Moves to re-balance European economic policy away from austerity alone and kickstart growth gathered pace Tuesday as the EU called leaders to extraordinary talks after a voter backlash.
European Union president Herman Van Rompuy announced a May 23 "informal dinner of heads of state or government" in Brussels to precede a decisive summit already scheduled for June 28-29.
The meeting will see French Socialist president-elect Francois Hollande take his seat among fellow EU leaders for the first time.
German Chancellor Angela Merkel has so far resisted any major shift away from budgetary consolidation as the bedrock solution to twin sovereign and banking debt crises.
She wrote to Hollande on Tuesday saying "it is up to us to take the necessary decisions for the European Union and the eurozone, to prepare our societies for the future and protect and advance prosperity in a sustainable way."
The head of the Eurogroup of finance ministers, Luxembourg Prime Minister Jean-Claude Juncker, said he agreed with Hollande that budgetary consolidation should be accompanied by growth-enhancing measures.
"They are two sides of the same coin," he said.
"But the budgetary treaty must be ratified," Juncker also stressed, referring to a pact agreed by 25 EU states minus Britain and the Czech Republic that obliges states to aim for balanced budgets.
Juncker argued that separate moves should be made to raise European Investment Bank reserves -- a 10-billion-euro ($13-billion) capital increase has been proposed -- and release more EU structural funds to invest in areas likely to generate lasting returns.
As with so many such gatherings over the past two years, the May meeting could yet end up dominated by problems in Greece -- where a majority voted in a weekend general election for anti-austerity parties.
Political leaders in Athens are struggling to form a coalition able to enact cuts that were a condition for new loans from the European Union and International Monetary Fund.
Trouble within the far bigger eurozone economy of Spain, where the banking system is loaded with bad debts requiring more state aid, is also likely to vie for the EU leader's attention.
British Prime Minister David Cameron meanwhile remains fiercely opposed to any increase in EU spending -- which the European Commission says is the way to deliver quicker growth.
Demanding that national capitals "seize the moment," Commission head Jose Manuel Barroso said: "If we are serious about investment for growth, we need to agree an EU budget for the next seven years that shifts the focus of spending to growth-enhancing measures.
"A turnaround can be achieved by the end of this year if the necessary decisions are taken now," Barroso said, while maintaining that budgetary discipline lies at the root of any sustainable economic policy.
Barroso has proposed a 6.8-percent or 9.0-billion-euro increase in the EU's 2013 budget to 138 billion euros, and an overall EU outlay of more than a trillion euros by the end of the decade.
Bigger member states have so far rejected the 2013 figure which they say is way above inflation and incongruous at a time when national governments are cutting domestic spending.
Outgoing French President Nicolas Sarkozy was among the leaders who also want to slash 100 billion euros from the 2014-2020 EU budgetary cycle.
In another clear nod to Hollande, fellow French Socialist and head of the World Trade Organization, Pascal Lamy, called for a "European growth budget," in an opinion piece published by centre-left French daily Le Monde.
Barroso re-packaged existing proposals to leverage public and private investment especially in energy, transport and digital infrastructures.
He also emphasised a call for changes to labour taxation, arguing that tens of millions of jobs could be created in the green economy, health services and IT or digital sectors.© ANP/AFP