The EU has set aside billions for the struggle against youth unemployment in the countries hit by the economic crisis. However, as long as the EU’s other policies hold back economic growth and destroy the structures for social partnership, the money is unlikely to have much impact.
Every European citizen under 25 who has left school or lost their job should get work or an offer of training within four months. The labour ministers from the member states of the EU decided this in 2013. They approved a budget of €6.4 billion for this “youth guarantee” on top of existing programmes and in addition to the already well financed European Social Fund. As a result, in the next few years, more than €90 billion is available to combat youth unemployment, says Gerhard Bosch director of the Institute for Work, Skills and Training. However, the problem is that these resources are hardly being used. Just €900 million of the €6.4 billion has been spent, and there are a number of reasons for that, according to Bosch.
The agencies dealing with unemployment in the crisis countries are overburdened, and therefore don’t get round to implementing new programmes.
The state can often no longer find partners for training and employment initiatives, because the policy for the crisis so far has been to weaken collective bargaining structures, along with unions, employers’ associations and other representative bodies like chambers of commerce or labour. In a fragmented economy there is no-one to talk to.
In many places there are plans to set to set up dual training systems, where studying at college is combined with working for an employer. But this can’t be done overnight, especially as the policies pursued by the Troika have made the situation worse rather than better. Such plans require the institutions and networks of social partnership between unions and employers to be developed not demolished, Bosch says.
In economies that are shrinking or at best barely growing, employers have little need for labour and a limited willingness to train people. As a result EU funds are most often used to finance wage subsidies, and it is extremely questionable, whether this creates additional jobs or training places.
Fundamentally, the difficulties younger workers face in the labour market cannot be separated from the rest of economic policy, Bosch says. “Even the best training system cannot protect young people against unemployment in the long term, if economic growth is weak or negative”. A study by the International Monetary Fund confirms this. It shows that 70% of the increase in unemployment in the countries hit by the crisis is a result of low economic growth. And low economic growth is caused by EU-prescribed austerity policies.
Gerhard Bosch: Jugendarbeitslosigkeit in Europa – warum versagen milliardenschwere Hilfsprogramme? (Youth unemployment in Europe – why are the multi-billion assistance programmes not working?), in: ifo Schnelldienst 17/2015