Between 2007 and 2013, youth unemployment reached record highs across Europe, dramatically increasing from 15.7% to 23.4%, according to Eurostat. EU heads of state and government agreed in February 2013 to launch a €6 billion Youth Employment Initiative (YEI) to get more young people into work. 

Overview

During a summit in February 2013, EU leaders agreed to tackle the devastating unemployment rates among young people aged 18-25 in Europe by setting up the €6 billion Youth Employment Initiative (YEI). Four months later, heads of state and government agreed to disburse another €2 billion to fight youth joblessness, with the bulk available over a two-year period, starting in 2014, and the rest over the full seven years of the next EU budget.

Greece, Spain and Italy will receive the biggest share of the YEI, €3.4 billion. Youth unemployment rates have reached critical levels in Spain (55.5%) and Greece (58.3%). Although the YEI will provide a general stimulus to the economy, it is mostly about giving a chance to young people to gain their first job experience.

A Youth Guarantee scheme, inspired by the national scheme in Finland, will be introduced by each EU country according to its individual need. It will apply to young people who are out of work for more than four months. It aims to give them a real chance to further their education, or get a job, apprenticeship or traineeship.

The proposals for implementation of the national schemes were supposed to be ready at the end of the year 2013, making the YEI fully operational by 1 January 2014. But by June 2014, only France had received an approval for its national scheme. The Commission will make funding available so that France can receive €620 million from the YEI and the European Social Fund (ESF).

This led the German Chancellor Angela Merkel to say that youth unemployment is "clearly" one of the areas where the EU needs to act faster.

“I’m not pointing my finger at anyone, but nobody is able to understand why this is happening. Again, I'm not blaming the Commission, the member states, I'm just saying that the result is such that we need to change this,” the German Chancellor said.

Issues

Internships

Unemployment has forced many young Europeans to take on internships which many youth organisations brand "cheap labour".

During the European Parliament election campaign, the issue of unpaid internships was broached by the Socialist candidate for Commission President, Martin Schulz, and the Green candidate Ska Keller. For example, Schulz tweeted after a TV debate: "Unpaid internships are the modern form of exploitation".

Member states recently backed a European Commission initiative to safeguard interns from exploitation, but the move was criticised by trade unions and youth groups. Under the Quality Framework for Traineeships, employers should make it clear in advance whether an internship will be paid or not, its educational objectives, working conditions, and the method of supervision. 

It does not include proposals to force employers to pay interns or offer them social protection. The European Youth Forum called it a "missed opportunity". 

Speaking at the European Parliament on 7 April, the vice president of the European Youth Forum, Lloyd Russell-Moyle, said that the national youth guarantees are a disappointment because they are open to abuse as they don't exclude unpaid internships. Young people should have a right to decent occupation, he stated.

"Internships are of course useful, but only if they are properly regulated. Or else it's just cheap labour," he said.

Marco Fantini, from the Commission's DG for Employment, Social Affairs and Inclusion, and deputy head of the youth employment unit, said during a public debate in April 2014, that regulating internships was particularly difficult because trainees are among the weakest participants in the labour market.

He said, "There is a difficulty in protecting trainees but we need to make sure that giving usefulness for traineeships at the beginning of the career provides a good transition from school or university to employment. There's also a need to avoid discouraging companies from providing traineeships.

"The Quality Framework for Traineeships has to strike a good balance between these two needs; limiting abuse, and making it useful, and not frightening providers, and making them refrain from providing traineeships," Fantini said.

Quality jobs

In an interview with EurActiv in April 2014, the president of the European Youth Forum Peter Matjašič acknowledged that the YEI provides an unprecedented opportunity to enact progressive change in Europe that could improve the economic situation of young people.

He added,"The lack of political ambition is illustrated by the amount of funding, which is not enough for the Youth Guarantee to be fully successful but also by the difficulty to develop a coherent and comprehensive approach to tackle youth unemployment."

Matjašič added that youth organisations want a "quality assurance". The Youth Guarantee must not create poor quality jobs and poor quality training for youth as this will just perpetuate the issue of precarious work, which young people since the crisis are increasingly forced to undertake.

The risk of poverty for young people is at a high 30%, Matjašič added. Youth unemployment, if not adequately tackled, can risk trapping young people in the poverty cycle. Long-term unemployment can have lead to a lack of confidence, depression and even suicide.

Youth organisations are also criticising member states for being too slow in implementing their own Youth Guarantee schemes and the process for not being transparent enough.

France moving forward

France has so far been only EU country to receive an approval for its national scheme. The Commission will make funding available so that France can receive €620 million from the YEI and the European Social Fund (ESF). The money will go towards helping young people who not in employment, education or training (the so-called NEETs) to find a job in those regions where youth unemployment rates are over 25%.

But though France secured the EU funds, the Commission has criticised the efficiency of national measures.

"Public services to promote youth employment (called 'local missions') are having difficulties proposing appropriate services to job-seekers," the Commission said in its recommendations on France's 2014 national reform programme, issued on 2 June.

According to the Commission, the measures taken by the French government to deliver the Youth Guarantee are "insufficient".

"The actual quality of this support, which includes CV-writing workshops and interview simulations, is unclear at this stage. Moreover, this guarantee only tackles a minor part of the overall youth unemployment, as there are 674,000 young people registered in total," the Commission said.

German Chancellor Angela Merkel, also criticised tmember states that haven't submitted national plans enabling them to seek money from the YEI at the start of 2014.

"Six months afterwards, we are here and not one euro has been spent. I can only agree. Yes, you are right, it needs to be more efficient. We need to be faster. We need to be more efficient. We need to be more effective. It needs to be possible for us to spend the money, and to spend the money sensibly," Merkel told journalists at the Council summit in Brussels on 27 June.

