Just one more extra post related to the Youth Unemployment summit post of yesterday. For anyone wondering what EU countries had been doing to boost employment before the summit, I came across this article from The Guardian that explains each country’s initiatives and policy changes quite nicely. It also illustrates the problem I see with all the governments pushing their own specific plans. Sure, things have to be tailored to the specific situation of each country, but perhaps there could be a little more coordination here?
France: A subsidized program called Jobs For the Future was created. Low-skilled people between 16 and 25 from areas badly hit by unemployment will be placed in 3-year contract jobs in the public and non-commercial sector. The government will pay 75% of their wages. It’ll be interesting to see if those employees are retained afterwards and if their skills are transferrable. Seems strange for the government to pay you to work in another company, but that’s the way it works in Europe!
Spain: Instead of targeting youth unemployment specifically (though it has the highest figures on that count) the government has tacked to helping companies do business with less restrictions, which is intended to stimulate the labor market. To this end, it has dismantled some “worker protections” to help allow companies to fire and hire with less difficulties, and it also plans to allow small companies to defer VAT payments and tap government credit lines to create jobs. This seems like the kind of (admittedly sometimes painful) changes needed throughout the Eurozone as a whole, but dismantling labor protection can’t be taken too far yet or it’ll risk a backlash. Also, with such high youth unemployment rates, couldn’t they spare a bit to invest in something proactive, like employer-training programs for those who have been struggling or a startup fund?
Italy: According to the article, it seems that Italy is mainly throwing money at the problem. A €1.5bn package will give tax breaks to employers who hire under-30s and “included measures to stimulate training, apprenticeship and internship schemes” mainly in the South. Sounds awfully vague to me. Who is going to keep track of all that money exactly? We all know where the money sent to combat issues in the South ended up in the past…
Germany: Oh shining Germany – they’re doing just fine on the youth unemployment front for now, thank you very much, but hey, they’ll lend everyone else a helping hand with another summit!
EU: The EU will throw more money to the struggling countries with some vague directions, and “the European Investment Bank will borrow on the markets to increase lending to small businesses in an attempt to bypass the credit crunch and encourage the hiring of school-leavers.”