The European leaders who convened at the Élysée Palace for a summit on youth employment yesterday expressed confidence Europe’s high youth unemployment rate, which stands at an average 23.5 per cent, will improve over the next two years. By comparison, 16 per cent of youths in the US are unemployed.
“We must act quickly because it is urgent – we cannot abandon a generation,” President François Hollande said at the closing news conference. More than 5.5 million youths under 25 in the EU are unemployed.
Mr Hollande said countries that submitted action plans by end of the year may begin drawing from the €6 billion Youth Employment Initiative on January 1st. Each country will spend the funds as it sees fit.
Ireland has sought advice from the Organisation for Economic Co-operation and Development in drawing up its plan. France was the first to begin a test programme, through which it pays an allowance to young people who engage in job training.
Youth unemployment varies greatly within the union, from 57.3 per cent in Greece and 56.5 per cent in Spain to 7.7 per cent in Germany. In France it is 26.1 per cent and 28 per cent in Ireland.
Yesterday’s was the second EU summit on youth employment in four months. At the previous summit in Berlin, leaders reaffirmed their commitment to devote at least €6 billion over the next two years to create a “youth job guarantee” that will ensure that no one under 25 spends more than four months without work or training. The next summit on youth employment will take place in Rome.
European leaders have discussed the youth guarantee at every summit for the past year and a half, but the programme is still not operational. Taoiseach Enda Kenny said yesterday’s summit was different because “there was a real focus on having the money available and having every country have its programme ready by the end of the year, and to start this effectively. For the first time, there was a real impetus because people are being challenged about the scale of youth unemployment.”
An undercurrent of tension between opposing German and French visions of the problem is palpable each time the subject of youth unemployment is broached.
German chancellor Angela Merkel says unemployment must be tackled through structural reforms to the labour market, namely lower salaries and less regulation. France has consistently argued against austerity. Government-subsidised jobs have been Paris’s main strategy in addressing youth unemployment.
EU figures to be released today are expected to criticise Germany for maintaining such a high current account surplus, yet many of Germany’s European partners, including Ireland, look poised to follow the German model which combines education with apprenticeships.
In addition to the €6 billion alloted for the youth guarantee in the new EU budget, the European Investment Bank intends to finance businesses that hire young people to the tune of €6 billion annually. The European Social Fund will devote up to 70 per cent of its €10 billion annual budget to youth employment, bringing the total available to €40-45 billion over the next three years.
Substantial as that sounds, it is dwarfed by the more than €150 billion which youth unemployment is estimated to cost the EU annually.
