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02/12/2016

Brussels unlocks funds for Youth Employment Initiative

Social Europe & Jobs

Brussels unlocks funds for Youth Employment Initiative

Marianne Thyssen [Henriette Jacobsen]

The European Commission is proposing to make €1 billion from the Youth Employment Initiative (YEI) available earlier and increase the pre-financing rate by up to 30 times for eligible member states in order to boost youth employment.

The proposal means that member states that benefit from the initiative could receive a third of the €3.2 billion allocation immediately after the adoption of the Operational Programmes.

Member states are expected to make the funding available immediately to project beneficiaries through advance payments for projects, which will be closely monitored by the Commission.

The Commission estimates that accelerated pre-financing could speed up immediate support and reach out to between 350,000 and 650,000 young people this year. At the current pre-financing rate, in contrast, this figure would be between 14,000 and 22,000 young people.

At a news conference in Brussels on Wednesday (4 February), Marianne Thyssen, the Commissioner for Employment, Social Affairs, Skills and Labour Mobility, defended the rate at which the member states are allocated their YEI money. 

“I would love to have had 100% (pre-financing rate), but we have rules we have to comply with and there are also some budgetary responsibilities that have to be respected. We have already given member states several facilities. It’s easier for them now to use this money. For example, we are not asking for co-financing by the member states or for the use of specific budget lines for the employment initiative,” Thyssen said.

“The new rate should allow member states to kickstart this process. It’s not an arbitrary figure, it’s budgetary management,” the commissioner continued.

Money ‘locked’ because of deficit constraints

The Commission’s initiative comes after some member states’ Youth Guarantee funds were ‘locked’ to comply with the EU’s strict public deficit rules.

Sweden, for instance, chose not to make its €118 million share of EU money available because it would have pushed the country’s public deficit above the agreed EU limit. As EU countries have to pay out the money in advance before the Commission reimburses retroactively, this would have sent Sweden’s budget deficit above the agreed limit.

>> Read: Youth Guarantee funds ‘locked’ in Sweden

More than five million young people aged 15-24 are unemployed in the EU today. This represents an unemployment rate of 21.9% with 23.7% in the euro area. More than 33% of these young Europeans have been unemployed for more than a year.

With an unemployment rate among young people at 51.4%, Spain has the highest YEI allocation of €943.5 million for the period 2014-15 and the Mediterranean country adopted the youth programme in December 2014. Greece, which has a youth unemployment rate at 50%, is set to receive €171.5 million for 2014-15, with pre-financing at €51.5 million.

Positions

Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue, said:

"With today's proposal, the Commission sends a clear signal that youth employment continues to be high on our political agenda. We will advance around 1 billion euro to support the work of Member States in helping to get young people back into work, to return to education or get a traineeship. In doing so, they are not only able to contribute to the economy and society through their skills and dynamism, but they also regain their dignity."

"The European Commission's priority is to deliver on jobs and growth. This proposal by Commissioner Thyssen is a good example of very concrete and practical measures to fight youth unemployment more efficiently. This is what European citizens expect from us," said Manfred Weber MEP, chairman of the European People's Party (EPP) Group in the European Parliament.

Johanna Nyman, president of the European Youth Forum, said:

“We are pleased to see that the European Commission is finally giving youth employment the priority that it deserves. The ball is now in the court of member states to support this proposal and to ensure that this funding reaches young people and to take action to provide quality jobs for young people and schemes to get them into these jobs. It is high time that young people are pulled out of the crisis that has engulfed them for so long!"

 

Background

The European Commission's proposal for a Youth Guarantee was presented in December 2012, formally adopted as a Recommendation to the member states by the EU's Council of Ministers on 22 April 2013 and endorsed in June 2013 by the European Council.

All 28 member states have submitted their Youth Guarantee Implementation Plans and are putting in place concrete measures. Implementation of national Youth Guarantee schemes is monitored by the Commission within the framework of the European Semester.

The European Social Fund, with an overall budget of around 86 billion euro in the 2014-2020 period, is a key source of EU funding to implement the Youth Guarantee.

To top up the European Social Fund in member states with regions where youth unemployment exceeds 25%, the European Parliament and the Council agreed to create a dedicated Youth Employment Initiative (YEI).

Further Reading