EU targets unemployment amid crisis

European leaders are proposing new measures to combat soaring youth unemployment as the scramble to halt the continent’s debt crisis continues despite agreement over financial safeguards.

Jose Manuel Barroso, president of the European Commission, said up to €82 billion of EU funds could targeted at boosting small business and creating jobs to halt the swelling army of young unemployed. It includes €22 billion of unallocated funds from the European Social Fund, which he said could be used to “improve job opportunities for young people.”

Eurozone debt crisis in-depth

The measures were announced alongside an agreement by the EU leaders to implement a €500 billion permanent bail-out fund, the European Stability Mechanism, by July, and sign up to a fiscal deal designed to prevent governments from overspending.

Barroso Tuesday sent letters to the leaders of countries with high unemployment levels – Greece, Ireland, Italy, Latvia, Lithuania, Portugal, Slovakia and Spain – detailing the commission’s road-map for combating the problem.

But James Nixon, chief European economist at Societe Generale in London, said the funds would likely be too “thinly spread” to solve problems in countries such as Spain, which was facing a “long and protracted” recession this year.

Spain has the highest levels of youth unemployment in the European Union, with almost half its under-25s out of work, followed closely by Greece. The other targeted countries have about 30% unemployed in that age bracket.

Such figures are “unacceptable and a terrible indictment of our performance,” Barroso told the council.

The euro’s rise and fall

Data published Tuesday by European Union statisticians put unemployment across the 17 eurozone countries at 10.4% for December 2011, a year-on-year increase of 0.4%.

Across the wider European Union the unemployment rate was 9.9%, from 9.5% in December 2010.

The plan to target unemployment is part of a bigger drive to bring the eurozone’s almost two-year old debt crisis under control that scored a major victory on Monday with the signing of a new “fiscal compact.”

However, the deal – which was not approved by Britain or the Czech Republic – did not propose any new measures aimed at resolving the situation in Greece, the nation at the center of Europe’s debt crisis.

Greece and its private sector creditors have yet to agree on a plan to write down the nation’s debt by 50% – a measure austerity-hit Athens needs to secure additional bailout funds and avoid default on bonds due in March.

CNNMoney’s Ben Rooney contributed to this report