Eurozone – Tackling the dramatic situation of young people

European News

european unionBRUSSELS – International News – Tackling the dramatic situation of young people was the topic of a speech delivered in Europe today by László Andor, the European Commissioner responsible for Employment, Social Affairs and Inclusion.

Here is the text of the address:

Ladies and gentlemen,

We need to address the dramatic situation of young people in Europe. I say ‘dramatic’ because there is simply no other way to put it.

Action is needed and I am pleased to present to you the new Youth Employment Package on offering more job opportunities for young people.

Young people are severely hit by the impact of the crisis: nearly one in four young Europeans on the labour market cannot find a job; in Greece and Spain it is even one in two. Indeed, in most Member States, youth unemployment rate in the EU is more than twice as high as the rate for adults.

Too many young people are neither in employment nor in education or training – we’ve even created a label for them, the “NEETs”. In the EU as a whole there are 7.5 million of these NEETs under 25 and another 6.5 million from 25 to 29. Together they represent the equivalent of the total population of our seven smallest size Member States! The biggest risk is for them to drift away from society, into social exclusion and poverty.

[pullquote] Young people are severely hit by the impact of the crisis: nearly one in four young Europeans on the labour market cannot find a job; in Greece and Spain it is even one in two. Indeed, in most Member States, youth unemployment rate in the EU is more than twice as high as the rate for adults. [/pullquote]

The fact that there are so many excluded young people has dramatic consequences not only for these young people themselves, but also for our economies and societies as a whole.

Of course, we need to find real solutions to Europe’s crisis, we need an approach that is jobs-centred, both in its motivation and in its measures. We need a new paradigm where labour is not just seen as an adjustment variable, but is recognised as a precious and valuable source of growth in its own right.

But we must also specifically support young people in their often difficult transition from school to work. It is a priority, it is a duty for us.

We must also recognise that this is a sound investment. And we must learn from what works and what does not. One cannot say it enough: we simply cannot afford to sit idly by – we must step up our efforts.

A lack of skills — and of the right skills — is still one of the factors explaining these high levels of youth unemployment. Young people with low educational qualifications are up to three times more at risk of unemployment than their better trained peers. At the higher end of the skills scale, there is also a mismatch between supply and demand for skilled labour. Businesses are warning that they will not be able to fill hundreds of thousands of high level jobs in the EU in the next few years. This is a very serious obstacle to economic growth.

These challenges are common to all Member States so that an EU-level response is urgently needed.

The EU and the Member States took an important first step in 2010 by putting youth issues at the heart of our Europe 2020 strategy by setting targets for education, employment and poverty reduction, all of which likely to benefit young people directly.

This fed into the European Semester process, with almost all Member States receiving country-specific recommendations on youth employment and education issues in 2011 and 2012.

One year ago, the Commission adopted its ‘Youth Opportunities initiative’ calling for a stronger partnership between the Commission and Member States to tackle the situation, in particular in those Member States with the highest youth unemployment rates. EU Structural Funds were also mobilised to increase support to youth. To support the Member States, the Commission set up Action Teams of EC and national officials who met last February in the capitals of the 8 countries most affected. As a first result, €10 billion (from the European Social Fund and European Regional Development Fund) are now targeted for reallocation and are due to benefit 658,000 young people.

With the Youth Employment Package adopted last week, the Commission has further stepped up its action with concrete initiatives. We propose new tools to address short term but also structural problems behind the youth employment crisis.

We have decided to reinforce support to young people by focusing on ways to facilitate transitions from school to work. This is crucial to reduce the high numbers of NEETs while equipping young people with the skills and experience they need to get a job.

In the Youth Employment Package, we present four initiatives:

Firstly, we are proposing a Council Recommendation on establishing a Youth Guarantee. We call on each Member State to implement the Youth Guarantee through establishing a scheme that ensures that all young people up to 25 years of age receive a quality offer of a job, continued education, apprenticeship or a traineeship within four months of becoming unemployed or leaving formal education.

The Youth Guarantee is based on specific guidelines covering strong partnerships with all stakeholders, including local and regional authorities, early intervention and activation, and making full use of EU funding.

The Youth Guarantee is already applied effectively in Finland and Austria.

A Youth Guarantee has of course a fiscal cost in the short run. However, this cost is much lower then inaction. Do you know that the costs of NEETs – in terms of benefits paid out to unemployed young people, foregone earnings and taxes – are estimated to be the equivalent of 1.21 % of EU GDP, i.e. an annual loss of €153 billion for the Member States?

How would the Youth Guarantee be financially supported?

First, the Youth Guarantee would be fully supported by the European Social Fund. The Commission has proposed that in 2014 to 2020 labour market integration of young people would be a specific Social Fund investment priority .

Second, in the 2013 Annual Growth Survey, we identify expenditures that should be prioritised by Member States as part of growth-friendly fiscal consolidation – I mean expenditure that is vital in order to preserve our future growth potential. The Commission considers that a Youth Guarantee would generate positive returns in terms of improving Member States’ economic situation in the long run and therefore constitutes an investment, in the same way as education. The Commission considers that investment such as financing a Youth Guarantee should be prioritised and strengthened, while ensuring the efficiency of such expenditure.

The incoming Irish Presidency of the Council has committed itself to seeking swift adoption of the Youth Guarantee proposal by the February Council of Employment and Social Affairs Ministers and I will be doing all I can to support them.

The second initiative in the package is working towards setting up a European quality framework for traineeships.

Traineeships provide an excellent way to ensure smooth education-to-work transitions. However, they are too often used to replace permanent jobs. The Framework would encourage companies to offer traineeships that provide high quality learning content and fair working conditions. A public consultation earlier this year confirmed wide public support for this initiative.

We have launched a second consultation of European social partners on this subject. Either they decide to negotiate on such a framework or the Commission will make a proposal next summer.

The third part of the package aims to improve the quality and the supply of apprenticeships with a European Alliance for Apprenticeships.

There is evidence that dual vocational training systems facilitate school-to-work transitions. Youth unemployment is significantly lower in Member States with extended work-based learning programmes.

Austria and Germany are cases where the dual vocational training system helps both the economy and the labour market to function well. Why not to share this know-how with other Member States? We expect the new European Alliance to efficiently spread good practices in this field.

The European Alliance will promote national partnerships for developing successful apprenticeship schemes. We will also develop common curricula for various professions and ways of recognising apprenticeships undertaken abroad.

The fourth part of the package aims to improve labour mobility for young people within Europe by opening access to more job opportunities for young people.

To facilitate mobility, the Commission will transform EURES, the network of European Employment Services, into a more flexible, demand-driven employment instrument.

The EURES job mobility portal will be modernised so it can offer better possibilities for job matching on line.

“Targeted mobility schemes” for young people in the form of small-scale, tailor-made recruitment campaigns will address particular vacancies in certain occupations, sectors or Member States.

We will also include within EURES apprenticeships and traineeships that are linked to a job.

As a first step, the pilot project ‘Your first EURES Job’ specifically targets young people.

Clearly regional and local authorities have a key role to play in implementing the Youth Employment Package.

This is particularly the case for youth guarantees, where many existing initiatives have been launched at regional or local level.

I therefore call on European regions and local authorities to mobilise and work with us to create a better present and a sustainable future for our younger generation.

In view of the enormity of the youth unemployment crisis, we have to invest in Europe’s youth now. We need to reach out to young people and ensure that their transition into work is successful. The costs of not doing so would be catastrophic.

One of our biggest challenges is ensuring that none of our young people are left on their own!

László ANDOR

European Commissioner responsible for Employment, Social Affairs and Inclusion

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