The London-based Work Foundation said there is no one-size-fits-all solution to the problem because the reasons for long-standing cross-country differences in jobless rates are complex.
But it said Germany's renowned vocational training system, Denmark's strenuous efforts to head off youth unemployment at an early stage and the role played by flexible jobs in the Netherlands all deserved attention.
Youth unemployment, defined as a share of the total population aged 15-24, rose by 2 percentage points in the European Union between 2007 and 2011 to over 9% and by a whopping 11 points in Spain to 21%.
But the rate was unchanged in the Netherlands and fell by 2% in Germany, according to data from the Organisation for Economic Co-operation and Development (OECD).
Youth unemployment is much worse - exceeding 50% in Spain and Greece - if measured as a percentage of the economically active population, which excludes students and those in training.
By any measure, Europe is facing a major crisis that governments must tackle with all the means at their disposal, Stefano Scarpetta, the OECD's deputy director for employment, said at the launch of the report.
"I am actually somewhat surprised that in some countries where youth unemployment is 50% or more there are not more social tensions," he said.
Merkel fears instability
Speaking at the World Economic Forum in Davos last week, German Chancellor Angela Merkel said steps may be needed to prevent political and social instability from breaking out.
"Our main task must be to present perspectives and possibly even to provide bridging measures until they lead to a decline in unemployment. That's what the near future is about," she said.
Scarpetta said he was most troubled by the rise in long-term unemployment, disconnecting youngsters from the world of work.
In Italy, he noted, 10% of youngsters have given up looking for work because, as Merkel said, they see no prospects.
"They just don't participate in the labour market because many of them think there are no jobs for them," Scarpetta said. "If you want to talk about a scarred generation, this is the group of young people you have to focus on."
The report, which seeks to draw lessons for Britain, commended Denmark for making education and training a priority over work for youngsters with no qualifications.
It also called for measures to get more big firms involved in offering apprenticeships. In Germany, almost all firms with more than 500 employees take on apprentices; in Britain, under one-third do.