Brussels, 28/06/2013 (Agence Europe) - Given their geographical spread, the 5.6 million young people currently unemployed in Europe are a problem for most EU member states, but the solution is, in the main, a matter for national authorities, explained the EU27 heads of state at their meeting in Brussels on Thursday 27 and Friday 28 June. The European Summit's conclusions document talks of a broad approach to tackling youth unemployment in the EU comprising a raft of initiatives, which all re-allocate a share of European funds to the member states, focussing spending already planned for 2014-2010 on the early part of this period. The cash to be provided in this way is estimated by the president of the European Council, Herman Van Rompuy, at around €8 billion. Belgian prime minister Elio Di Rupo said not everyone was happy with this. It is good, he said after the summit, but hardly the seventh wonder of the world.
The piece de resistance of this broad EU approach is the decision to focus €6 billion from the Youth Employment Initiative on 2014 and 2015, the first two years of the upcoming multiannual financial framework (MFF) rather than spreading the cash over the whole seven-year period (2014-2020). Some 17 member states, including Croatia, should be eligible for some of this funding, to be used to provide a Youth Guarantee in regions with youth unemployment levels of over 25%. This corresponds to trying to introduce the Finnish and Austrian systems in at least 32 eligible regions, systems that guarantee young people (those up to 25 years of age), in the first four months of joining the labour market, with a high-quality job offer, a training course, apprenticeship or a traineeship (work experience).
The idea of frontloading the Youth Employment Initiative to 2014 and 2015, set out in the summit's conclusions document, was added to the upcoming MFF as the heads of state were on their way to Brussels. After inter-institutional talks, agreement in principle was reached on Thursday 27 June on earmarking €2.543 billion in 2014 and 2015 for tackling youth unemployment by means of the Youth Guarantee. In reality, however, €2.143 billion will be spent on youth employment, the remainder going on research, the Erasmus programme and small businesses. This amount will be on top of the €3 billion earmarked from the European Social Fund (ESF) to make a total of €5.1 billion for youth employment in 2014 and 2015. The €3 billion from the ESF still needs to be negotiated and the talks with the European Parliament (EP) are in deadlock on this very issue and are not expected to resume until September
Although nearly all the Youth Employment Initiative cash will be used over two years, the agreement on the MFF notes the option of carrying forward and utilising unused commitment appropriations year on year, as Van Rompuy pointed out. He said after the first day of the summit that this flexibility meant that over and above the €6 billion earmarked in February, much more will be available for the Youth Employment Initiative. The Commission projections suggest at least €8 billion in total. The French president, Francois Hollande, said it had been decided in light of the agreement with the European Parliament that all additional room for manoeuvre in 2015 and 2016 will be used above all for tackling youth unemployment.
Youth unemployment currently stands at 23.5% in the EU27 and 24.4% in the eurozone. Like most of the EU27 social and economic indicators, these averages hide wide gaps between and in the member states. As a recent comparison by Eurostat demonstrates, the gap between regions can be as wide as 68.3%. Youth unemployment in the region of Oberbayern in Austria is 4.2 %, but it is more than 70% in the region of Dytiki Makedonia in Greece.
The EU funding of nearly €6 billion will not fully cover the introduction of the Youth Guarantee in each eligible region. The International Labour Organisation (ILO) warned in July 2012 that, in the eurozone alone, €21 billion will be needed for the Youth Guarantee. The Youth Employment Initiative will cover 17 member states in 2014 and 2015, seven of them in the eurozone. Three countries stand out because the entire country will be eligible as every region in these countries has youth unemployment (youth here meaning the under-25-year-olds) of above the eligibility threshold, namely Greece, where 62.5% of young people are unemployed, Spain (56.4%) and Portugal (42.5%). Italy comes fourth, with 40.5% of young people unemployed in three of the four Italian regions that are eligible. The Spanish prime minister, Mariano Rajoy, says that Spain will get €2 billion.
It was Italy, however, that recently gave a glimpse of how member states wish to get this initiative for youth employment up and running. The day before the European Council, the Italian Council of Ministers approved a package of measures amounting to €1.5 billion, one part of which will be from the European budget (amounting to €1 billion in 2014 and 2015), Prime Minister Enrico Letta pointed out. This will be used to subsidise youth employment (tax relief for businesses recruiting young people), the funding of apprenticeship schemes, measures in favour of entrepreneurship (from 8,000 to 10,000 young people) and qualified training courses (3,000 young people) in the sector of public administration, mainly in the south of the country where unemployment is highest.
Other states are already lined up at the European counter. In France, the European youth employment initiative will, François Hollande says, provide €600 million over the next two years, with 300,000 young people involved in the so-called Youth Guarantee procedure. The Polish prime minister, Donald Tusk, speaking on the sidelines of the Council, also pointed out that he has a plan for youth employment that amounts to nearly €500 million in 2014 and 2015, although he was unable to say what the European contribution will be. In this context, the European conference on youth employment, to be held in Berlin in a few days' time, “aims to identify exactly what must be presented to the European Commission after agreement with the parliaments so that, on 1 January, we are able to spend six billion”, said German Chancellor Angela Merkel.
In order to justify using the notion of “comprehensive approach” in the Council conclusions and to be able to claim to have released an additional €2 billion, the heads of state and government meeting in Brussels included a series of other measures and initiatives in favour of youth employment. Those measures thus complete the Youth Initiative and ensure that other European initiatives can be used to this end over the 2016-2020 period. A first step along these lines had already been taken at the meeting of European labour ministers in Luxembourg on Thursday 20 June when an agreement had been reached on the European Globalisation Adjustment Fund (EGF), providing that the EGF will not be solely intended for workers who have been dismissed but may also include a chapter on youth employment.
By the same token, the European Council conclusions now make it possible, in future, to use budgetary envelopes that have not been used from the structural funds, in order to re-programme them in favour of young people. The European Social Fund (ESF) will be on the front line, even if its budget for the years 2014-2020 does finally comprise less hard cash than what was to be found in the coffers of the previous multiannual financial framework (€67 billion compared to €75 billion).
Among the other measures, the Council has decided to “promote the mobility of young job seekers”, mainly by strengthening the “Your First EURES job” and “Erasmus +” programmes. These measures will “help bring down hurdles, giving a perspective to hundreds of thousands of young people”, Van Rompuy was pleased to say. The European Investment Bank (EIB) is also requested to take part in this effort in order to banish the spectre of a “lost generation”. “The EIB will contribute to the fight against youth unemployment through its 'Jobs for Youth' initiative and its 'Investment in Skills' programme, which should be implemented without delay”, the Council conclusions state. (JK with CG/MD/AN/FG/LC/transl.fl/jl).