EU’s ‘Youth Guarantee’ scheme slacking

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So-called “Youth Guarantee” schemes have reduced unemployment of young people in Finland, but expanding the scheme to other European countries has been slow and lacking commitment. EURACTIV France reports.

Since last October, the commune of Bondy in the north-eastern suburb of Paris has put in place Youth Guarantee, a scheme to support people between 18-25 who are not in education, employment or training.

“We are among the first in France to set up a Youth Guarantee scheme”, said Arthur Frattini, local adviser in Bondy. This local mission was launched in October 2013 in the presence of the former French Prime Minister, Jean-Marc Ayrault, and the President of the French National Assembly, Claude Bartolone.

From Bondy to the National Parliament

“During the launch, I encountered Claude Bartolone and asked him to give unemployed youth a chance to work in the National Assembly,” said the adviser. It worked. Every day since, young people from the French “Banlieu” go and work in different services of the French legislative institution. This has had huge symbolic meaning for a young project.

“Since October, 49 people have joined the programme. We hope to have 152 by October 2014. 25% have already found a job. In the long-term we want to retrain 2/3 of participants,” said Arthur Frattini. In just a few months, the scheme has been a great success for the commune. “This is the best tool so far,” said the adviser, “even if results vary between different local activities.”

Monthly allowance: €433

Nevertheless, there are still faults in the scheme. Despite numerous advantages (such as a monthly allowance of €433, personalised support, training etc.), “potential participants are not queuing outside the building because the scheme is still relatively unknown,” stated Arthur Frattini. The monthly allowance sometimes takes 2.5 – 3 months to materialise, too much for participants with financial constraints.

Endowed with a budget of €30 million for 2014, the French Youth Guarantee scheme currently supports 10,000 young people in 10 priority areas where youth unemployment is over 25%.

From October 2014, 20,000 more people should be able to benefit from the scheme. It will also spread to encompass the whole of France by 2016. The aim for the future is to support 100,000 young French job seekers per year.

A Finnish scheme replicated across the EU

The Youth Guarantee is nothing new for some countries. In Finland, the scheme was put in place in 2005 to assist people under 25 who have finished their studies but have still not found a job or further training. The scheme’s scope was increased in 2013 to all people under 30.

The programme intervenes as soon as a person is made unemployed. Unlike in France, there is no waiting period and it aims to retrain or find them a job within a maximum of 3 months. It has been a resounding success: its success rate was 79.2% in 2010, and thanks to a budget increase, 83.5% in 2011.

Success in Finland inspired the EU to put in place a similar scheme. It aims to guarantee work, internships or training within four months after people under 25 become unemployed or finish their studies.

EU slow to get started

Between 2007 and 2013, youth unemployment reached record highs across Europe, dramatically increasing from 15.7% to 23.4% according to Eurostat. In countries like Spain (55.5%) or Greece (58.3%), unemployment rates reached critical levels.

Adopted in February 2013 , the pan-European Youth Guarantee scheme also aims to support people under 25 to find a job, training programme or an internship in the four months of them leaving formal education or becoming unemployed.

Most financing for the scheme comes from the European Social Fund. The Youth Guarantee will also benefit from an extension through the Youth Employment initiative. This will add €6 billion from 2014-2015 to programmes tackling youth unemployment in some of the worse hit areas.

Currently, different national programmes, like in France, do not receive money from the Youth Employment Initiative.

 >> Read: EU summit to warn youth guarantee laggards

According to the EU Commission, all member states except Finland have sent plans to set up their own Youth Guarantee schemes.

Budget is too small

Despite having announced greater funding, the European programme still does not receive enough. The extra €6 billion is a step in the right direction, but falls short of the required amount. According to the International Labour Organisation (ILO), an efficient Youth Guarantee at a European level would cost €21 billion.

This is not much when compared to what is at stake. According to the European Foundation for the Improvement of Living and Working Conditions, the cost of supporting the 7.5 million young people aged 15-24 who are not employed, training or studying, and the loss of their productivity will cost the EU €150 billion per year.

On the eve of the EU elections, the different European political parties have put youth unemployment at the top of their political programmes. “If Martin Schulz is elected, Youth Guarantee would receive €21 billion, not €6 billion!” claimed Pervenche Berès, top EU election candidate for the French Socialist Party.

Alexis Tsipras, far-left candidate for EU Commission President, also denounced the lack of European commitment to get young people back into the labour market. “Europe gave €1,500 billion to help the banks and only €6 billion to support young people”, he said in a televised debate on May 15.

EU heads of states agreed in February 2013 to launch a €6 billion Youth Employment Initiative, with the aim of making it fully operational by 1 January 2014.

At a summit in June 2013, they agreed to disburse about €8 billion – more than the 6 billion originally earmarked in February – to fight youth joblessness, with the bulk available over a two-year period starting in 2014 and the remainder becoming available over the full seven years of the next EU budget.

A Youth Guarantee scheme, introduced by each EU country according to its individual need, will apply to young people who are out of work for more than four months. It aims to give them a real chance to further their education, or get a job, apprenticeship or traineeship. The EU has a 2020 target of 75% employment for the working-age population (20-64 years).

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