* Socialists leader says youth employment top of campaign pledges
* Schulz is one of top candidates to be next Commission president
* Continent has lost its way and must regain trust, Schulz says
By Luke Baker, Robin Emmott and John O'Donnell
BRUSSELS, Feb 20 European Parliament President Martin Schulz, a leading candidate to become the next president of the European Commission, laid out his campaign proposals on Thursday, saying it was essential to restore citizens' trust in the European Union.
Acknowledging that Europe had lost its way after four years of economic crisis, Schulz, the German leader of the centre-left Socialists and Democrats in the parliament, listed his campaign goals as tackling youth employment, investing in renewable energy and the digital economy, and strengthening education.
"To regain trust, to get people back on track in favour of the European Union, we must reform," he told Reuters in an interview as part of its Euro Zone Summit.
"Let's start with another way of thinking. Not, is there still a corner of Europe that we haven't yet interfered with, but instead, what can be done better?"
He said that if chosen to head the Commission, the executive body responsible for drafting laws affecting all 500 million EU citizens, his first question to civil servants would be: what are you doing that could be better done elsewhere?
The next European Commission president will be chosen following elections to the European Parliament on May 22-25.
In the most comprehensive poll yet conducted, released on Wednesday, the Socialists and Democrats were forecast to win the election, taking 221 seats in the 751-seat parliament, a 14 percent gain on their current standing.
That would put Schulz in a commanding position to become the next Commission president, although it is not an open-and-shut case. He would first have to be backed by a weighted majority of EU leaders and then secure a majority in parliament, which would mean gathering support from rival political groups.
CHANGE HOW BRUSSELS WORKS
Schulz, 58, a former mayor and bookshop owner from the far west of Germany, has frequently been critical of the current crop of EU leaders, arguing that they are taking decisions without sufficiently engaging with ordinary citizens.
One of his biggest frustrations is that not enough has been done to counter youth unemployment, with joblessness among young people now topping 50 percent in countries such as Greece.
Mentioning young people he had met across Europe, including a Spanish woman with degrees in architecture and psychology who had failed to get a job despite sending 300 applications, he said the continent could not go on without changing.
"Partially we have lost our orientation. Europe is not as clear as it was in previous times for citizens. The European Union was a promise for more welfare, for more social stability, for more peace," he said. "The promise has not been kept. We need to find the way back, how we keep what we promised."
Given the impact of the economic crisis over the past four years, most pollsters expect anti-EU or protest parties on the far-right and far-left to do well in the elections, perhaps securing as much as a quarter of the seats in parliament.
Schulz agreed that the extremes would do well, but said that did not mean a debate about the issues could not convince radicals that Europe could be the answer to their problems.
"Those who criticise the European Union are not eurosceptics, this is the biggest mistake," he said. "We must say to them: 'We understand you, you are right'."
The key, he said, was in taking concrete steps to foster job creation, including giving credits or cheaper financing to companies that hire workers, and investing in renewable energy and the digital economy, as well as long-term education.
Germany's shift from nuclear power to an increased reliance on wind and solar energy was a pointer for the future. If the world's third largest industrialized economy could move entirely to renewables, he said, it would serve as a model for others.
But he said it was also essential that responsibility was delegated away from Brussels and down to national, regional and local authorities, allowing the EU to focus on the big issues and not come across as an anonymous Big Brother.
He described Brussels as being in some people's minds an "arrogant power which rules over us but has nothing to do with our daily lives". Instead, people should know it is not true.
"And even if it is true, we are prepared to change it, he said. "Because the European Union does not exist for itself, it exists for the citizens of Europe." (Writing by Luke Baker; editing by Jeremy Gaunt)