EU leaders trying to shift focus from deficits to jobs

The meeting is due to start at 3pm on Monday, provided all 27 leaders make it into town using the military airport as the main international one will be closed during the strike. "On the logistics side, we were given assurances that everything will be alright," the official said.

A draft statement on "growth-friendly consolidation and job-friendly growth", seen by EUobserver, is set to be endorsed by leaders. It is their response to the growing unease across Europe that austerity measures alone are deepening recession and contributing to more job losses.

"Decisions have been taken to ensure financial stability and fiscal consolidation - this is a necessary condition for a return to higher structural growth and employment. But it is not in itself sufficient: we have to modernise our economies and strengthen our competitiveness to secure a sustainable growth. This is essential to create jobs and preserve our social models," the text reads.

In order to stimulate employment, particularly for young people, member states should "reform their labour markets" and "address the cost of labour in relation to productivity" - another way of saying wage cuts and making it easier for employers to hire and fire people.

"Each member state will set out in its National Reform Programme the concrete measures it will take to address these issues ("National Job Plans"); implementation will be subject to enhanced monitoring," the draft says.

Cutting labour taxes and promoting youth employment are also mentioned. Unspent EU funds in member states with the highest youth unemployment (Spain, Greece) are to be re-directed "towards support for young people to get into work or training."

EU rules on mutual recognition of professional qualifications should be revised, as well as the European professional card and the European Skills passport. "Progress on the portability of pension rights" is another point EU leaders flag up.

Measures aimed at smoothing out disparities in the single market are another focus area: standardisation, energy efficiency and simplification of accounting requirements should be accomplished by end of June 2012. Public procurement rules should be simplified by the end of the year. An agreement on online dispute resolution and on roaming should be reached by June 2012 and the issue of where to locate the court dealing with EU patents should be resolved as soon as possible.

As for Europe's 23 million small and medium enterprises, a further list of good intentions is spelled out including redeploying unused EU money to enhance the European Investment Bank's lending capacity to these companies.

Polish issue

Meanwhile, the main outstanding issue concerning the new treaty on fiscal discipline is Poland's insistence that non-euro leaders signing up to the pact be allowed to participate in eurozone summits, meant to take place "at least twice a year."

In the current version of the draft treaty, non-euro leaders are invited to these meetings only when they concern "the implementation of this treaty" and "at least once a year." Warsaw has said this is not enough of a concession.

National 'sherpas' - diplomats negotiating the draft treaty - are set to meet again on Friday afternoon to iron out the issue.

A possible compromise is to change the wording so that non-euro leaders are invited "to all" meetings as long as they concern the implementation of the treaty.

Greece

Another issue forming the backdrop to Monday's meeting is Greece, which is still struggling to ink an agreement with private lenders on a 'voluntary' debt restructuring deal of at least 50 percent.

This is a pre-condition for a second Greek bail-out agreed by EU leaders last October. Athens badly needs the money to refinance its debt in March.

At stake is whether the European Central Bank - which also holds billions in Greek bonds - should take a loss like private lenders or if donor eurozone states should step up their contributions.

Germany is opposed and insists on sticking to the terms of the October deal. But EU economic affairs commissioner Olli Rehn, speaking in Davos on Thursday, suggested that this may be the case: "I don't rule out a small adjustment of lending needs of the euro-area member states."

His remarks came one day after IMF chief Christine Lagarde said that Greece's public-sector creditors "will have to step in, too" if the private-sector deal did not result in a sufficient reduction in Greece's debt.

EU diplomats on Thursday did not rule out that the 17 eurozone leaders may break off on Monday for informal talks on the issue.