Employment: Commission urges Member States to urgently implement Youth Guarantee to help young jobless

Now is the time for Member States to put in place the structural reforms and infrastructure to make the Youth Guarantee a reality as soon as possible. This was the message to Member States from European Commission President José Manuel Barroso and European Commissioner for Employment, Social Affairs and Inclusion László Andor to the high-level conference on youth unemployment hosted by French President Fançois Hollande in Paris on 12 November. They welcomed the fact that six Member States (Czech Republic, Croatia, Lithuania, Luxembourg, Poland and Slovakia) have already submitted their first draft implementation plans to the Commission for comments.

“Today’s youth employment summit, here, in Paris has increased the momentum for swift action by Member States. We all agree that the Youth Guarantee is the best way for Member States to help young people to get a job and to reduce the unacceptable levels of youth unemployment”, stated President Barroso. “Now we have to continue to work together to make it a reality”.

“We realise that it is a tough challenge to Member States to implement the structural reforms necessary to implement the Youth Guarantee”, added Commissioner Andor. “But without such a targeted investment in our human capital we risk a lost generation”.

What is the Youth Guarantee?

The Youth Guarantee seeks to ensure that Member States offer all young people up to age 25 a quality job, continued education, an apprenticeship or a traineeship within four months of leaving formal education or becoming unemployed. The Youth Guarantee is one of the most crucial and urgent structural reforms that Member States must introduce to address youth unemployment and to improve school to work transitions.

The logic of the Youth Guarantee is very simple – to ensure that young people are actively helped by public employment services to either find a job suited to their education, skills and experience or to acquire the education, skills and experience that employers are looking for and so are directly relevant to increasing their chances of finding a job in the future.

This approach is based partly on the very clear relationship between levels of educational attainment and youth unemployment:

Youth unemployment rate, by educational attainment, EU-27, 2000 – 2012

Source: Eurostat 2013

The Youth Guarantee is based on experience in Austria and Finland that show that investing in young people pays off. For example, the Finnish youth guarantee resulted in a reduction in unemployment amongst young people, with 83.5% successfully allocated a job, traineeship, apprenticeship or further education within three months of registering.

A Youth Guarantee Recommendation was formally adopted by the EU’s Council of Ministers on 22 April 2013 (see MEMO/13/152) on the basis of a proposal made by the Commission in December 2012 (see IP/12/1311 and MEMO/12/938) and was endorsed by the June 2013 European Council.

For many Member States, the implementation of the Youth Guarantee will require structural reforms. For example, public employment services must be able to ensure individual young people receive appropriate advice on job, education and training opportunities most relevant to their own situation. The Commission’s June 2013 proposal for a Decision to help public employment services to maximise their effectiveness through closer cooperation can play a useful role here (see IP/13/544).

Another area requiring structural reforms concerns vocational education and training systems, where Member States must ensure that they give young people the skills that employers are looking for. In this respect, dialogue between trade unions, employers’ organisations, educational establishments and public authorities on the structure and content of education and training courses can prove useful.

The Youth Guarantee does have a fiscal cost for Member States (the International Labour Organisation has estimated the cost of setting up Youth Guarantees in the eurozone at €21 billion per year). However, the costs of NOT acting are far higher. The European Foundation for Living and Working Conditions (Eurofound) has estimated the current economic loss in the EU of having 7.5 million young people out of work or education or training at over €150 billion every year (1.2% of EU GDP) in terms of benefits paid out and lost output.

This is in addition to the long-term costs of unemployment to the economy, to society and to the individuals concerned, such as increased risk of future unemployment and poverty.

The cost of doing nothing is therefore very high: the Youth Guarantee scheme is an investment. For the Commission, this is crucial expenditure for the EU to preserve its future growth potential. Significant EU financial support can help – most notably from the European Social Fund and in the context of the Youth Employment Initiative (see below). But to make the Youth Guarantee a reality, Member States also need to prioritise youth employment measures in their national budgets.

European Social Fund support for the Youth Guarantee

By far the most important source of EU money to support implementation of the Youth Guarantee and other measures to tackle youth unemployment is the European Social Fund (ESF) which should continue to be worth more than €10 billion every year in the 2014-20 period. It is important that Member States devote a significant proportion of their European Social Fund allocations for 2014-20 to implementing the Youth Guarantee.

