* Merkel holds summit with euro zone jobless at record high
* Coincides with Portugal crisis over measures she
* Leaders including Portuguese PM discuss youth unemployment
By Michelle Martin and Stephen Brown
BERLIN, July 3 European leaders promised on
Wednesday to step up the fight against soaring youth
unemployment, but offered no new solutions or money at a meeting
critics derided as a "show summit" to soften Angela Merkel's
image ahead of a German election.
The chancellor, whose insistence on spending cuts in return
for aid during the euro crisis has made her a target of anger in
recession-hit southern Europe, hosted about 20 of her EU
counterparts a week after the bloc agreed to spend 6 billion
euros over the next two years to combat youth joblessness.
A few hundred people protested in front of the Chancellery
in central Berlin, waving banners with slogans like "Europe's
Youth Needs More Than Merkel's Hot Air".
The stated aim of the meeting was to discuss how best to use
European Union funds once they become available in January.
At a news conference that featured statements from more than
a half dozen senior EU figures, including French President
Francois Hollande, Merkel stressed the need for more efficient
labour rules and better education and training opportunities.
But the leaders were short on specifics, agreeing to meet
again in November to evaluate progress.
"We want to put ourselves under a bit of pressure because we
know we've raised certain expectations with today's conference,"
Merkel said. "It is very clear that we can't solve the problem
overnight but we must make progress by the next time we meet."
The meeting took place against the backdrop of a political
crisis in Portugal, brought on by a row over the austerity
policies advocated by its European partners, the European
Central Bank and International Monetary Fund.
Portuguese Prime Minister Pedro Passos Coelho, who attended
the meeting in Berlin, told reporters he had no plans to resign
despite the departure of several top ministers in recent days.
"I believe truly that people in my country are more
frightened of the possibility of having a general election than
maintaining the course of our reform programme," he said.
Portuguese unemployment is at a record 17.7 percent and 42
percent of young people are out of work. In Greece and Spain
youth jobless rates are close to 60 percent and across Europe an
estimated 5.6 million under-25s are unable to find work,
fuelling fears of a "lost generation".
"I don't think we've ever had a challenge like this in the
history of European integration," Martin Schulz, the German
president of the European Parliament, told reporters.
He warned of a "systemic failure" if a whole generation of
Europeans are excluded from the workforce and society.
Rosa Donoso, a 31-year-old Spaniard looking for work in
Germany, said as she protested outside the Chancellery: "I don't
trust our politicians. They're just talking, it's all 'blah blah
Sigmar Gabriel, the leader of Germany's opposition Social
Democrats (SPD), joined the demonstrators and denounced Merkel's
summit as a "farce". "This is just electioneering," he said.
According to the latest opinion polls, Merkel holds a lead
over the SPD of more than 15 percentage points with less than
three months to go before the Sept. 22 vote.
But her entourage is worried she could be blamed if the
economic situation in southern Europe gets worse and social
unrest breaks out. Several months ago, she began shifting her
rhetoric, emphasising growth and jobs and playing down the need
for more deficit reduction.
Carsten Nickel, an analyst Teneo Intelligence, said the
meeting allowed Merkel to present herself as a "benevolent
European leader to her domestic audience".