Brussels, 04/04/2013 (Agence Europe) - On Thursday 4 April, the International Labour Organization (ILO) said that it is prepared to assist the European Commission in supporting member states in the implementation of their “youth guarantee” mechanisms. Although the ILO sees this as a way of reducing youth unemployment, which stood at 23.5% in the EU and 23.9% in the eurozone in February, it underlines at the same time that proof of their effectiveness is “rather limited”, while the costs are expected to be around 0.5% and 1.5% of national GDP.
In principle, all member states agree on setting up such a mechanism, in light of the EU Council of Ministers' conclusions at the end of February (see EUROPE 10796). The objective is two-fold: ensuring the smooth transition of young people from education to the world of work and preventing long-term unemployment. The ILO, however, is highlighting another substantial programme. There is not enough evidence that such a solution works, especially in the current circumstances, characterised by recession and budgetary austerity measures.
The examples are therefore rather sparse and disparate with regard to the application of this mechanism. Obviously, there are a number of commonalities; three to be exact: measures that target education and training; employment programmes and services; and other proactive labour market policies. Nonetheless, the way in which these three points are organised varies considerably from one state to the next and the “guarantee” is being particularly pushed in Denmark, Finland, Norway and Sweden and partially in Germany, Austria, the Netherlands and Poland. The duration of the guarantee and the category of people that have access to it also vary considerably in the different member states.
The ILO is therefore adopting a cautious approach towards it. The guarantee mechanisms are necessary because they help to stabilise crisis situations, which the majority of European leaders currently describe as “social crises” or “the lost generation”. Nevertheless, faced with the absence of tangible proof of the effectiveness of the “youth guarantee”, the ILO is only describing it as a potentially beneficial measure. Azita Berar Awad, the director of the ILO's employment policies department therefore emphasised that, “the ILO's review of existing youth guarantees shows the potential of these schemes to bridge the gap, until economic growth strengthens and the labour market recovers”.
In conclusion, it appears that according to an analysis published by the ILO on Thursday 4 April, the “guarantee” could prove effective in achieving the first objective of ensuring a smooth transition of young people to the labour market but without necessarily guaranteeing employment stability in the short or medium term. The second challenge is related to the cost of these mechanisms, which the ILO has calculated at €21 billion for eurozone countries alone. Community funding of €6 billion for regions where unemployment rates are above 25% is planned, as is specific funding from the European Social Fund; but is this sufficient? The ILO is not prepared to give an answer to this question yet and would only emphasise that a certain amount of budgetary flexibility will be necessary. (JK/transl.fl)