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.
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.