The EU's 27 member states also agreed on Thursday to promote lending to struggling small businesses in crisis-hit Southern Europe, where youth unemployment has risen well above 50 percent in Greece and Spain.

European Council President Hermann Van Rompuy said that the 6 billion euros, which will directly target youth unemployment, could rise to 8 billion by scavenging other budget areas for spare money. Across the EU, some 5.6 million people under 25 are without jobs.

Watch video 01:27 Share EU summit kicks off on a good note Send Facebook google+ Whatsapp Tumblr linkedin stumble Digg reddit Newsvine Permalink https://p.dw.com/p/18xik Surprise harmony at EU summit

"In some parts of Europe, we have a social emergency," European Commission President Jose Manuel Barroso told a press conference after the EU summit on Thursday.

But Martin Schulz, the center-left president of the European Parliament, said that the funds allocated for combating youth unemployment were not enough.

"We spent 700 billion euros on the bank rescue system and now, after much hesitation, 6 billion to fight youth unemployment," Schulz said.

"These 6 billion euros, we should be clear about it, are a drop in the bucket," he said.

EU budget set through 2020

The discussion of how to tackle youth unemployment came after the EU member states managed to seal a budget agreement on Thursday. Brussels is set to have 960 billion euros ($1.25 trillion) to spend through 2020 on everything from agriculture to research, roads, bridges and development aid.

Negotiations hit an initial snare, with Great Britain insisting on keeping its rebate from the Common Agricultural Policy (CAP), which subsidizes farmers. London had demanded back in February that the EU cut spending like many of its member states, resulting Brussels' first ever budget reduction.

The European Parliament still has to approve the member states' budget agreement. It will be the first time that the bloc's legislature has voted on a budget, after a treaty change in 2007 gave it more authority over fiscal policy.

"I am going to have to fight for a majority in the European Parliament, that's for sure," Schulz said.

On Wednesday, EU leaders also came to an agreement on common rules to shield taxpayers from bailing out banks. According to the agreement, shareholders and creditors will first have to take losses, followed by depositors with savings of more than 100,000 euros. The state would step in with taxpayer money only as a last resort.

"The last 24 hours have been a great success," European Commission President Barroso said. "Today, we have agreed the money to back up our words."

slk/ipj (AFP, dpa, Reuters)