Youth Employment Initiative support for the Youth Guarantee

To increase available EU financial support to the regions and individuals struggling most with youth unemployment and inactivity, the Council and the European Parliament agreed to create a dedicated Youth Employment Initiative (YEI). YEI support will concentrate on regions experiencing youth unemployment rates above 25% and on young people not in employment, education or training (NEETs). This will ensure that in parts of Europe where the challenges are most acute the level of support per young person is sufficient to make a real difference.

The YEI funding will comprise €3 billion from a specific new EU budget line dedicated to youth employment matched by at least €3 billion from the European Social Fund national allocations. This will amplify the support provided by the European Social Fund for the implementation of the Youth Guarantee by funding activities to directly help young people not in employment, education or training (NEETs) such as job provision, traineeships and apprenticeships, business start-up support, etc.

The Commission has proposed to frontload the €6 billion under the YEI so that all this money is committed in 2014 and 2015 rather than over the seven year period of the MFF. To ensure a quick start, Member States could exceptionally start implementing YEI-related measures already as of 1 September 2013 to be reimbursed ‘retroactively’ when the programmes are subsequently approved.

The YEI will exclusively target NEETs aged up to 25 years, and where the Member States consider relevant, also those aged up to 30 years. In this case however Member States will have to allocate additional ESF resources to these measures in order to avoid a drastic reduction of support per person (potentially down from €1356 to around €700 if all NEETs are included).

More generally, Member States will have to complement the YEI assistance with substantial additional ESF and national investments in structural reforms to modernise employment, social and education services for young persons, and by improving education access, quality and links to labour market demand. The YEI will be programmed as part of the ESF.

Youth Guarantee implementation – state of play

Austria

Youth unemployment rate (September 2013):8.7%

NEET rate (2012): 6.5%

Implementation Plan: In preparation but many relevant measures are already being applied. There is due to be a focus on early school leaving.

Youth Employment Initiative: not eligible

Belgium

Youth unemployment rate (September 2013): 24.0%

NEET rate (2012): 12.3%

Implementation Plan: In preparation, for submission December 2013. Belgium has appointed a single coordinating institution and is committed to implementing the Youth Guarantee. Four separate action plans at regional level will be coordinated by Synerjob (Public
Employment Service) for the final Implementation Plan.

Youth Employment Initiative: provisional allocation €39.64 million

Eligible YEI regions. Hainaut Province, Liège Province, Région de Bruxelles-Capitale

Bulgaria

Youth unemployment rate (September 2013): 28.3%

NEET rate (2012): 21.5%

Implementation Plan: In preparation, for submission end of December 2013. The national budget will be used to fund employment subsidies, job-search training and guidance. There will be a focus on short courses to get youth into jobs with immediate results. The Plan will also look into dual education systems in 2014 but needs to be adapted to the high proportion of SMEs in Bulgaria (around 90% of companies). ESF/YEI-funded scheme to be launched July 2014 after overall Youth Guarantee launch foreseen in January 2014.

Youth Employment Initiative: provisional allocation €51.56 million

Eligible YEI regions: Severen tsentralen, Severoiztochen, Severozapaden, Yugoiztochen, Yuzhen tsentralen

Cyprus

Youth unemployment rate (September 2013): 43.9%

NEET rate (2012): 16.0%

Implementation Plan: In preparation. Cyprus, with support from the International Labour Organisation, has worked on a Youth Employment Action Plan. Three thematic reviews are to be held with stakeholders in early November. There will be a focus on public employment service capacity building and vocational education and training reforms. Cyprus is looking to speed up Youth Guarantee implementation.

Youth Employment Initiative: provisional allocation €10.81 million

Eligible YEI regions: The whole of Cyprus

Czech Republic

Youth unemployment rate (September 2013): 18.8%

NEET rate (2012): 8.9%

Implementation Plan: First draft submitted October 2013 – final draft in preparation.

Youth Employment Initiative: provisional allocation €12.71 million

Eligible YEI regions: Severozápad

Germany

Youth unemployment rate (September 2013): 7.7%

NEET rate (2012): 7.7%

Implementation Plan: In preparation – for submission end of first quarter 2014. Many existing measures in Germany, notably concerning traineeships and apprenticeships, are relevant to implementation of the Youth Guarantee . Despite relatively low levels of youth unemployment, Germany intends to submit an ambitious implementation plan.

