The 28 EU leaders care more about fiscal orthodoxy than effectively fighting youth unemployment

Iliana Ivanova (on the right), the ECA member responsible for auditing of the Youth Guarantee project and the drafting of the report entitled “Young and unemployed in Europe: obstacles ahead for the EU's Youth Guarantee”. (ECA Audiovisual Services, Copyright: EU)

Iliana Ivanova (on the right), the ECA member responsible for auditing of the Youth Guarantee project and the drafting of the report entitled “Young and unemployed in Europe: obstacles ahead for the EU’s Youth Guarantee”. (ECA Audiovisual Services, Copyright: EU)

Last week the European Court of Auditors (ECA) published a report on the “risks to the successful implementation of the EU Youth Guarantee”. The ECA review, while noting that according to the Commission the available funding for this much advertised EU project is estimated at €16.7 billion for the 2014-2020 period including national resources, it also observes that as specified by the “International Labour Organization, the cost of implementing the scheme could potentially reach €21bn per annum”. (ECA, Press Release Luxembourg, 24 March 2015. The full report is available at http://www.eca.europa.eu ).

What is the Youth Guarantee?

The “Youth Guarantee” project was adopted by the European Council of the 28 EU leaders in July 2013. From the very beginning it was poorly financed with €6bn in EU resources for a seven years period (2014-2020) for a scheme aimed at making sure that within four months, all youths in the EU under the age of 25 after leaving formal education get an offer of a job, an apprenticeship or a traineeship. According to what the 28 leaders advertised at the time, the job offered had to be of “good quality” suited to their education, skills and experience. Alternatively the youth was supposed to be offered the chance to acquire the skills and experience required to find a job of “good quality” in the future through an apprenticeship, a traineeship or continued education.

The above mentioned ECA’s reference to the massive discrepancy between the available resources as designed by the EU and the potential cost for the full implementation of the project as calculated by the ILO, decries the chasm between targets and means of the entire scheme. In this way the ECA without expressly blasting this EU program, exposes the ineffectiveness of it. By the same token, the ECA in an indirect manner reveals the senselessness of the relevant decision of the 28 EU leaders.

Still without a job

According to the latest Eurostat (the EU statistical service) estimates almost 5 million youths (under the age of 25) were unemployed in the EU-28 area in June 2014, of whom over 3.3 million in the euro area. This means that the youth unemployment rate in the EU is 22% or more than one in five young EU citizens cannot find a job; in Greece and Spain it is one in two. The ECA audit estimates also that “there is a gap of nearly 50 percentage points between the Member State with the lowest rate of youth unemployment (Germany at 7.8 % in June 2014) and the one with the highest rate (Spain at 53.4 % in June 2014)”.

The scheme is co-financed by the EU and the national budgets. The public funding can be supplemented by private funds (e.g. by investments from companies in apprenticeship schemes or training schemes financed by private foundations). In April 2014 one year after implementation, the scheme was still not working. At that time the European Economic and Social Committee issued a Press release saying the “Commission and the Council … opted to link this program to a fund supporting structural measures (Structural Funds) but lost sight of the main objective – to offer a tool for emergency action”.

Caught in a Catch-22

What the EESC says here is that the project was undermined by the EU bureaucracy and the fiscal restraints in the countries which needed it most. Greece, Italy, Spain, Portugal and Ireland couldn’t develop the project, because the support from the EU Structural Funds is accorded under lengthy procedures and only if the member state spends an equal amount of money. The countries which needed the project most couldn’t spend more money on it, because they still are under a regime of strict fiscal restrictions imposed by the EU. Consequently the scheme worked only in a few member states the ones that needed it the least, like Austria and Finland.

Coming back to the ECA report, two years after the introduction of the ‘Youth Guarantee’ project, Iliana Ivanova, the Court’s member responsible for auditing it commented last week that, “We have identified as potential risks the adequacy of the scheme’s funding, the ‘good quality’ nature of the offer it proposes to young jobless people and the way in which the Commission monitors and reports on the results of the scheme. Addressing these risks early is key for the effectiveness of the Youth Guarantee.” Unfortunately it’s already rather too late to save the program, especially after ILO’s estimate that the cost of fully implementing “the scheme could potentially reach €21 billion per annum”.

