Youth Employment Initiative under threat in 2016

The Youth Guarantee aims to provide unemployed young people with training, employment or further education. [Jirka Matousek/Flickr]

The European Parliament hopes to extend EU funding to combat youth unemployment for 2016, but member states are reluctant to renew its funding. EURACTIV France reports

The Youth Employment Initiative (YEI), launched with much fanfare in February 2013 to help bring down the alarming level of unemployment among Europe’s young people, could be cut short.

The mechanism, equipped with a €6 billion budget to tackle youth unemployment in the worst affected regions, has struggled to show results.

Budget extension

Extending the YEI budget would support the implementation of the Youth Guarantee scheme. This programme aims to offer all European youth under the age of 25 a job, an apprenticeship, an internship, or further education within four months of the end of their studies, or their registration as unemployed.

The Guarantee was inspired by a highly successful Finnish programme, which brought reemployment rates of 79.2% in 2010 and 83.5% in 2011.

According to the International Labour Organisation (ILO), an efficient Youth Guarantee at a European level would cost €21 million. But there is no question of such a large sum being authorised in the European budget.

>>Read: Merkel admits EU’s youth unemployment initiative has been a failure

The funds needed to run the scheme in 2016 are under threat. Unimpressed by the speed of the first results, EU member states have not allocated the necessary credits for 2016.

Parliament rejects cuts

But members of the European Parliament have roundly rejected this cost-cutting effort. They decided to add a further €473 million to the programme to ensure its continuation into 2016.

“I am absolutely convinced that this programme should be extended,” the French MEP Élisabeth Morin-Chartier (EPP) told EURACTIV. “One of the problems of the Youth Employment Initiative is that we had allocated funds for 2014 and 2015, but not for 2016,” she added.

>> Read: Brussels cast doubts on French Youth Initiative

The scale of the unemployment crisis among those under the age of 25 had forced the EU to concentrate the available funds in a two year period, in an attempt to achieve quick results. “But the confusion surrounding the YEI and the Youth Guarantee, even among certain employment ministers, meant that nothing happened in 2014,” Morin-Chartier said.

A slow start

In May 2015, the European Commission decided to give a fresh boost to the languishing programme by increasing the availability of pre-financing for YEI projects from 1% to 30%.

It was hoped this measure would help struggling countries and regions find the necessary funds to launch their employment projects.

“But the regions in the greatest financial difficulty are also the ones with the weakest administrative bodies, and they often need more than just financial assistance,” the French MEP said.

Paris received €434 million to divide between the state and the country’s 16 regions worst affected by youth unemployment. The French Ministry of Labour told EURACTIV that €417 million of this had already been allocated.

>>Read: France to extend its Youth Guarantee scheme

This fund has in large part been focused on future jobs, targeting youths with few qualifications, and the Youth Gurantee, which rewards 18-26 year-olds for their participation in access to employment schemes and further education.

But so far, no assessment has been made of the impact of European funding on these employment programmes.

One positive indicator is that youth unemployment rates are falling. Unemployment among people aged under 25 in the EU peaked between 2007 and 2013, rising from 15.7% to 23.4%, according to Eurostat.

The situation in 2016

The number of unemployed youths fell to 20.1% in September 2015, but in the worst affected countries, like Spain, Greece, Croatia and Italy, the rate is still over 40%, two years after the launch of the YEI.

“We can see that the Youth Employment Initiative and the Youth Guarantee are starting to bear fruit,” a Commission spokesperson told EURACTIV. “500,000 young people have found work since last year.”

“The Commission will decide whether or not to extend the funding for this initiative into 2016 based on the member states’ reports on the implementation and impact of the Youth Employment Initiative, which are due for submission both at the end of this year and in March next year,” the spokesperson added.

The European Parliament and the Council are currently negotiating next year’s budget, and it is clear that the two institutions are expecting a power struggle.

“The Council will have a hard time changing our position,” Élisabeth Morin-Chartier warned. 

In February 2013 the EU's heads of state agreed to launch a Youth Employment Initiative, aiming to have the scheme up and running by January 2014.

At a summit in June 2013, they agreed to release €6 billion to alleviate the unemployment epidemic. This was made available over the period 2014 to 2015. The future of the mechanism in 2016 is uncertain.

A Youth Guarantee scheme, introduced by each EU country according to its individual need, applies 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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