* Merkel holds summit with euro zone jobless at record high
* Coincides with Portugal crisis over measures she championed
* Leaders including Portugese PM to study youth unemployment
Germany's Angela Merkel will discuss with EU leaders in Berlin on Wednesday how to tackle chronic youth unemployment at a summit critics say is a pre-election public relations exercise.
And now Portugal's political crisis, which threatens to upset its economic recovery from the euro zone debt crisis, has cast a shadow over the one-day meeting. Portuguese Prime Minister Pedro Passos Coelho is among those scheduled to attend.
Passos Coelho said late on Tuesday he would stay in power despite the resignations of his finance minister - architect of a programme of spending cuts and tax hikes sought by foreign lenders - and then of the foreign minister.
With unemployment at a record 17.7 percent and 42 percent of young people out of work, Portugal is one of the countries worst hit by the euro crisis, but Passos Coelho says he will stick to deficit goals agreed with lenders despite the resignations.
Unemployment in the euro zone as a whole stands at a record high of over 12 percent and there are fears of a "lost generation" in Portugal and other struggling countries such as Spain and Greece. Many blame Merkel.
"This economic crisis is turning into a political crisis which is threatening social stability in these countries and Germany cannot remain indifferent," said her main challenger in September's vote, the Social Democrats' (SPD) Peer Steinbrueck.
Merkel has spent most of the euro zone crisis insisting over-indebted states cut public spending. Now, just ahead of her re-election bid in September, she is trying to rebrand herself as saviour of Europe's jobless as well as its public finances.
Germany has emerged from the euro crisis largely unscathed with unemployment near post-reunification lows. The chancellor wants EU leaders to study best practice to create sustainable jobs, looking at the experience of states with low unemployment.
Leaders ranging from conservatives who see eye-to-eye with her - such as Spain's Mariano Rajoy and Greece's Antonis Samaras - to leftists with whom she often disagrees - including France's Francois Hollande and Italy's Enrico Letta - will attend.
With European Council chief Herman Van Rompuy and European Commission President Jose Manuel Barroso, they will discuss how best to spend 6 billion euros ($7.82 billion) in the next two years to create jobs and provide training and apprenticeships.
"Youth unemployment is perhaps the most pressing European problem. We Germans have gathered plenty of experience through our own structural reforms since reunification and we want to share these experiences," Merkel said in an interview with a group of European newspapers on the eve of her summit.
But the timing of the meeting has raised eyebrows.
"A nice summit in Berlin with so many people coming - and with many of them probably applauding Germany for its readiness now to combat youth unemployment - is nice for Merkel, two and a half months before the election," said Berenberg Bank's chief economist Holger Schmieding.
The SPD, unions and groups of unemployed youngsters planned to protest outside Merkel's office ahead of the summit, which is scheduled to start at 2.15 p.m.