Brussels - EU leaders are set to tackle watered-down proposals to reform the euro single currency, with an ambitious plan for a eurozone budget wanted by French President Emmanuel Macron left on the sidelines.
The discussion falls on Friday, the second day of a two-day summit that was largely dominated by Italy's ire on migration, which overshadowed all other topics, including the eurozone and Brexit.
EU President Donald Tusk, who organises summits, invited non-euro members to the second day of the talks, in a show of support for smaller countries worried about Franco-German dominance.
The bloc's 27 leaders, meeting without Britain, will largely work off proposals set down with great pomp by France and Germany, known as the Meseberg Declaration after the site of a recent meeting between Chancellor Angela Merkel and President Emmanuel Macron.
Europe's twin engines of EU unity, France and Germany make up nearly half of the eurozone economy, and a compromise by them usually leads to a deal among the single currency's 19 member countries.
But smaller members, led by the Netherlands, have voiced their irritation at having the EU's future announced from on high by the bloc's biggest powers.
A senior EU official admitted that the reform list was less than hoped but that the situation "was not entirely hopeless".
The reforms discussed on Friday include overhauling the European Stability Mechanism (ESM), which oversees bailouts to troubled member states, such as Greece, into some sort of European Monetary Fund.
But Europeans are still at odds over the exact mission of this future body and nailing down the details has been delayed until December.
Leaders will also agree to keep talking about forging a European-wide deposit insurance scheme that has been bitterly opposed by Berlin for years in the belief that Germany would be on the hook to save fragile banks in countries such as Greece and Italy.
The repeated delays of EDIS, the acronym for the European Deposit Insurance Scheme, has become a source of derision to Brussels insiders.
- 'Too tenuous' -
Not addressed is the eurozone budget idea, for which the support was "too tenuous" for now.
National governments have for months been mulling a French proposal to create some sort of budget capacity for the single currency bloc which could be used in case of crises or economic shocks.
Even if modest, Macron sees a eurozone budget as a symbolic step towards a more centralised and mutually supportive Europe.
But austerity-loving hardliners, usually led by Germany, fear an unnecessary transfer union, with disciplined countries in the north propping up over-spenders to the south (think Greece or Italy).
In Meseberg, Merkel gave it her quiet backing and the EU commission has proposed a scaled down version -- building a budget of just 55 billion euros.
Germany is open to something modest and included in the overall EU budget, which would require the approval of all the EU's soon to be 27 member states, not just the countries using the single currency.
But the resistance by a group of smaller countries, spearheaded by the Netherlands, has been fierce and just hours ahead of the summit, the eurozone budget was not mentioned explicitly in a draft of summit conclusions seen by AFP.
By Alex Pigman