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Will the old continent lose its youth?[

18.6.2013

Young Europeans entering the labour market today have a much harder time than their parents or grandparents. In Greece and Spain where the crisis has cut the jobs the most, there are now more unemployed young people than employed. This casts a dark shadow on the whole society, hope is scarce. Desperation is becoming a norm, writes MEP Tarja Cronberg.

Tarja Cronberg is a Finnish MEP for the Greens in the European Parliament.

The austerity hard-liners have softened their opinions while the unemployment figures have skyrocketed. We seek growth, but the economy needs a giant jump-start for new jobs to be created. This is a challenge that will define the future of the 'forgotten' generation.

The EU now has a youth guarantee scheme that obliges all member states to offer job, education or internship for all unemployed people under 25. This is an important step to acknowledge the right of employment for young people, and to push EU states into action but one has to remember that the scheme does not offer a magic sword to create jobs in the hardest hit countries.

The budget of €6 billion for the EU multiannual financial framework is in any case insufficient; the International Labour Organization (ILO) has estimated that further 15 billion is needed. To get the best out of this 6 billion budget would be to use it as a whole already during the first years of this budget term. The main task should be left to member states.

The urgently needed resources cannot be found in the crisis countries. More and more jobs are cut every day, so are the social security and education systems. Salaries are also being cut even when one-breadwinner families are getting more common and working people are helping their parents and siblings to cope.

Therefore, an extra EU-wide one year relief plan for crisis countries is urgently needed. This should include strong mobility emphasis, along with a sturdy tool box enforcing apprenticeships, internships, education and job creation. The relief plan should target at all EU countries with more than 25 % youth unemployment.

Youth unemployment has already had, in addition to growing poverty, other direct effects: many have been forced to move abroad in order to make ends meet. Germany, Holland and the Nordic countries have been attractive, at least for now, but Portuguese youths are also moving to old the colonies of Brazil and Mozambique. From Spain, a growing number of young workers is heading to Latin America. The old continent is in danger of becoming even older while youth is escaping or left home without any hope.

Mobility inside the EU can be one of the few solutions available for EU businesses and jobseekers. The German government has launched bilateral mobility programmes with Greece, Spain and Portugal. German companies employ jobseekers from the crisis countries via the scheme.

More mobility schemes and stronger financing are needed from the better-off member states; Austria, Netherlands and others must contribute. These countries can – in return - get highly qualified employees, of which there is and will be competition. Employees will get international work experience that is valued in their home countries and across the EU labour market.

Indeed, there is a huge 17-fold gap between the unemployment rates between German Bavaria and northern Greece. Germany's economy is doing well despite the crisis, partly because of its relaxing of labour market rules a few years back. Employment has become more attractive and easy for businesses and finding a job easier for everybody. Investment in the green economy and renewable energies is also paying off. This is a near-miracle achievement compared to expectations before the unification of East and West Germany.

In my home country, Finland, the unemployment rate is rising too. One in five under-25s is without a job or outside education but still employees are needed in certain areas. Mobility has helped the care sector already by enabling, for example, recruiting nurses from Spain.

There is a growing need in the health care sector and immigration is the only solution to make sure that ageing generations get the care they need. The language barrier can be overcome by intensive training offered by state and local authorities.

Jobs need investment. Small and medium sized enterprises employ 75% of euro area employees. If jobs are to be created, SMEs are in a key position. However, the investment channels - based heavily on the suffering banking system – have dried up for SMEs. The interest rates for companies tend to follow the rates paid by the host country. This makes the situation worse if not impossible for SMEs in the south to grow, and to employ. The Commission has addressed the role of SMEs but more concrete efforts need to be done on the EU level to open funding possibilities for SMEs.

The price of inaction is higher than finding the resources for jobs, education and internships. The non-integration of the youth now costs 1.2 % of EU GDP. The responsibility now lies heavily on the shoulders of the EU leaders meeting late June to discuss the implementation of the Youth Employment Initiative. If no extra funding is given to job creation, the initiative will not start a progress of recovery.

In these difficult times, one thing remains certain: the EU's future lies within how we deal with the youth unemployment crisis today.

Published in Euractiv.

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