The 27 leaders resolved to spend 6 billion euros over the next two years to support job creation, training and apprenticeships for young people, and to raid unspent EU budget funds to keep the effort going thereafter.
Germany’s Chancellor Angela Merkel said the key was improving competitiveness and not creating new pots of money.
But one senior EU official described the sum as “a drop in the ocean” with more than 19 million people unemployed in the EU, and more than half of all young people under 25 without a job in Spain and Greece.
EU leaders are holding a second day of summit talks in Brussels on Friday.
Austria’s Chancellor Werner Faymann described the 6bn-euro jobs initiative as “a first step”.
Leaders also approved plans for the European Investment Bank to lend hundreds of billions of euros to small and medium-sized enterprises (SMEs) particularly in southern EU states where bank finance has largely dried up due to the euro zone’s debt crisis.
“The last 24 hours have been a great success,” European Commission President Jose Manuel Barroso told a news conference. “Today we have agreed the money to back up our words.”