EU promotes 'youth guarantee' scheme for the unemployed

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The European Commission has urged EU countries to ensure that all young people up to age 25 receive a quality job offer, education or internship within four months of leaving formal education or becoming unemployed.

 

Some 7.5 million young Europeans between 15 and 24 are either unemployed or left out of the education or training systems, according to the Commission, and more than one in five young Europeans on the labour market can't find a job. In Greece and Spain figures are as high as 50%.

The Commission's youth unemployment package, unveiled on Wednesday (5 December), features a so-called "Youth Guarantee", a tool which has proved successful in countries like Finland, Austria and Sweden.

"It's clear that the eurozone crisis is driving up unemployment and the young generation is the worst hit. The situation is clearly unacceptable and we must take action," László Andor, Commissioner for Employment, Social Affairs and Inclusion, told a news conference on Wednesday.

The Commission's package includes a recommendation for EU countries on introducing a youth guarantee scheme to ensure that young adults receive a quality job offer, continued education, an apprenticeship or an internship within four months of leaving formal education or becoming unemployed.

The guarantee's main objective is to ensure smoother transitions from school to work. It requires states to establish strong partnerships with the education system, training providers, public employment services and youth associations to ensure early intervention.

In Finland, 83.5% of young job seekers received a successful intervention within three months of registering as unemployed in 2011. The Finnish Youth Guarantee has resulted in a reduction in unemployment.

"Indeed, a youth guarantee has of course a fiscal cost for many member states. However, the costs of not acting are far higher," Andor said.

Young Spaniards hit particularly hard

Paula Espinosa Giménez, a university student from Valencia, described the situation for young people in Spain as "tough". She said most of the young Spanish people are unemployed and those who have a job are very worried they are going to lose it.

Many companies are closing and cutting back on staff and the public sector doesn’t hire anymore. Banks don't lend any credit, so it’s very hard to create a new enterprise and become self-employed, Giménez told EurActiv.

"Most of the young Spanish people that I know who are employed work in another country because it’s very hard to find a job which corresponds with their qualification," she said.

Giménez already has one degree in political science and administration, but she has decided to continue with her studies while at the same time looking for a job.

David del Pino Migallon, who holds a university degree in architectural techniques, has been unable to find a job since he became unemployed earlier this year. He said he was now considering taking a job he would be over-qualified for or a job that he wouldn't like.

"I have no hope that the unemployment situation improves, so I do not believe in being hired by a company. Actually, I am trying to find new skills, looking for new ideas to start my own business," del Pino Migallon said.

The high cost of youth unemployment

Andor stressed that youth unemployment is expensive. It costs member states €153 billion per year in terms of benefits paid and loss of tax revenue and earnings, or 1.2% of EU GDP, according to Eurofound.

Some countries - such as Bulgaria, Cyprus, Greece, Hungary, Ireland, Italy, Latvia and Poland - are paying 2% or more of their GDP on allowances. Avoiding these economic costs now and in the future outweighs by far the fiscal costs of the proposed employment guarantee, the Commission argues.

In addition to the long-term cost of unemployment to the economy and to society, the individuals concerned have an increased risk of future unemployment and poverty.

"The cost of doing nothing is therefore very high and let's be clear; youth guarantee schemes are investments," Andor said.

He added that the Commission is ready and willing to make substantial financial contributions to the European Social Fund and other EU funding mechanisms. The amount will depend on the outcome of the negotiations on EU's long-term budget (2014-2020).

Positions: 

Sergei Stanishev, president of the Party of European Socialists, said: “I welcome the Commission’s recommendation to member states on introducing the youth guarantee but we need to put these words into action especially on funding. That this proposal is on the table at all is due to the persistent pressure of László Andor, EU Social Affairs Commissioner. The reference to ‘quality’ employment was a major victory for László. It ensures that the guarantee gives young people a real and not just a cosmetic opportunity. Now we must make sure that he gets that support from Europe’s leaders.”

Milan Cabrnoch, a Czech MEP who is employment spokesman for the European Parliament's European Conservatives and Reformists (ECR) group, said:

"This is a typical EU response to a problem: well-meaning but completely misguided. Of course we need to take action to tackle youth unemployment but the EU cannot just create jobs or apprenticeships. National governments need to do all they can to promote youth employment. If governments believe a Youth Guarantee will work for them then they should implement it at national level but this should not be another one-size-fits-all European initiative. Rather than spending their time thinking up utopian ideals, perhaps the Commission should think about the employment red tape they could slash and the pro-business measures they could develop. The best way to assist young people to get into employment is a flexible labour market. Unfortunately, directive after directive from the EU has made employing people more cumbersome and costly for businesses, shutting young people out of the jobs market."

Csaba Őry, a Hungarian MEP at the European People's Party (EPP), commented: "We welcome the goals and the proposals of the European Commission aiming to tackle youth unemployment in general. We especially welcome that, besides national initiatives, there are now EU-level proposals. There is no disagreement that we need to tackle unemployment and to place special focus on youth employment. However, the EPP Group has reservations about the possible introduction of the youth guarantee at member-state level. This is not the right answer. All 27 member states face different challenges in the field of youth unemployment, requiring special, tailored solutions. A commitment taken by the member states to guarantee jobs which in reality do not exist is not part of the solution and would only further trigger difficulties and tensions on the labour market. The youth guarantee suits some member states well, but is not the silver bullet for all of them."

University student Stephanie Schulz is currently doing an internship at the Bosch Representation Office in Brussels. She said she was studying and doing internships abroad as the politicians in her home country Germany recommend. She said:

"I know many people who have written more than 150 job applications after they graduated even though they come from good schools. So of course I am aware of the fact that it isn't easy to immediately get a job after graduation. I'm doing my best to be well-prepared."

The President of the European People’s Party (EPP), Wilfried Martens commented:

“We welcome the Youth Employment Package, which was presented by the European Commission, and particularly the Youth Guarantee. Youth unemployment is today one of our main concerns in Europe. It is our duty to offer a perspective and high-quality jobs to young Europeans. Tackling youth unemployment is, therefore, a major priority for the EPP and for the EPP governments in the EU member states."

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