European Union leaders are examining a deal to promote growth and jobs aimed at countering record unemployment and an economic downturn - a pact pushed by French President Francois Hollande to offset German-led austerity.
The summit began on Thursday with the EU parliament president taking part in a debate on the next budget for the period between 2014-2020.
A group of pro-austerity governments led by Germany and Britain are fighting the EU parliament's demand for an increase in the 27-nation bloc's spending.
The leaders of Germany, France, Italy and Spain have put forward a plan to inject up to 130 billion euros ($170 billion) into the eurozone economy, around one per cent of European GDP.
The pact includes a proposal to raise the capital base of the European Investment Bank by 10 billion euros ($12.4bn) in order to boost its financing capability, and another to issue joint "project bonds" to fund infrastructure projects.
Later on Thursday, during dinner, the heads of state and government will tackle grand plans to tighten the economic and monetary union, a sealing of bonds seen as crucial by markets nervous about the eurozone's future.
EU president Herman Van Rompuy will present a report drafted with the heads of the European Central Bank, European Commission and Eurogroup, to create a banking union and increasingly centralise control over budgets.
The talks are tipped to run late into the night, but the summit is only expected to agree on a roadmap to be finalised at another summit at the end of the year.
German lawmakers are expected to approve two key tools for battling Europe's debt crisis on Friday after weeks of wrangling to ensure Chancellor Angela Merkel secures broad backing for the measures.
Under pressure from EU leaders to deliver solutions at a summit that starts on Thursday, Merkel is scheduled to dash back from Brussels to address German MPs before they vote on the fiscal pact and permanent bailout fund.
Her speech to the Bundestag lower house of parliament, which is to begin sitting from 1500 GMT, will be followed by the 620 members voting on the pact which commits Germany and its partners to more budgetary discipline.
Al Jazeera's Nick Spicer, reporting from Brussels, said that the divide between Merkel and other EU leaders was, in some part, aimed at appeasing their own national audiences.
"It is a requirement for Merkel and [Italian Prime Minister Mario] Monti to show their domestic electorates that there is a disagreement here," he said.
"One reason why Angela Merkel needs to leave to Berlin tomorrow to get a three-fifths majority in the Bundestag, is that she needs to prove to the parliamentarians that she has fought her corner.
"Monti, equally, needs to prove that he has fought his corner in Brussels, if he is to continue getting support for painful reforms that he is bringing about. So we do need to take with a small grain of salt what the European leaders are saying here in Brussels, but that is not at all to minimise the challenges that they face."
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German lawmakers will also be asked to approve the creation of the 500 billion euro ($623bn) European Stability Mechanism (ESM), the permanent rescue fund which is, from next month, to take over from the European Financial Stability Fund (EFSF).
Merkel warned on Wednesday that there were no "quick" fixes to the crisis that has roiled the eurozone for more than two years and acknowledged that "yet again", much attention would be on Germany.
Later on Friday, members of the Bundesrat upper parliamentary chamber representing Germany's 16 regional states are to decide on the two key texts, squeezing in their votes before the summer break.
Weeks of negotiations with the main opposition parties have allowed Merkel to count on their support, and thus for Germany to send a strong pro-Europe message to its partners.
The fiscal pact, of which Merkel was the main architect, entails changes to the German constitution and thus requires approval by a two-thirds majority of lawmakers in both chambers.
Signed by 25 of the European Union's 27 member states, the fiscal pact aims to enforce stricter budgetary rules and prevent excessive public deficits that touched off the eurozone turmoil.
The pact would take effect once 12 EU countries have ratified it, but so far that has occurred in just a handful of nations.
To obtain backing in Germany, Merkel has had to accept demands by the main opposition Social Democratic Party and Greens for growth measures, and secure the support of leaders in German states.