While the EU agreed in April to re-target 6 billion euro to offer a “guarantee” of a job, training or apprenticeship within four months of someone becoming unemployed or leaving formal education, many think the measure alone isn’t sufficient enough.
“Six billion euros over seven years and for 28 countries is too small – even if the youth unemployment problem is not that pressing in some countries like Germany,” a policy expert at a Bruegel think-tank, Zsolt Darvas, told Reuters.
Even though overall unemployment is lower in Scandinavia, Sweden’s jobless rate being 8.7 percent, far below the EU average of 11 percent, young people still make up the bulk of the unemployment rate.
“It’s not possible to create jobs in a recessionary environment – you need growth to pick up,” an economist Carsten Brzeski explained.
According to a UN body responsible for promoting work and employee rights, the ILO, the EU would need up to 21 billion euro over the same period to reduce the current youth unemployment rate.
Eurofound, an EU agency whose goal is to improve working and living conditions estimates the cost of youth unemployment in Europe at over 150 billion euro a year in lost earnings and taxes, as well as unemployment benefit and other welfare payments.
EU leaders hope a program of training and apprenticeships, using a model that has proved a success in Austria, could help them make a dent in the record rate of unemployment.
Austria boasts the lowest unemployment in the EU at less than 5 percent, according to the EU statistics agency Eurostat. The country has long used training as a practical way to get fresh graduates into jobs. By partially-subsidizing the employment the government also gives employers the confidence – as well as a good reason – to hire.
A similar program has also proved a success in Germany where companies have been given incentives to offer young people one-year learning contracts that help them move into full-time jobs.
“There are many tools that can help, such as various training programs, internships, tax breaks for hiring the unemployed,” Zsolt Darvas said. “Yet it is economic growth that can really help address the crisis,” he added.
Chosen excerpts by Job Market Monitor
EU member states should guarantee that young Europeans do not remain out of work or education for more than four months, according to a scheme unveiled Wednesday by the European Commission. However the cost of tackling youth unemployment would largely fall to the states, said EU Employment Commissioner Laszlo Andor, adding that “the costs of … Continue reading »