Europe’s finances remain in a fragile state, but after three summits dominated by the Greek debt crisis, there was a lighter mood around the table early on. A point not lost on the Council president Herman Van Rompuy, who said:

“It will be the first normal Council since my entry into office; there is no crisis, we are now at 10.30, and there is no crisis.”

The European Council has finalised the European Union's new strategy for jobs and smart, sustainable and inclusive growth. The strategy will help Europe recover from the crisis and come out stronger, both internally and at the international level, by boosting competitiveness, productivity, growth potential, social cohesion and economic convergence. The new strategy responds to the challenge of reorienting policies away from crisis management towards the introduction of medium- to longer-term reforms that promote growth and employment and ensure the sustainability of public finances, inter alia through the reform of pension systems.

Making his EU summit debut was the new British Prime Minister, who had early talks with the European Commission President José Manuel Barroso, David Cameron said:

“We do have a very strong and positive agenda, an agenda about dealing with deficits as we are doing in our own country, and we’ll be taking further action next week in our budget, and a very positive agenda in terms of Europe on the world stage, in terms of making sure we have a strong package of sanctions against Iran, something that is going to be dealt with today and we believe is incredibly important.”

The President of the European Parliament Jerzey Buzek told EU leaders gathered for their traditional June summit in Brussels that they should give a signal to the international markets that the EU and its currency means business and that Europe is committed towards reforms and further growth.

“If no concrete actions follow, the markets and the public will no longer believe in Europe and the crisis of confidence will continue. Our economic governance is about credibility, but it is also about accountability. Let us recall once again that solidarity must be accompanied by responsibility,” he said.

Supporting enhanced economic governance proposals, particularly among the euro area member states, Mr Buzek said that EU governments must do the necessary reforms, even if they are painful.

He said that in the future there has to be stronger links between the instruments of the Stability and Growth Pact, macroeconomic instruments and the “Europe 2020” Strategy. In this context he said that the European Parliament fully supports the proposed peer review of national budgets.

“When undertaking reforms we have to be completely open with our citizens.

“We must tell them the truth that the credit card culture of living on borrowed money must end. We have to pay the bill; otherwise we will be stealing the inheritance of our children, and probably their children as well. We have to tell our citizens that we will have to work longer hours, retire later, and live within our means,” he said in clear terms.

French President Nicolas Sarkozy says European Union leaders will call for a global tax on financial transactions.

He said the 27 leaders want the United States and others to back a tax at a Group of 20 Summit of rich and emerging nations in Toronto next week - despite opposition from some nations.

However, it is unclear how exactly a global tax would work.

In addition, the EU leaders adopted a new set of sanctions against Iran in a further effort to stall its disputed nuclear program.

In a statement, the leaders expressed regret "that Iran has not taken the many opportunities which have been offered to it to remove the concerns of the international community over the nature of the Iranian nuclear programme".

The additional restrictions will target Iran's oil industry, shipping and air cargo companies, and dual-use products that could be utilised as part of the nuclear program. More sanctions will also be imposed on trade insurance and financial transactions.

British Prime Minister David Cameron said that Europe needs to play a full role in international efforts.

This means ‘making sure that we have a strong package of sanctions against Iran’, 'We believe it is incredibly important.'

The new EU measures will strengthen those adopted last week by the UN Security Council, after Iran rebuffed a plan to suspend uranium enrichment and swap its stockpiles of low-enriched uranium for fuel rods.

The UN is seeking to disrupt the money flow to Iran's Revolutionary Guard. It calls for an asset freeze on 40 additional companies and organizations involved in nuclear or ballistic missile.Western powers suspect Iran is seeking nuclear weapons - which Tehran denies.

On Wednesday, the US announced its own fresh sanctions, implementing the UN measures approved last week.

Russia’s Foreign Ministry said it’s deceived by EU’s unilateral sanctions against Iran.

"We are extremely disappointed that neither the United States nor the European Union is heeding our calls to refrain from such steps," Russian news agencies quoted Deputy Foreign Minister Sergei Ryabkov as saying.

Iranian President Mahmoud Ahmadinejad dismissed the vote as "a used handkerchief" fit for the dustbin.

Tehran has rejected calls by the Security Council to halt uranium enrichment - which could have military as well as civilian uses.

Iran insists its nuclear programme is solely designed to produce energy. Iran says it seeks to develop fuel only for its energy and research reactors, and that it has the right to enrich uranium under the international nonproliferation treaty.