Madrid, 24/03/2014 (Agence Europe) - Tens of thousands of Spaniards converged on Madrid on Saturday 22 March, to express their “indignation” at the economic austerity policy carried out by their Conservative government. A few days after this demonstration, the largest since 2012, President of the European Economic and Social Committee (EESC) Henri Malosse travelled to the Spanish capital - and invited EUROPE to accompany him - for discussions with the national leaders and civil society figures of the ills affecting their country, chief among them the growing risk of a “lost generation”.
Malosse is not a fan of the notion of “lost generation”, which he likens to a “renunciation or sacrifice” already made on the altar of the economic crisis. Furthermore, the Spanish leaders have a similar aversion to this notion. People who use it, such as President of the Congress of Deputies of Spain Jesus Posada (People's Party) take pains not to specify whether they regard it as still a “risk”, a possible evil, but not an inevitable one.
Whether the generation of Spaniards under the age of 30 is lost - or not yet - it is certainly the most exposed, like the same generation in Greece, to suffering the longest from the effects of several quarters of recession, in parallel to almost unprecedented austerity policies and the many changes on the employment market. Today, nearly 55% of young Spaniards under the age of 25 are unemployed, whilst the average unemployment rate for all Spanish people of working age is now above 25%.
With these sad figures, the government of Mariano Rajoy has no option but to make youth employment a national priority of its political agenda. Naturally, therefore, this issue was the first to be raised by Rajoy at his meeting with Malosse, in one of the rooms of the Palace of Moncloa in Madrid, on Wednesday 19 March. The latest economic forecasts for Spain, which indicate hoped-for growth of the order of 1% in 2014, allow Rajoy to be cautiously optimistic. But as regards youth employment, the tone quickly turned to speaking out against the lack of support from the EU. Further proof that “Brussels” remains cut off from reality, both said.
“Too bureaucratic, with administrative procedures so slow that they would put off the biggest Europhiles” this, rightly or wrongly, is a criticism fairly frequently levelled against the European institutions. However, Rajoy, echoed by his Employment Minister Fatima Banez Garcia, whom Malosse met the same day, supported this criticism with a single figure: 1%. This percentage is the share Madrid has so far received of the total of €1 billion (current prices) pledged to Spain for 2014, in the framework of the youth employment initiative, and with the particular aim of setting the youth guarantee mechanism in place.
This kind of level of pre-funding is derisory. “This is a further handicap for countries which have to focus on adjusting public deficits”, said Garcia, who did not miss the opportunity to stress that the same sentiment prevails in other member states, such as Portugal, Italy and France. In the exceptional situation facing these countries, the especially classic and complex rules of the European social fund (ESF) are those which apply. This makes it hard for the Spanish government to understand how it can advance the sum of nearly €1 billion to set in place the premises of this youth guarantee, which it has incidentally already done, whilst having to carry out budgetary adjustments at the same time. Garcia said that the period of one year, or even a year and a half, to wait to receive the European funding is unacceptable.
Malosse was asked to take this complaint with him back to Brussels, but the response of the European institutions is in fact already a done deal. The discussions on the responsibility for this situation are like a tennis match, where the only aim is to send the ball back over the net. The European Commission is accusing the member states of not having executed the projects quickly enough, whilst justifying the pre-funding of 1% by the rules agreed by the same Council which is now complaining about the procedures. A member of the Commission's representation in Madrid stressed in vain that “stages will be omitted” from the procedure in order to transfer the money as quickly as possible: it cannot be done before December 2014. This means that the current outlay on this guarantee will certainly eat into the current national budget, as Madrid fears.
What will this Spanish version of the youth guarantee look like? Essentially, it will focus around an IT tool, to ensure the traceability of all young people looking for a job, training or a work placement. According to Garcia, the tool will be up and running in April of this year. The model used to develop it already exists, but is not aimed at young people. Malosse had the opportunity to visit the company Technosite, whose project is very similar to the youth guarantee principal, on Thursday 20 March.
This company, which receives 70% of its funding from the ESF, collects data on disabled jobseekers. It attempts to align these people's skills together with job vacancies in the companies which work with it. It also offers training and financial and logistical support, both to the employer and the employee, so that disability is not an obstacle to getting onto the employment market. Technosite is active in all sectors and throughout Spain. 200,000 people living with a disability have registered, with a net acceleration since the crisis began. 25,000 of them have found work. With the success of this model, it is hardly surprising that the Spanish government has asked this company for advice on creating its own system for young people.
Traceability, however, is only one of the aspects of the guarantee. As important as it is, it cannot guarantee an offer within four months on its own, if there is nothing in the database of available training, work placements or jobs. This problem was highlighted by the Confederacion Espanola de Organizaciones Empresariales (CEOE), which represents Spanish businesses. During discussions with Malosse on Thursday 20 March, one of the members of the CEOE, Juan Carlos Tejeda Hisado, emphasised the risk that this guarantee will not have the scope to deal with such a high number of young jobseekers, particularly as Spanish businesses are not structurally capable of taking them on. A dual system of learning and employment is currently being set up, Spain having long completely neglected the professional training sector. And here again, funding is a stumbling block, says Lourdes Mestre Cavero, a member of the CEOE. Furthermore, the Spanish mindset still firmly believes in the superiority of university education, which reflects a presumed high social status, Posada explained. And a further problem in the mix is the high number of young construction workers, many of whom have no qualifications at all.
Given the scale of the challenge of youth unemployment, the Spanish government is throwing itself into tackling the problem on many different fronts: reducing the tax burden for businesses; reforming the training system; promoting initiatives of the European Investment Bank; salary moderation; reducing the minimum wage for young people; making employment contracts more flexible. Some of these initiatives are akin to “tinkering”, said Malosse, such as the recent idea of bringing in a single employer's contribution of €100 per month for each full-time contract concluded for a period of at least three years. Even worse, other initiatives could prove counter-productive, such as reducing salaries, he warned. Following all of these meetings in Madrid, Malosse's conclusion is that Spain has no “real strategy” to get employment back on track. At the same time, the few good ideas, such as the youth guarantee, could quite simply end up “being killed off by the slowness” with which they are implemented. (JK)