As Germany and France meet today (28 May) over a joint youth employment initiative, EU officials have rebuffed as “groundless” and “dangerous” criticism from the German finance minister that the Commission is failing to address joblessness, EURACTIV Germany reports.
Ministers from both countries will unveil in Paris the initiative's blueprint and allow the European Investment Bank to unlock billions of euros in loans to companies to create jobs for young people.
The proposals have been called a “New Deal for Europe” and echo the drive by President Franklin D. Roosevelt to cut United States unemployment in the 1930s, the Rheinische Post reported this month.
But sources say German Finance Minister Wolfgang Schäuble has angered the president of the European Commission, José Manuel Barroso. Schäuble’s complaint that the Commission has been ineffective in its approach towards fighting youth unemployment has not gone down well amongst other EU officials either.
They accuse Schäuble of trying to deflect blame towards the Commission “because Germany has had to take a lot of flak for its perceived policy of pure austerity in Europe”, say EU sources interviewed by euractiv.de.
At the public broadcaster WDR’s Europaforum, a yearly forum on the future of Europe, Schäuble said the Commission had been too slow in implementing unemployment support programmes in Portugal and Greece. “In the end nothing will happen because [the commissioners] stall each other,” he said.
“There are credit schemes for Portugal which have been set up by the European Investment Bank and which have not been given the green light by DG Competition for 12 months now … We cannot build Europe by telling an entire generation to wait for ten years. This is why we now have to pick up our pace,” he added.
One Commission official told euractiv.de that the remarks came “out of the blue”. He added that directing criticism towards one of the hosts of the forum “without having the evidence to back it up” was inappropriate.
“One simply does not comment on the internal management of a federal or European administrative body. This was just uncalled-for,” the official said.
The official riposted that Barroso had strengthened internally the powers of the economic and monetary affairs commissioner, Olli Rehn, who Barroso appointed as vice-president.
The current Commission had expanded further Rehn’s directorate-general, he added. “Thus, Olli Rehn is precisely the Commissioner responsible for Greece for which Mr Schäuble was calling. Mr Rehn has clear decision-making authority in this matter. However, the Commission is a communal body where the commissioners make joint decisions,” he said.
“It would be interesting to know whether this was a personal slip-up by Mr Schäuble or whether the German government actually believes that the Commission pursues an inefficient and flawed emergency policy, as Mr Schäuble suggested in his remarks,” one Commission official said.
Passing the buck
“To us, this was a rather obvious move by Mr Schäuble to portray Germany’s austerity policy, for which it has been highly criticised, in a positive light. He is trying to pass the buck to others, namely the Commission,” the official said.
The source said the Commission is limited its political power to solve the youth unemployment crisis and that results would come from the efforts of EU member states.
The source was quick to highlight the work of the EU executive.
“We have established action teams responsible for reallocating €16 billion of structural funds directed at young people and small and medium-sized enterprises. We have submitted a proposal for a European Youth Guarantee. We have pushed for the Youth Employment Initiative to become a reality in the new financial framework. We haven’t done anything that can be criticised. With regard to Greece, we have also done our utmost to achieve progress. This is why Mr Schäuble's accusations are groundless and irritating,” the official said.
Governments and the EU executive have tried for the most part to present a united front against the economic crisis in a bid to reassure the markets and austerity-hit citizens. The EU source said it was not in Germany’s interest to claim a discrepancy between the action taken by the German government and that of the Commission.
“This could even turn out to be dangerous should Germany decide to depart from our common path. It might be once again interpreted as a lack of capacity for action in Europe or it could demonstrate that we are not following a common line of action.”
The Commission official also categorically rejected Schäuble’s claims of delays to the implementation of the Youth Employment Initiative.
“In February 2013, the heads of state and government issued a political declaration stating that they would welcome a Youth Employment Initiative amounting to €6 billion in the new EU budget for 2014 to 2020. Only a few weeks later, the Commission submitted a proposal describing specifically how this could be achieved. The ball is now in the court of the governments, the Council and the Parliament to issue a corresponding resolution after the final adoption of the financial framework," he said.
However, the official added that it would be untrue to believe that the Commission was able already to spend the funds, which are only available from 2014. The EU executive is also not opposed to German plans for bilateral youth employment schemes. “Quite the contrary, we are aware of the restricted possibilities on the European level and welcome any action on national levels that contributes to the fight against youth unemployment.”
Youth unemployment in the EU will remain above 17% until 2015, the International Labour Organization said on 8 May in a report, “Generation at Risk”. Joblessness among young people has reached a record 57% in Spain and 42% in Portugal.
For the EU as a whole, unemployment is 10.9% and in the 17-member eurozone it reached a record 12.1% of the working population in March, according to the latest public figures.