Spain to push for binding EU economic goals

"It is absolutely necessary for the 2020 Economic Strategy ... to take on a new nature, a binding nature," said Mr Zapatero.

The Spanish leader suggested potential penalties for member states that fail to reach agreed economic targets could include cutbacks in payments from the EU budget.

"This is something we are going to put on the table. But I cannot preempt the outcome of the debate," said the Socialist prime minister, whose country is the first to hold the EU's six-month rotating presidency under the bloc's new Lisbon Treaty rules.

The calls for greater and more co-ordinated European efforts to tackle the ailing economy stand next to Spain's domestic situation, where years of rapid expansion ended abruptly with the onset of the financial crisis and the implosion of the country's property bubble.

While remaining vague on many of the details, Mr Zapatero said a common energy policy and a common digital economy were examples of the priorities that should be included in the EU growth strategy.

"Our main aim is to introduce a qualitative leap in our economic union by means of new common policies," he said, pointing to the need for a greater role to be played by the commission.

"The Lisbon Treaty allows for more co-ordination, and for that to be truly effective, we need to equip the European Commission with new powers," said the Spanish leader, pointing to the absence of strong enforcement for the failure of the bloc's current economic plan, due to expire this year.

Outlook 'not bright,' says Van Rompuy

EU leaders are set to discuss the bloc's economic situation and the 2020 Strategy at an informal summit on 11 February, convened by the bloc's new permanent president, Herman Van Rompuy.

Speaking on Thursday at a Christian Social Union party conference in Wildbad Kreuth, Germany, Mr Van Rompuy said the bloc's "long-term outlook is not bright," citing severe industrial decay in the wake of the deepest European recession since the Great Depression.

The former prime minister of Belgium said the lingering effects of the crisis may include a drop in investment on a "permanent basis" and higher "structural" unemployment, adding that western Europe risked losing its industrial base.

"Germany is the exception, but the Benelux countries, Italy and the UK are de-industrialising rapidly," he told attendees.

Mixed economic data would tend to support Mr Van Rompuy's pessimistic statements, with positive data this week on EU business confidence in December tempered by poor retail figures for November in the eurozone.