European leaders are loosening the shackles on national budgets as the euro-area recession deepens and unemployment climbs, with pro-growth calls coming even from German Chancellor Angela Merkel, the leader most closely associated with austerity.

Merkel went into a European Union summit today urging a stepped-up fight against youth unemployment, now over 50 percent in Greece and Spain, and skipped the appeal to fiscal discipline that has been her standard message throughout the debt crisis.

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