No jobs, education or training for 7.5 million youths

The ‘Youth Guarantee’ scheme aims at helping some 7.5 million young Europeans in total who are not in employment, education or training. Until this very day all those people are still without a job, further education or training. The ECA auditors note that the socio-economic costs of this reality “through unemployment benefits and foregone earnings and taxes… according to EU Agency Eurofound estimates, amount to €153 billion a year – over 1 % of EU GDP”. Still the mainstream economic policies in Eurozone favor balanced or surplus government budgets which abridge EU spending, by cutting down social expenditure.

Now, almost two years after July 2013 when the 28 EU leaders introduced the ‘Youth Guarantee’ program it is pretty clear that they didn’t mean to really proclaim war against youth unemployment but rather just to be seen as doing so.

 

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

Stopping antimicrobial resistance would cost just USD 2 per person a year

New chapters in EU-China trade disputes

3 ways to fix the way we fund humanitarian relief

Draghi’s 2018 compromise: enough money printing to revive inflation and check euro ascent

‘We are nowhere closer’ to Israeli-Palestinian peace deal, than a year ago, Security Council hears

G20 LIVE: G20 Antalya Summit in Numbers, 15-16 November 2015

Fashion has a huge waste problem. Here’s how it can change

The way to entrepreneurship in the developing world

10 cities are predicted to gain megacity status by 2030

MWC 2016 LIVE: Getty chief says one in four new images from phones

‘Open, cordial, and frank discussions’ held over future Somalia-UN relationship

EU Ombudsman investigates the European Commission

ECB money bonanza not enough to revive euro area, Germany longs to rule with stagnation

How ‘small’ is Europe in Big Data?

As the Universal Declaration of Human Rights turns 70 – is it time for a new approach?

China will be the world’s top tourist destination by 2030

UN chief hears ‘heartbreaking accounts’ of suffering from Rohingya refugees in Bangladesh; urges international community to ‘step up support’

The EU Parliament slams Commission on economic governance

A day in the life of a Rohingya refugee

What the global Internet’s stakeholders can learn from Europe’s new data law

The US is withdrawing from a 144-year-old treaty. Here’s the context

A Sting Exclusive: “The competitiveness of Europe depends on a digital single market”, EPP President Joseph Daul highlights live from European Business Summit 2015

Eurozone dignitaries play with people’s life savings

Tackling water scarcity: 4 ways to pull H20 out of thin air

WHO and IFMSA as transcendent pillars for world improvement

Managers’ pay under fire

Europe’s far-right launches attacks on neighboring nations

Here are 5 of the biggest threats to our oceans, and how we can solve them

New phenomena in the EU labour market

This 12-year-old built an underwater robot to fight plastic pollution

Two States ‘side-by-side’ is the ‘peaceful and just solution’ for Israel-Palestine conflict: Guterres

Imported and EU fisheries products should be treated equally

FROM THE FIELD: Persons with disabilities bike towards sustainability

Rights defenders jailed in Bahrain and UAE should be released unconditionally, UN urges

ECB again to subsidize euro area banks with more than one trillion euro

Technology is a force for peace and prosperity. Don’t let its challenges obscure this

168 hours left for MEPs – ECOFIN Council to deliver a Banking Union

Banks promise easing of credit conditions in support of the real economy

Use “blockchain” model to cut small firms’ costs and empower citizens, urge MEPs

Climate change will force us to redefine economic growth

Human rights champions from across the world receive top UN prize

UN refugee agency ‘deeply shocked’ at stabbing death of ‘deeply courageous’ Polish mayor

Davos participants call for digital trade deal

Violence against women a ‘mark of shame’ on our societies, says UN chief on World Day

ECB will be the catalyst of Eurozone’s reunification

Member States and Commission to work together to boost artificial intelligence “made in Europe”

Cameron postpones speech in Holland

How the gender commuting gap could be harming women’s careers

Syrians ‘exposed to brutality every day’ as thousands continue fleeing ISIL’s last stand

ECB: Reaching the limits of its mandate to revive the Eurozone economy

How blockchain can cut the cost of new medicine

Security Council should ‘nurture’ Colombian consensus against return to violence, top UN official urges

Donald Trump’s victory is a great opening for global EU leadership on the sustainability agenda

Clean energy will do to gas what gas has done to coal

Guatemala Dos Erres massacre conviction welcomed by UN human rights office

Can free trade deliver cheaper renewable energy? Ask Mexico

The costs of corruption: values, economic development under assault, trillions lost, says Guterres

EU to finance new investment projects with extra borrowing; French and Italian deficits to be tolerated

How blockchain can manage the future electricity grid

Eritrea sanctions lifted amid growing rapprochement with Ethiopia: Security Council

Spirit unlimited

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s