For the heads of state and government the initial priorities were growth and employment. At their spring meeting they also signalled that their endeavours would be continuing – to consolidate national budgets, undertake structural reforms, enhance competitiveness and boost growth. On Thursday evening they unanimously adopted the Conclusions of the summit meeting.

Breathing life into the Compact for Growth

On her arrival in Brussels the Chancellor said, "We adopted a Compact for Growth last summer. Now we must breathe life into this Compact." The funding is available, she added. "We must get the cash to the people, so that young people in Europe can find jobs." But, "we must do everything we can to become competitive and grow," the Chancellor pointed out. She also made it quite clear that there is no inherent contradiction between fiscal consolidation and growth policies.

No decision before June

At the start of the European Council meeting, Angela Merkel met with the President of the European Parliament, Martin Schulz. Then the first working session was held.

The deliberations of the heads of state and government traditionally focus on financial and economic issues in spring.

The Council is looking at the proposals of the European Commission on a European semester, and will be taking stock thereof. Decisions will not be taken until the next Council meeting in June.

The European semester is a six-monthly cycle that kicks in at the  beginning of a calendar year within the framework of the Stability and Growth Pact. The European Commission issues an annual report on growth, in which it identifies the major challenges facing the European Union in terms of financial, economic and employment policy, and recommends measures to tackle these. On the basis of this report, the European Council draws up guidelines at its spring meeting to provide member states with an orientation for their budgetary policies.

The goal of the euro-zone group – improved competitiveness

After dinner, the 17 members of the euro zone met with the President of the European Commission, José Manuel Barroso, and the President of the European Central Bank, Mario Draghi, to discuss the current situation within the euro zone.

After the meeting, Angela Merkel stressed that the top priority now must be to make the euro-zone states more competitive. The low productivity levels in recent years are the cause of high unemployment in the states currently in difficulties.

"If we coordinate our economic polities better, we will be able to avoid this sort of imbalance in future and these divergent developments among euro-zone states," declared the Chancellor. "This was a very helpful constructive discussion which will, I am sure, help us move forward towards greater economic-policy coordination."

The heads of state and government also discussed the debt crisis in Cyprus. Today the ministers of finance will be looking at a package to help the Cypriot economy. It remains to be seen whether a package can be put together. There can be no doubt that swift consultations are desirable, said Angela Merkel. "But they will continue until we have a sensible solution. What we need is a sustainable solution."

Fighting youth unemployment a particular priority

An important issue is the widespread youth unemployment in Europe and thus the allocation of the six billion euros earmarked for the programme adopted at the last European Council meeting. The necessary legal foundations must be put in place so that the funding can be used swiftly. The Conclusions of the Council meeting thus underscore the fact that addressing youth unemployment is the most important social challenge facing the EU at present and that it is a particular priority.

Syria and relations with Russia on the agenda

French President François Hollande spoke out at the Council meeting for a lifting of the embargo on supplying weapons to oppositional forces in Syria. The United Kingdom too would like to see this. No decision was made by the European Council on this matter.

The number of civilian victims of the regime of President Bashar al-Assad has risen dramatically. In the words of the Chancellor the pros and cons of lifting the embargo must be weighed up very carefully. Care must be taken not to trigger an arms race, she warned.

In their foreign-policy consultations today the European Council will be looking at relations with strategic partners, as they did in October. This second day of the meeting is dedicated to relations between the European Union and Russia.