Youth Employment Initiative: not eligible

Denmark

Youth unemployment rate (September 2013): 13.5%

NEET rate (2012): 6.6%

Implementation Plan: In preparation – for submission first semester 2014.

Youth Employment Initiative: not eligible

Estonia

Youth unemployment rate (August 2013): 14.9%

NEET rate (2012): 12.5%

Implementation Plan: In preparation for submission by end of December 2013. Youth Guarantee and ESF measures are to be planned alongside one another

Youth Employment Initiative: not eligible

Greece

Youth unemployment rate (July 2013): 57.3%

NEET rate (2012): 20.3%

Implementation Plan: In preparation. Will focus on gap-filling and building bridges between existing policies, with a focus on NEETs. Additionally, there will be a Youth Voucher Scheme and restructuring of the public employment service.

Youth Employment Initiative: provisional allocation €160.24 million

Eligible YEI regions: Anatoliki Makedonia – Thraki, Attiki, Dytiki Ellada, Dytiki Makedonia, Ipeiros, Kentriki Makedonia, Kriti, Notio Aigaio, Peloponnisos, Sterea Ellada, Thessalia, Voreio Aigaio

Spain

Youth unemployment rate (September 2013): 56.5%

NEET rate (2012): 18.8%

Implementation Plan: In preparation – for submission by end of December 2013. Spain is committed to structural change and recognises the challenge, in particular for non-registered young people. There will be coordination between national and regional levels

Youth Employment Initiative: provisional allocation €881.44 million

Eligible YEI regions: All regions (Andalucía, Aragón, Canarias, Cantabria, Castilla y León, Castilla-La Mancha, Cataluña, Ciudad Autónoma de Ceuta, Ciudad Autónoma de Melilla, Comunidad de Madrid, Comunidad Foral de Navarra, Comunidad Valenciana, Extremadura, Galicia, Illes Balears, La Rioja, País Vasco, Principado de Asturias, Región de Murcia)

Finland

Youth unemployment rate (September 2013): 20.2%

NEET rate (2012): 8.6%

Implementation Plan: In preparation, although a comprehensive Youth Guarantee scheme is already in place. A Eurofound evaluation found that, in 2011, 83.5% of young job seekers received a successful offer of a job, traineeship, apprenticeship or further education within 3 months of registering as unemployed. The Finnish scheme has led to personalised plans for young people being drawn up more quickly, ultimately lowering unemployment.

Youth Employment Initiative: not eligible

France

Youth unemployment rate (September 2013): 26.1%

NEET rate (2012): 12.2%

Implementation Plan: France has developed “Garantie jeunes” pilots at local level. Youth Guarantee implementation plan is in preparation.

Youth Employment Initiative: provisional allocation €289.76 million

Eligble YEI regions: Aquitaine, Auvergne, Centre, Champagne-Ardenne, Haute-Normandie, Languedoc-Roussillon, Nord-Pas-de-Calais, Picardie, Mayotte, Guadeloupe, Guyane, Martinique, Réunion

Croatia

Youth unemployment rate (September 2013): 52.8%

NEET rate (2012): 16.7%

Implementation Plan: First draft submitted October 2013 – final draft in preparation. There is strong government support. The government is considering proposing a guarantee for all young people up to age 29, and offering them a good-quality offer within a period of 6 months. Croatia to establish lifelong guidance centres (linked to the public employment service but as a separate structure) as part of the Youth Guarantee reform.

Youth Employment Initiative: provisional allocation €61.82 million

Eligible YEI regions: Jadranska Hrvatska, Kontinentalna Hrvatska

Hungary

Youth unemployment rate (August 2013): 26.9%

NEET rate (2012): 14.7%

Implementation Plan: In preparation.

Youth Employment Initiative: provisional allocation €46.49 million.

Eligible YEI regions: Dél-Alföld, Dél-Dunántúl, Észak-Alföld, Észak-Magyarország

Ireland

Youth unemployment rate (September 2013): 28.0%

NEET rate (2012): 18.7%

Implementation Plan: In preparation for submission before end of 2013. Ireland has launched a high-profile Youth Guarantee pilot scheme under EPPA and is committed to a meaningful implementation of the Youth Guarantee. Will seek to increase impact of current schemes.

