Crisis-hit Europe seeks rebound with new economic strategy

The EU, shaken by Greece's fiscal crisis and struggling to get its new institutions into gear, regroups this week as leaders mull improved, coordinated economic governance.

Europe's post-recession economic woes, highlighted by the swelling deficits of Greece and others, will be the focus of a European Union summit on Thursday.

The meeting in Brussels is also notable for being convened by the EU's first permanent President, Herman Van Rompuy, who has kept a markedly low profile since assuming his unelected role in December.

He has chosen to invite the 27 leaders to the listed Bibliotheque Solvay, set in a small park, which the former Belgian Prime Minister hopes will afford some informal wood-panelled coziness.

The choice will also, unlike usual EU summits, keep prying media eyes away. Mr Van Rompuy will see it as his first real chance to stamp his imprimatur on the bloc and a test of the EU under its new reforming Lisbon Treaty, which created his post.

"He's concerned about the increasing chatter about the decline of Europe," one senior EU official said.

Such worries have been heightened recently by Europe's ineffectual performance at the international climate talks in Copenhagen and the perennial bickering and institutional navel-gazing.

The global economic crisis which has hit Greece, Spain and Portugal particularly hard, even sparking fears that they could default on debts, adds to the urgency to restore growth and economic cohesion in the bloc, particularly in the 16-nation eurozone. British Business Secretary Peter Mandelson attacked the EU on Sunday for failing to provide stronger international leadership on banking reform.

"European heads of government need to show more of a strategic lead to the EU as a whole," the former EU trade commissioner deplored.

Europe is seeking to do just that, by drawing up a new 'EU 2020' strategy for growth over the next 10 years, with research, new technologies and green transport to the fore.