EU to spend €6 billion on youth employment and training futile schemes

José Manuel Barroso, President of the European Commission and Herman Van Ropmuy, President of the European Council (from left to right), going to deliver a Press conference after the European Council. (Council of the European Union Audiovisual Services 27/06/2013).

Yesterday the European Sting observed that the European Council of 27-28 June had no purpose. The truth is that the two crucial issues which haunted all the EU institutions for months were solved elsewhere. Firstly, the agreement on the draft directive for bank resolution and recovery was struck at the Ecofin council during the first hours of Thursday, and secondly, the political consensus on the EU budgets for the next seven years was concluded at the Commission’s headquarters in the Berlaymont building. What the 27+1 EU leaders did this week was to tell us they will spend some more money on youth employment schemes. They also welcomed Croatia to the EU as a full member from 1 July, but this was just a procedural affair, not a real issue.

Youth unemployment

A large part of the Press release issued after the European Council was devoted to youth unemployment. In most of it the leaders just repeated the dreadful statistics on this burning socioeconomic problem. We were informed once more that 23.5% of the European youths under the age of 25 are unemployed. Unfortunately this is not the most acute problem of EU’s labour market.

Unemployment torments also youths under 29 and in their case the absence of productive employment is even more unbearable. They are men and women without a job probably for years, not being able to start a family. On top of that in the south of Eurozone overall unemployment has reached unseen before levels. Greece, Spain, Italy and Portugal run the danger of losing one generation of workers. But the leaders had nothing to say about that.

Instead of dealing with the growth problem, our EU leaders just reminded us the Commission bureaucracy’s ideas about the unemployed youths. They agreed that “Under the Youth Guarantee scheme, the member states committed to ensure that within four months of becoming unemployed or leaving formal education all young people up to the age of 25 receive a high-quality offer of a job, an apprenticeship or a traineeship. The EU will help the member states to fund the Youth Guarantee schemes through the use of EU structural funds, notably the Youth Employment Initiative”.

The key in this decision is ‘traineeship’. Almost all EU countries have had negative experiences with ‘on the job training’. In most cases this is badly paid petty jobs in retailing shops. University graduates are offered almost invariably cleaning jobs without the right to deny them. It was revealing that a British Appeal Court outlawed a government programme falsely termed ‘on the job training’. Under this scheme university graduates were obliged to take up any job, termed as ‘on the job training’, without payment at all. This was conditional if the graduates wanted to keep receiving a small unemployment benefit. The programme was outlawed because it imposed unpaid labour that is real slavery.

This is not the exception. It’s the rule. Employment services’ bureaucrats all over the European Union know that very well. The EU leaders also agreed to “front-load the €6 billion that had been earmarked for the Initiative so that these funds are available in 2014-2016, i.e. during the first two years of the current Multiannual Financial Framework (MFF), instead of being spread over its entire seven-year duration”.

In reality all those funds constitute short-term unemployment benefits and subsidies to SMEs. Nothing to do with real jobs or enhancing prospects for real jobs. Unfortunately real jobs cannot be created like that. It takes strong growth rates to effectively reduce unemployment.