Head of the European Commission said Friday Europe must boost growth while implementing "smart" fiscal consolidation, create jobs for the young and support small businesses, in overcoming the debt crisis.

GROWTH

"This is not a choice between fiscal consolidation and growth. We need both," European Commission President Jose Manuel Barroso said in a statement on the Commission's website, pointing to "smart" fiscal consolidation as the right approach to achieving sustainable public finances.

"We cannot resort to fiscal stimulus to boost growth at the present time. That is why 'smart' fiscal consolidation is crucial in our crisis response: not an end in itself, but a means to achieve sustainable public finances," Barros said.

"Smart" fiscal consolidation refers to fiscal austerity measures which avoid spending cuts in keys areas such as education, innovation and research & development, said the president, who warned that "countries which cut in the very areas they need to nurture for future growth will pay a heavy price down the line."

"Growth is and has always been at the centre of the Commission's comprehensive response to the crisis. That is precisely what the structural reform agenda is about," he said.

But since structural reforms can take time to make their benefits felt, the Commission have also put forward many ideas to stimulate growth in the short term, for instance by using EU funding more effectively to ease the credit squeeze on small businesses, according to the statement.

Barroso said he would propose to European Union (EU) member states at the forthcoming summit convening European leaders in Brussels on Jan. 30 to "redeploy structural funds to boost growth and job creation even further."

YOUTH UNEMPLOYMENT

Youth unemployment is another issue high on the agenda for leaders at the EU summit. "We cannot accept that almost a quarter of Europe's young people are unemployed!" Barroso said in the statement.

The president said he would propose the creation of joint "action teams" with the Commission, EU member states and national social partners, to come up with targeted plans by April to help tackle youth unemployment.

Barroso also urged member states to "commit to a 'Youth on the Move' pact to ensure that all our young people are either in a job, in education or in training within four months of leaving school."

SUPPORT FOR SMES

European leaders are also expected to focus on how to help small and medium-sized enterprises (SMEs) to continue growing and creating jobs during the debt crisis.

"Small businesses are the backbone of the European economy - and they need our help. We must do more to help them through this crisis," Barroso said.

The Commission has "put proposals on the table to free up available funding, reduce the burden of red tape and address decisively the problem of late or non-payments of outstanding invoices, which are responsible for a quarter of all bankruptcies in Europe," said the statement.

"These must be agreed and implemented swiftly," the president added.