The Brussels bureaucracy blocks the Youth Guarantee scheme

European Economic and Social Committee. Public hearing on the implementation, at the national level, of EU policies for youth employment. The Labour Market Observatory of the Committee is carrying out an assessment of the policies put in place in Austria, Croatia, Finland, Greece, Italy and Slovakia to help young people find work. (EESC Audiovisual Services 1/4/2014).

European Economic and Social Committee. Public hearing on the implementation, at the national level, of EU policies for youth employment. The Labour Market Observatory of the Committee is carrying out an assessment of the policies put in place in Austria, Croatia, Finland, Greece, Italy and Slovakia to help young people find work. (EESC Audiovisual Services 1/4/2014).

The fate of the Youth Guarantee scheme, constituted to help the under 25s to get a job or a training within four months after leaving the education system, is very characteristic of the importance attached to labour matters by the European decision makers and the Brussels bureaucracy in particular. According to the European Economic and Social Committee, the two main EU decision-making bodies the “Commission and the Council wanted to avoid any ‘theatrical gestures’, they opted to link this program to a fund supporting structural measures but lost sight of the main objective – to offer a tool for emergency action”.

In short, the Commission and the Council imposed such cumbersome rules on the funding of the program as to have rendered it impossible. One year after the initial endorsement of the Youth Guarantee and still not one euro of EU money has been spent, to help the under 25s find a job or a traineeship. On the contrary, when the Eurozone banks needed trillions to avoid bankruptcy, the Commission and the Council were not afraid of ‘theatrical gestures’ and right away approved the huge subsidies in a matter of days, even within a weekend.

A ‘Catch – 22’ Guarantee

As the European Economic and Social Committee recently revealed, the funding of the national programs under the Youth Guarantee scheme has been placed under the procedures of the European Social Fund (ESF). However, under the ESF rules, the disbursement of funds is realized a long time after the actions under the various programs have been completed. In view of that, the member states have to finance those actions from their own money, which in most cases doesn’t exist. Understandably, the Youth Guarantee scheme is mostly needed in the worst hit countries of the south like Spain, Portugal, Italy and Greece. In their cases though, the Commission and the Council have set strict rules severely cutting down all public spending and also forbidding borrowing. As a result, the application of the Youth Guarantee scheme and its funding ends up in a ‘Catch – 22’ situation.

According to the EESC, “Several proposals have been put forward for solving this problem, but so far, sadly, none has been pursued. The European Council recently rejected the idea of leaving out amounts such as these, advanced by governments, when calculating the public deficit. The Member States thus failed to find agreement over this otherwise straightforward and sensible, but out of the box solution”.

Yet the banks get easy trillions

As noted above though, when it comes to subsidies of billions for the failing lenders, there is not the slightest legal or regulative impediment. Still to date, countries like Belgium, Greece, Spain, Ireland and Slovenia keep transferring hundreds of billions of borrowed money to their failing banks under instructions and commands from Brussels. Eurostat, the EU statistical service reported that:

*In 2011, Ireland was the country with the highest level of government expenditure (7.9 % in 2011 and 3.6 % in 2012), with the 2011 figure having been influenced by a series of capital injections treated as capital transfers to support financial institutions.
*In Belgium and Greece in 2012… This was due to capital transfers to support financial institutions recorded in ‘general economic affairs’ and ‘economic affairs’ respectively.
*The high overall expenditure in the economic affairs’ division in Spain in 2012 is also due to capital transfers to financial institutions.

In all those cases the Commission and the Council didn’t find the slightest ethical or legal objection to right away ‘allow’, if not compel, those countries to disburse hundreds of billions of government (borrowed) money, to failing lenders. This generosity should be compared with the ‘prudency’ in the case of the subsidies of some millions to help the under 25s find a job or a traineeship. The Commission and the Council are afraid of ‘theatrical gestures’ and played with the lives of the youths but had no objection to support fraudulent bankers.

The Commission still insists

It’s even more deplorable to read the Press release issued yesterday by the Commission, after a quite theatrical (without brackets) performance called conference which was unscrupulously named as “Youth Guarantee: Making it Happen conference calls on Member States to do more for delivery”. As if it’s the member states that have turned the Youth Guarantee into an unbelievable ‘Catch-22”.

Without any remorse the Press release begun “The European Commission, under the patronage of President Barroso, hosted a conference in Brussels yesterday on the implementation of the Youth Guarantee. A key message emerging throughout the event was that concerted effort is taking place in Europe to implement the Youth Guarantee in order to ensure that quality employment for young people is part of this economic recovery”.

If it was not for Henri Malosse, President of the EESC, the readers of the above mentioned Press release could have believed that it’s the member states to be blamed for the inaction to help the under 25s find a job. Malosse said, “Europe has no other alternative but to cast off the self-imposed administrative chains in which it has become entangled. I have met with students and young unemployed people in their own countries, in Hungary, Spain and Bulgaria and sensed the need for urgent action”.

Full disenchantment

Very probably, Malosse, after reading the Press release issued yesterday by the Commission, must have been quite disenchanted by the complete callousness of the Brussels bureaucracy. The last four lines of this release are adamant, that nothing will change in the procedure under which the funds for the Youth Guarantee are disbursed. The text goes “Finally, a look at the use of EU funding in support of the Youth Guarantee highlighted the importance of this financial support, alongside national funding. Croatia and Poland have already announced that they will take advantage of the possibility to claim reimbursement from the Youth Employment Initiative for actions that started as of 1st September 2013, and the Commission welcomes this news”.

After that, it’s quite clear that the Brussels bureaucracy remains impassive in front of the problems of those in need. The Commission tells Spain to do it like Croatia and Poland. However, the fact is that neither Poland nor Croatia was obliged to subsidize their banks with tens of billions of government money, which ended up in German and French mega-banks. Not to forget that the poor Irish, Greek, Spaniard and Portuguese taxpayers borrowed heavily in order to reimburse at par values the German and French mega banks, for their imprudent investments in real estate bubbles in those counties.

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