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Leaders urge new EU economic policy

Nine European leaders including David Cameron have called for a new drive to restore EU economies and get countries back on course for jobs and growth.

The initiative comes a week before an EU summit discussing tighter economic controls and eurozone sanctions to counter more financial crises.

A joint letter to European Commission President Jose Manuel Barroso and summit host, Herman Van Rompuy, President of the European Council, calls for "a new direction" for all 27 countries, replacing old policies "which reinforce economic decline".

Signed by the Prime Minister and his counterparts from the Netherlands, Sweden, Denmark, Finland, Estonia, Poland, Lithuania and Latvia, it says: "Each of us believes firmly that we can achieve strong and dynamic growth in Europe - that with common purpose and resolve we can overhaul our outdated growth model and tear down the barriers to future prosperity."

The letter says national authorities must rise to the challenge of stimulating long-term growth, with ambitious and far-reaching national programmes of reform. It goes on: "But it is vital too that we make full use of the instruments of the European Union to achieve competitiveness and growth. We need an EU budget which addresses the challenges of tomorrow and, at our meeting in Brussels (on May 24) we must begin to set a new direction for Europe."

The nine leaders said that without stronger ambition and fundamental reform - to unleash enterprise, open markets and promote innovation, including in green technologies - Europe faces a future of low productivity, high unemployment, lost investment and relative economic decline.

As well as new moves to put public finances on a sustainable footing, European action is needed to ensure long-term growth by completing the single market, opening up the EU to global trade, and reducing burdens on business.

Opening up the EU cross-border services sector alone could add 140 billion euro (£122 billion) to the European economy, the letter points out.

Driving innovation, supporting creativity, and boosting the venture capital market are also key - particularly breaking the current deadlock on an EU patent - to ensure that firms have access to affordable, continent-wide intellectual property protection.

The letter concludes: "Europe stands at a junction. Before us lie two very different paths - a path of least resistance, built on the policies of the past and reinforcing economic decline; and a new direction for Europe, leading to stronger growth and prosperity."

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