EU summit opens amid austerity protest

European Union leaders opened a summit on Thursday targeted by thousands of anti-austerity protesters, talking about how to loosen government spending to bring down record unemployment, especially among youths.

The two-day talks which started at around 1630 GMT will feature a gathering of eurozone-only leaders overnight and eurozone finance ministers later on Friday, tackling a multi-billion-euro bailout for Cyprus -- the fifth for an EU state since Greece first needed rescuing three years ago.

Heads of state and government were also looking at relations with key partners, notably Russia, while France and Britain may raise the issue of a Syrian arms embargo they want lifted to help insurgents fighting the regime of President Bashar al-Assad.

As trade union organisers said 15,000 demonstrators were gathered outside, austerity hardliner German Chancellor Angela Merkel said it was necessary young people in Europe are able to find jobs.

But French President Francois Hollande, whose pro-growth push over recent months has gained added weight thanks to a big anti-austerity vote in Italian elections last month, said the "only priority" leaders had to face today was finding fresh ways to boost growth.

Fellow Socialist leader and Belgian Prime Minister Elio Di Rupo said that "with 26 million unemployed, it is only natural that we ask the EU to develop policies which tend towards more growth."

Former eurozone head and Luxembourg Prime Minister Jean-Claude Juncker said the task now was "to explain our policies better."

"I can't rule out us running the risk of a social revolution or rebellion," he warned.

The 17 eurozone leaders were due to stage their own discussions later Thursday evening, with hopes rising in Cyprus that a deal on its long-delayed financial rescue could be sealed come finance ministerial talks on Friday.

International Monetary Fund managing director Christine Lagarde was due to join that meeting.

"I do hope that by tomorrow we can negotiate and find a solution," said new Cyprus President Nicos Anastasiades.