In the UK, a report by the House of Lords EU Committee has called on the British government to rethink the way it uses European funding. It should adopt the EU's Youth Guarantee scheme, the Committee chairman Baroness O’Cathain said.

“Our report looked at ways in which EU funding could be better used to help get young people into work, and we believe that the government should rethink its centralised approach to spending EU money, and that instead it should tap into the expertise of local organisations. We would also encourage the UK government, and other member state governments, to use European money to establish new initiatives and learn from other countries,” the Baroness stated.

Housing problems...

One of the problems many unemployed young people have is finding affordable housing in Europe's big cities, while for example studying or doing an unpaid internship.

Freek Spinnewijn, director of the European Federation of National Organisations Working with the Homeless (FEANTSA), and Marc Uhry, coordinator for European Affairs at the Fondation Abbé Pierre, said that over the past 15 years, the housing act has been a driver of inequalities.

Housing costs have consistently climbed for families on low incomes, while simultaneously remaining stable for the richest.

Spinnewijn and Uhry said that there are clearly good reasons to do something about housing in Europe. Doing something will mean better responses to social needs, new stimulation for the economy, improved environmental protection, and defence of the democratic system.

"In fact, public investment in the housing sector isn’t public spending in the traditional sense. Even in the case of low rents, there is always a return on investment," they said.

... and other difficulties

Other obstacles for young people include alternative employment agreements. For example, zero-hour contracts are breaking new records in the UK, according to the British Office for National Statistics. These contracts tie employees to their jobs without any obligation for the employer to guarantee a minimum number of paid hours and have prompted calls by the European Commission to offer better social protections for those covered by the controversial employment agreement.

The zero-hour contracts are mostly found in hotels and restaurants but also in the health and the education sector, data has shown. 

Data has also revealed that women, elderly and young people are the most frequent targets of zero-hour contracts, prompting the UK Labour party to accuse the Conservative-led government of encouraging them.

Meanwhile in Denmark, an increasing number of private companies use competition clauses for student jobs, keeping newly graduates from getting employed. The clauses are to protect the interests of companies when employees change jobs. These clauses are increasingly becoming part of contracts for student-relevant jobs in Denmark.

Djøf, trade union, said the tendency is due to companies trying to preserve their markets. Therefore, they try to ‘lock’ the students through the clauses.

“We actually think this is preposterous,” Helene Rafn, chief for salary negotiations at Djøf, said. “It will have enormous consequences for the new graduates’ possibilities of getting employed after graduation,” she said, adding that the students should try to avoid the clauses as much as possible.

Skills mismatch

While many highly educated Europeans are unable to find a job, some sectors in the EU, especially the booming ICT sector, is expected to lack 700,000 workers by 2015 and 900,000 workers by 2020, though digital innovation and needs can be very hard to predict. 

“The real issue is that there are going to be skill gaps. There are people out of work in Europe and we ought to be doing everything we can to address both of those problems; filling the gaps and getting people out of unemployment and into work,” John Higgins, director general of DigitalEurope, an industry trade group, told EurActiv in an interview.

However, many ICT-related educations are not providing the ICT sector workers that suit the industry needs, making them unemployable in the worst case.

The solution could be better cooperation between employers and the academic sector when designing courses. A common certification for standards across countries and the industry would also result in more people getting employed, Higgins said. 

Positions

Speaking in the European Parliament on 7 April 2014, the vice president of the European Youth Forum, Lloyd Russell-Moyle, said: "Internships are of course useful, but only if they are properly regulated. Or else it's just cheap labour."

Marco Fantini, from the European Commission's DG for Employment, Social Affairs and Inclusion, and deputy head of the youth employment unit, has stated that regulating internships was "particularly difficult".

"There is a difficulty in protecting trainees, but we need to make sure that giving usefulness for traineeships at the beginning of the career provides a good transition from school or university to employment. There's also a need to avoid discouraging companies from providing traineeships."

Martin Schulz, the President of the Parliament President, tweeted after a TV debate in spring: "Unpaid internships are the modern form of exploitation."

"The lack of political ambition is illustrated by the amount of funding, which is not enough for the Youth Guarantee to be fully successful but also by the difficulty to develop a coherent and comprehensive approach to tackle youth unemployment," said Peter Matjašič, president of the European Youth Forum.

The chairman of the UK's House of Lords' EU Committee Baroness O’Cathain has stated that the UK government should rethink its centralised approach to spending EU money, and that instead it should tap into the expertise of local organisations: "We would encourage the UK government, and other member state governments, to use European money to establish new initiatives and learn from other countries,” she said.

John Higgins, director general of DigitalEurope, has stated that the ICT sector is in desperate need at the moment of highly-skilled workers: “The real issue is that there are going to be skill gaps. There are people out of work in Europe and we ought to be doing everything we can to address both of those problems; filling the gaps and getting people out of unemployment and into work.”

German Chancellor Angela Merkel complained about the slow pace at which the EYI is being implemented. "Six months afterwards, we are here and not one euro has been spent. I can only agree. Yes, you are right, it needs to be more efficient. We need to be faster. We need to be more efficient. We need to be more effective. It needs to be possible for us to spend the money, and to spend the money sensibly," Merkel told journalists.

"I'm not pointing my finger at anyone, but nobody is able to understand why this is happening. It's not really worth saying... Again, I'm not blaming the Commission, the member states... I'm just saying that the result is such that we need to change this," the German Chancellor continued.

Timeline

  • 7-8 Feb. 2013: Youth Unemployment Initiative proposed with a budget of €6 billion for the period 2014-20.
  • June 2014: France becomes the first country to adopt a programme under the YEI.
  • 26-27 June 2014: EU leaders agree to make youth unemployment one of the five priorities for the next Commission term.