Auditors unaware if “Youth Guarantee” has provided a single job yet

S&D has strongly pushed for the Youth Guarantee. [The Irish Labour Party/Flickr]

Officials from the European Court of Auditors (ECA) responsible for screening the flagship Youth Guarantee initiative have admitted that they have yet to see a single young person who has found a job through it.

On Tuesday (24 March), the European Court of Auditors published its first report on the youth employment effort, which aims at providing a “good quality” job to young persons within four months of becoming unemployed. The initiative was established in response to declining job prospects for youth, exacerbated by the eurozone crisis (see background).

From 2014 to 2020, the EU allocated €12.7 billion from the EU budget for the initiative, and member states are expected to provide additional funding.

Iliana Ivanova, the ECA member responsible for the report, met with journalists and discussed the ECA’s findings.

The court doesn’t know how much of the €12.7 billion has been used so far. Nine member states have not provided any information about their commitments, while the remaining countries have done so in varying degrees of detail. The countries not reported Estonia, Spain, Finland, Ireland, Luxembourg, Malta, Poland, Sweden and the UK.

In the report, the ECA identifies three risks to the implementation of the Youth Guarantee.

The first risk relates to the risk of insufficient funding and the lack of information on the potential global cost of implementing the initiative throughout the EU. According to the International Labour Organisation (ILO), the cost of implementing the scheme could potentially reach €21 billion per year.

Five member states have been screened for the implementation of the initiative (France, Ireland, Italy, Lithuania and Portugal). Although the Commission has requested such information, none has provided estimated costs for the structural reforms needed to implement the program.

The second risk concerns the definition of a “high quality” job offer. As Ivanova explained, there is a risk that some companies could take advantage of the scheme to use young people as a source of cheap labour.

The third risk, as it was explained, is that Commission monitoring and reporting is inadequate. So far, the EU executive has provided support to member states for setting their national Youth Guarantee schemes, but it did not carry out an impact assessment, specifying expected costs and benefits, despite this being a standard procedure.

While the Youth Guarantee may appear an expensive initiative, its alternative would be to spend on unemployment benefits much greater sums, estimated at €153 billion a year, or over 1% of the EU’s GDP, not counting the social aspect of having many people unemployed over long periods of time.

A bigger and more critical ECA report is expected this summer.

In December 2012, the European Commission presented a proposal aimed at tackling youth unemployment across Europe. The initiative was adopted by the Council Recommendation of 22 April, 2013.

The package includes the so-called "Youth Guarantee". It is a tool that hopes to ensure that all youth under 25 receive a quality job, internship or education offer within four months of finishing school or becoming unemployed.

Over 5 million young people (under 25) were unemployed in the EU-28 area in the second quarter of 2014.

The EU countries with the highest rate of youth unemployment are Spain (53.8% in July 2014), Greece (53.1% in May 2014), Italy (42.9%), Croatia (41.5%), Portugal (35.5%) and Cyprus (35.1% in June 2014).

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