There is no shortage of potential challenges dotting the way. Europe's famed social security model has come under scrutiny, with economists wondering how much longer pensions and handouts can be afforded in their present form without more people contributing to the pot.

Compounding the problem is worsening unemployment. In Spain, for example, the number of unemployed passed a record five million people late last year. A similar number of Europeans under the age of 25 cannot find work, a burning issue that will continue to dominate the region's political and social agenda, say experts.

"Unemployment is a major issue especially if economic growth will be slower. In that context, we risk to lose more jobs than in previous years," David Natali, scientific director of the European Social Observatory, told Xinhua.

In the midst of such socio-economic challenges, the EU also faces big tests of its foreign policy. Sweeping changes in the North African political landscape following "the Arab unrest" last year demanded a strong response from Europe, a natural ally and the most influential bloc in the region.

Despite a historic sense of weariness about the EU in this region and despite the tricky task of finding consensus among 27 members, most observers agree a fairly robust course of action was taken in North Africa and the Middle East.

But to maintain its influence in tough economic times, Europe will need to build more meaningful cooperation with emerging nations, including China, feel experts.

While it is clear that economic growth is Europe's best way of overcoming its challenges, be it the employment, poverty, security or the environment, the million dollar question remains -- how to spark this growth?

Speaking ahead of the European Council, European Commission President Jose Manuel Barroso mentioned youth unemployment, small and medium-sized enterprises and fiscal consolidation as his priorities.

No lasting recovery could be made without achieving sustainable public finances, he said before warning that countries which overdo austerity measures in key growth areas will pay a heavy price down the line.

"This is not a choice between fiscal consolidation and growth. We need both," Barroso said.

On Monday, markets and observers alike will be keen to find out if European leaders agree and how they will react. Anything less than a comprehensive solution is likely to disappoint. (Oussama Elbaroudi and Viviane de Laveleye in Brussels contributed to this report).