“Lighting of the fire” – Fighting Youth Unemployment Eurostat Reuters
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There is a chance that Herman van Rompuy’s speechwriters spent their Christmas holidays digging deep into Irish cultural history. In his speech to the Irish Business and Employers Confederation last Wednesday in Dublin, the President quoted the famous Irish poet W.B Yeats for referring to education as “lighting of the fire”. 

Just the day before, last Tuesday, Eurostat published the newest unemployment rates, once again revealing unprecedented, record high youth unemployment, both in the EU27 and in the eurozone.

For the last year the eurozone has been doing poorer than the entire EU. A picture that does not seem to change as 23.7 percent of young people between 14 and 25 years of age are unemployed in EU27, while that goes for 24,4 percent in the eurozone.

The Irish Presidency has made it one of their key priorities to do something about the massive youth unemployment problem in Europe, caused by the crisis - hence Rompuy’s remark. In spite of the much worrying numbers, the Irish do not necessarily have to work very hard in this matter.

Lighting of the fire

Both the European Parliament and the Council have already for a while been asking the Commission to propose a so-called youth guarantee. And in early December, the Commission finally decided on the so-called Youth Employment Package. Just last week the final wording was published. It consists of four points of action:

- A youth guarantee securing everybody under the age of 25 a quality job offer, continued education or an apprenticeship or traineeship, within four months after leaving school or becoming unemployed.

- A so-called Quality Framework for Traineeships to enable young people to get high quality work experience under safe conditions.

- A European Alliance for Apprenticeships to improve the quality and supply of apprenticeships available across the Union.

- A transformation of the network of the European Employment Services, EURES, into a more flexible tool, to improve labour mobility for young people.

The youth guarantee, the most significant part of the package, was already up for debate in the Parliament at the plenary in Strasbourg on Monday evening, and support for the guarantee was expressed from all corners of the hemicycle. The guarantee should therefore be adopted without further ado, tomorrow.

The Irish Presidency has put the guarantee on the agenda for the Employment, Social Policy, Health and Consumer Affairs Council, EPSCO, Council meeting on 28th February. And last time the Member States debated the issue; wide support existed here as well, ending with a request for the guarantee to the Commission.

Since the guarantee was a Council and EP idea in the first place, anything but two quick nods of heads and recommendations to the Member States to implement the guarantee is therefore unlikely.

"High youth unemployment has dramatic consequences for our economies, our societies and above all for young people. This is why we have to invest in Europe's young people now," said European Commissioner for Employment, Social Affairs and Inclusion László Andor, when proposal of the package was adopted in the Commission in December.

Short-term expenses

Like anything else, such a youth guarantee does not come for free, and it implicates many different problems. It will cost the Member States money on their budgets, especially in countries where the number of unemployed youngsters (and people in general) is high.

These countries are typically the same countries that struggle most with the finances, and therefore it might seem a bit futile for countries like Greece or Spain to think about implementing a guarantee like this right now. Like MEP Csaba Ôry from the conservative EPP said on Monday evening’s debate:

“The situations in the Member States vary, and the type of youth unemployment varies, which means we need various different proposals. Neither the European Union, nor individual Member States can create jobs. We need a dynamic economy for that.”

MEP Nadja Hirsch from ALDE shared his concerns, but she took one step further and got more concrete:

“A youth guarantee cannot though be a job guarantee. The jobs themselves are created by the economy. We cannot do that on the basis of some EU programme,” she stated.

“But a youth guarantee can help people to find a job, to limit the problems they face, and to get rid of the deficits that they have as well. For example in Germany we introduced a youth programme to promote job mobility for unemployed young people. Those people who have no training, or have training, but no job, they come to Germany. And I think it would be very useful to combine initiatives from different Member States with a youth guarantee, which must and can be funded by the ESF, that is what the money is there for.”

Long-term gains

Thereby she closed in on how the youth guarantee could be funded. Commissioner Andor has opened up for the idea of spending cohesion funds and structural funds on the guarantee, especially the European Social Fund (ESF), when he first presented the package.

Unavoidably, such a guarantee will bring along fiscal costs in the short run for the Member States, but looking at the numbers, there should be long-term gains to harvest in the future.

The costs of NEETs (used acronym for "not in education, employment, or training") in terms of benefits paid out to unemployed young people, foregone earnings and taxes - are estimated to be equivalent of 1.21 percent of EU GDP, which makes up for an annual loss of 153 billion Euro for the Member States.

Under the auspices of the Parliament, it was the Green MEP and EMPL substitute Emilie Turunen, who took the initial initiative to ask the Commission for a proposal on a youth guarantee. Speaking about these numbers among other things Monday evening, in Strasbourg, she said:

“The situation for the youth in Europe is in every way serious. Nearly one in four young person is without a job and the economic and social prospects are, to put it gently, depressing. I think we politicians in Europe have to ask ourselves, if we are sacrificing an entire generation on the altar of the crisis. We need to ask ourselves if we are ready to take responsibility for the fact that the new generation, as the first since the beginning of the EU, will experience living standards and fewer opportunities in life than their parents.” Youth_unemployment_rate_2010.png

What the summit will bring

With the expected quick implementation of this youth guarantee the costs have, in general terms, therefore been accounted for in 2013. However, by spending the ESF on the youth guarantee, the commission, the council and the EP leave it up to the negotiations of the multiannual financial framework, MFF, on state and government heads’ level, to find the money for it from 2014 onwards.

It is still too early to say, where those negotiations will end, when the member state leaders have the MFF on the agenda of their February summit. But an early prediction says that even though France has a socialist leadership at the moment, President Francois Hollande will be hard to work with when it comes to moving funds from the cap to any of the structural or cohesion funds.

The question is: would a youth guarantee work? Most experts and politicians seem to agree that it would, if the right funding is found.  Added to that, is the fact that youth guarantees have already been implemented in Finland and Austria, and the results are reportedly topping all expectations.

Taking the new unemployment rates into consideration there is no doubt it is necessary, taking into account what Herman van Rompuy said in Dublin; “Europe's youth is Europe's future.” and “we simply cannot let that fire die out.”