EU agrees EUR 120 bn 'growth pact'

(BRUSSELS) - European leaders on Thursday clinched a deal on a new "growth pact" of measures worth some 120 billion euros to breathe life into floundering economies, EU president Herman Van Rompuy said.

"What we already agreed is ... to boost the financing of the economy by around 120 billion euro for immediate growth measures," he told reporters on the first day of a two-day European Union summit.

The plan -- proposed by the eurozone's top four economies Germany, France, Italy and Spain -- foresees a package of measures to boost output and create jobs.

The pact would redirect unspent EU funds to the most needy countries and bolster the coffers of the European Investment Bank by boosting its capital base by 10 billion euros.

The EIB says the capital injection would allow it to raise funds in the markets to invest 60 billion euros in innovation, small- and medium-sized companies and infrastructure projects.

In addition, the investment bank will launch joint "project bonds" to finance 4.5 billion euros worth of infrastructure programmes.