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Saturday, 21 December 2013

The battle against youth unemployment seems to get momentum in the European Union… finally.

Suddenly, during the last months of 2013, the concept ‘youth unemployment’ seems to be at everybody’s retina. Lately, discussions upon this topic have been organized in countries all over Europe and at once there seems to be a sense of urgency, which had been missing during the first years of the Euro-crisis.

It seems that the European politicians suddenly found out that a largely balanced government budget and an increased national debt position might be enablers, but by no means the solution for return of economic growth and increased employment in the European Union.


My loyal readers know that (youth) unemployment has been on MY retina from the early beginning of this blog. Here are links to four examples of my writing: 

In November, the European Commission published  a memo with measures to tackle the European youth unemployment. The reasons for this were grim, as this must-read memo emphasized:

What is the current situation?
  • 5.6 million young people were unemployed in the EU-28 area in September 2013.
  • This represents an unemployment rate of 23.5% (24.1% in the euro area). More than one in five young Europeans on the labour market cannot find a job; in Greece and Spain it is one in two.
  • 7.5 million young Europeans between 15 and 24 are not employed, not in education and not in training (NEETs).
  • In the last four years, the overall employment rates for young people fell three times as much as for adults.
  • The gap between the countries with the highest and the lowest jobless rates for young people remains extremely high. There is a gap of nearly 50 percentage points between the Member State with the lowest rate of youth unemployment (Germany at 7.7% in September 2013) and with the Member State with the highest rate, Greece (57.3% in July 2013). Greece is followed by Spain (56.5%), Croatia (52.8%), Cyprus (43.9%), Italy (40.4%), and Portugal (36.9%).
  • The potential of job mobility to help tackle youth unemployment could be further developed: the workforce in employment in the EU is around 216.1 million persons of which only 7.5 million (3.1%) are working in another Member State. EU surveys show that young people are the group most likely to be mobile.
  • The situation is clearly unacceptable: this is why the Commission has been working with Member States to tackle youth unemployment. 

As an answer to the soaring youth unemployment, the EU tries to deploy the Youth Guarantee: a set of sensible and very necessary measures for reforms within the European Union-countries, that should all increase youth employment and employability [I strongly advice my readers to read these measures indeed - EL].

The EU countries need to deliver a so-called Youth Guarantee Implementation Plan before the end of December [According to the aforementioned EC memo, the countries with lower youth unemployment had originally until spring 2014, but the EC now wants these plans to be deployed before January 2014 - EL]

This Youth Guarantee plan is not one second too soon; to the contrary, actually it is already four years too late... 

What started as a relatively small and very much containable problem in the PIIGS (Portugal, Italy, Ireland, Greece and Spain) and Eastern European countries early 2009, has turned into a tidal wave of youth unemployment: only seven European countries (out of 28) currently have a youth unemployment of less than twenty percent (October 2013).  

See for instance these two gruesome charts, which show the spread of youth
unemployment among young males and females: 

Youth unemployment among European male youngsters
Chart by: Ernst's Economy
Data courtesy of: Eurostat
Click to enlarge

Youth unemployment among European female youngsters
Chart by: Ernst's Economy
Data courtesy of: Eurostat
Click to enlarge
One of the most dangerous developments – also in countries with relatively little youth unemployment, like The Netherlands – is that youngsters start to withdraw themselves from the official labour market and unemployment databases: the so-called ‘discouraged workers’.

When these youngsters return to school, this is not such a bad development after all.

However, when these youngsters go into an uncertain adventure, as freelancer with a poorly paid assignment or no assignment at all, they simply disappear from the radar of the employment agencies.

The same happens, when these unemployed youngsters return to living with their parents and abandon their attempts to give their careers a kickstart. 

And with every non-working year, it is harder to mediate for these youngsters, as companies either want young and unexperienced workers, or older and experienced workers. These unemployed youngsters could easily become neither of those two.

It would perhaps be overly pessimistic to speak of a lost generation, but this could become reality if the European Council and Commission don’t act more quickly in the immediate future, than they did within the last four years.

For me this European Commission plan is a good start. 

Nevertheless, if you read that between the first conception by the European Commission in 2012 and the final offering of the national plans at the end of 2013 lie one-and-a-half years, you can scream for shame and despair.

At least, everybody and all countries are now working on the subject right?! 

Well, not exactly.

This interesting article by the website Euractiv shows unfortunately, that not all countries are doing their utmost to deliver their Youth Guarantee Implementation Plans (YGIP) in time.

EU countries that have not yet submitted their national plans to introduce so-called Youth Guarantee schemes will be requested to do so without delay at an EU summit, which opens in Brussels today (19 December).

Internal European Commission documents seen by EurActiv reveal that a majority of countries have not sent any plans and risk losing the funding for the initiative, aimed at tackling youth unemployment.

The draft conclusions of the summit, obtained by EurActiv, call on member states that have not yet submitted their Youth Guarantee Implementation plans to do so without delay.

Under the Youth Guarantee, young people without a job will be guaranteed an offer of employment, training or further education within four months of finishing school or becoming unemployed (see background).

A €6 billion pot in the EU budget for 2014-2020 has been set aside to tackle youth employment in regions with high levels of unemployment.

Only member countries that have submitted their national plans and who qualify will receive money, an EU source told EurActiv. The deadline for submitting the plans was just before the summit, and countries that did not submit national plans would be named at the summit by the Commission, the source added.

According to the Commission, the cost of not acting under the Youth Guarantee will in fact be much higher. The European Foundation for Living and Working Conditions (Eurofound) has estimated the current economic loss of having 7.5 million young people out of work or education or training at over €150 billion for the EU every year (1.2% of EU GDP) in terms of benefits paid out and lost output.

According to a Commission paper obtained by EurActiv, only 11 out of the 28 members have submitted national plans. The Czech Republic and Hungary have submitted a final draft, while France, Croatia, Italy, Lithuania, Luxembourg, Poland, Portugal, Romania and Slovakia have submitted a first draft.

The document shows that Austria, Belgium, Bulgaria, Cyprus, Germany, Denmark, Estonia, Greece, Spain, Finland, Ireland, Latvia, Malta, the Netherlands, Sweden, Slovenia and UK have not submitted their national plans within the required deadline.

The United Kingdom is a funny case here: while the House of Lords demanded evidence that the EU is actually busy with fighting youth unemployment, the country itself ‘forgot’ to deliver its YGIP in time.

To paraphrase a very significant leader in the past: Ask not what the EU can do for you, but what you must do for the EU to help your own country!

I hope that this initiative will be enough to fight youth unemployment within the European Union; logically speaking, youth unemployment will be often followed by long-term adult unemployment and poverty for our treasured youth. 

Unfortunately, the €6 billion budget for the Youth Guarantee plan – although plenty of money   is actually ‘a token amount’, when compared to the €55 billion that will be collected in the resolution fund of the European Banking Union. 

That is something that the European Council, aka our national government leaders should be really ashamed about.

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