The European Commission's new strategy for growth and jobs is on the ropes after EU leaders failed to agree hard targets on education and poverty, two of the five headline goals set out in the original proposal, Euractiv reports.
Governments questioned the EU's legal right to set targets on education and poverty and could only agree broadly on the importance of improving education and tackling social exclusion.
Debate on how to measure progress in these areas rumbles on, with quantifiable targets not now expected until June.
In the meantime, an explicit reference to cutting poverty by 25% has been dropped, as have targets on reducing the numbers of early school leavers and increasing participation in tertiary education.
The attack on the headline targets is a severe blow for the European Commission, which is keen to see national governments embrace the so-called 'Europe 2020' strategy to ensure its implementation.
However, the Commission can take solace in the fact that its proposal that 3% of GDP should be spent on research and development has survived.
Leaders backed the target, which came under fire from finance ministers last week, although the Commission had already conceded that it will try to develop a more sophisticated indicator for tracking innovation.
Ahead of the European Council meeting this week, Germany sought to torpedo discussion on education targets on the grounds that its federal competences would be infringed.
Several member states attempted to remove poverty from the 2020 strategy altogether, arguing that it is beyond the EU's competence and too difficult to measure. It was also suggested that creating jobs is the primary tool for tackling social exclusion, making explicit references to poverty unnecessary.
French President Nicolas Sarkozy said he and German Chancellor Angela Merkel would propose new wording on social exclusion in the coming weeks.
Commission President Jose Manuel Barroso stoutly defended Brussels's legal right to include poverty targets, insisting that the Lisbon Treaty explicitly allows the EU to support member states' efforts on social exclusion.
He acknowledged that further work would be needed on the "appropriate indicators" to measure poverty reduction and that this could be done in time for the June European Council summit.
European Council President Herman Van Rompuy said fighting poverty is included in the 'Europe 2020' strategy because it is central to the European social and economic model.
However, he too admitted there had been frank exchanges on the practical issue of how poverty should be defined and "conceptual problems" on whether the employment targets, if achieved, will reduce poverty effectively.