European Union leaders head for their last summit of the political calendar this week as the EU's jobs crunch and a proposed template for the troubled finance industry weigh heavily on the mood.
Shaken by the 2008 debt and banking maelstrom, the EU is no longer in fireman mode about preserving the euro or rushing to save Greece and other basket cases.
But the summit in Brussels tomorrow and Saturday highlights a difficult next step as the 27-nation bloc - due to be joined by Croatia on July 1 - seeks to build on the lull won by the European Central Bank's slashing of interest rates and last-resort defence of the banking system.
Leaders are being told to craft credible plans for rolling back youth unemployment, a problem that seems so intractable that many are warning of a wasted generation and of the dangerous allure of demagoguery.
According to the EU's official statistics agency Eurostat, 7.5 million young Europeans between 15 and 24 were either unemployed, not in education or in training in April, making an overall youth jobless rate of 23 per cent.
The highest figures are in Greece, with more than 60 per cent, followed by 56 per cent in Spain, 40.7 per cent in Portugal and 39.2 per cent in Italy. In these countries, joblessness is causing a damaging demographic effect as young people head abroad to search for work.
"The loss of human capital related to unemployment poses a threat to growth potential and, with the rise of populism, raises questions about the sustainability of our social model and the stability of our democratic systems," Italian Prime Minister Enrico Letta warned in the Financial Times.
Among the proposals put forward in Brussels are a possible "Youth Guarantee", earmarking €6 billion ($10.1 billion) in EU funds for a six-year programme to provide a job, training or apprenticeship to individuals within four months of their leaving school or full-time education or becoming unemployed.
"As the organisation held responsible for imposing austerity which has bitten deeply into already weakened national economies, the European Council is looking to reassure that it has a role in supporting and reviving these ailing economies," Jocelyn Evans, a professor of French politics, told the Herald. "However, it is difficult to see what compromise position would enable real progress on job creation."
Another issue will be to kick-start an EU-wide "banking union" which would create a common set of rules aimed at preventing failing banks from repeating the mayhem that erupted in 2008 and reverberates today.
But a breakthrough seems unlikely, partly because of reluctance in Germany. Earlier this month, the vice-president of Germany's Bundesbank called for a Europe-wide bank resolution authority that would wind up failed banks. The idea could be a vital link in ending the debt crisis, but is opposed by the Government, which faces general elections on September 22 and is unwilling to be seen as surrendering more national sovereignty to Brussels
"This is the peculiar side of the story - the most influential EU country will probably not do a lot in terms of more flexible EU policies because some national parties do not want to upset their domestic electorate," said Andrea Mammone, a European expert at Royal Holloway College, part of the University of London.
Both issues touch on the credibility of European institutions, which are increasingly perceived as aloof, bureaucratic and keen to meddle in national affairs.
Before, such criticism was typically heard only on the euro-skeptic fringe, but in the past week alone it has been heard at top level in the Netherlands and France, both EU founder countries and drivers of the once-sacrosanct principle of "ever-closer union".
Further complicating the summit is the bad blood over problems on Europe's periphery. Members differ over arming rebels in Syria, while Germany and Austria are leading the charge to brake Turkey's bid to join the EU because of its crackdown on anti-government protests.
Squabbles over foreign policy are not new to the EU, but it is rare for them to escalate to such a level. The last time this happened was in 2003, when Germany and France split with Britain and other close US allies over the Iraq War.