the leaders focused on walking the line between reining in spending and stimulating growth, the elephant in the room was Greece.
Greece and its bondholders have come closer to a deal to significantly reduce the country's debt and pave the way for it to receive a much-needed $170 billion bailout.
French President Nicolas Sarkozy said Monday he hoped a final agreement on Greece would be achieved "in the coming days," either at a special meeting of eurozone finance ministers or leaders.
Negotiators for Greece's private creditors said Saturday that a debt-reduction deal could become final within the next week. If the agreement works as planned, it could help Greece avoid a catastrophic default, which would be a blow to Europe's already weak financial system.
But European officials are afraid that even that deal may not be enough to fix Greece's finances, with some blaming Athens for dithering on its promise to cut spending and introduce austerity measures.
This program aired on January 30, 2012. The audio for this program is not available.