Youth Employment Initiative: provisional allocation €63.66 million.

Eligible YEI regions: Border, Midland and Western, Southern and Eastern.

Italy

Youth unemployment rate (September 2013): 40.4%

NEET rate (2012): 21.1%

Implementation Plan: In preparation. Italy is looking in particular at national co-ordination with a strong role for the regions.

Youth Employment Initiative: provisional allocation €530.18 million.

Eligible YEI regions: Abruzzo, Basilicata, Calabria, Campania, Emilia-Romagna, Friuli-Venezia Giulia, Lazio, Liguria, Lombardia, Marche, Molise, Piemonte, Puglia, Sardegna, Sicilia, Toscana, Umbria, Valle d Aosta/Vallée d Aoste

Lithuania

Youth unemployment rate (September 2013): 21.0%

NEET rate (2012): 11.1%

Implementation Plan: First draft submitted October 2013 – final plan in preparation. Lithuania will analyse weaknesses of existing schemes as well. There will be a focus on new partnerships across all policy sectors.

Youth Employment Initiative: provisional allocation €29.69 million

Eligible YEI regions: Lithuania

Luxembourg

Youth unemployment rate (September 2013): 18.8%

NEET rate (2012): 5.9%

Implementation Plan: substantial first draft submitted October 2013 – final plan in preparation.

Youth Employment Initiative: not eligible

Latvia

Youth unemployment rate (June 2013): 20.1%

NEET rate (2012): 14.9%

Implementation Plan: In preparation – for submission beginning of December 2013. Plan being prepared in collaboration with multiple partners with a long-term approach.

Youth Employment Initiative: provisional allocation €27.1 million

Eligible YEI regions: whole of Latvia.

Malta

Youth unemployment rate (September 2013): 13.2%

NEET rate (2012):
11.1%

Implementation Plan: In preparation. Malta is working on mainstream and targeted services and intends to launch Youth Guarantee in March 2014.

Youth Employment Initiative: not eligible

The Netherlands

Youth unemployment rate (September 2013): 11.7%

NEET rate (2012): 4.3%

Implementation Plan: In preparation – for submission in 2014.

Youth Employment Initiative: not eligible

Poland

Youth unemployment rate (September 2013): 26.3%

NEET rate (2012): 11.8%

Implementation Plan: First draft submitted October 2013 – final draft in preparation.

Youth Employment Initiative: provisional allocation €235.83 million

Eligible YEI regions: Dolnoslaskie, Kujawsko-Pomorskie, Lódzkie, Lubelskie, Lubuskie, Malopolskie, Podkarpackie, Swietokrzyskie, Warminsko-Mazurskie, Zachodniopomorskie

Portugal

Youth unemployment rate (September 2013): 36.9%

NEET rate (2012): 14.1%

Implementation Plan: In preparation – for submission end of December 2013. The Youth Guarantee will focus on preventing young people from becoming NEETs – priority on 15-24, but some measures to be extended up to 30. Partnership-building ongoing, and a new school monitoring system will help identify drop-outs. ‘Impulso Jovem’ will run alongside Youth Guarantee, targeting young unemployed people rather than NEETs. Portugal remains committed and advanced in the development of an implementation plan in collaboration with multiple partners.

Youth Employment Initiative: provisional allocation €150.2 million

Eligible YEI regions: Alentejo, Algarve, Centro (PT), Lisboa, Norte, Região Autónoma da Madeira, Região Autónoma dos Açores

Romania

Youth unemployment rate (June 2013): 23.2%

NEET rate (2012): 16.8%

Implementation Plan: In preparation. Romania will introduce a 6-month traineeship contract with the possibility for an open-ended contract.

Youth Employment Initiative: provisional allocation €99.02 million

Eligible YEI regions: Centru, Sud – Muntenia, Sud-Est

Sweden

Youth unemployment rate (September 2013): 22.8%

NEET rate (2012): 7.8%

Implementation Plan: In preparation – for submission end of December 2013. The plan will be closely linked to the Country Specific Recommendations.

Youth Employment Initiative: provisional allocation €41.26 million

Eligible YEI regions: Mellersta Norrland, Norra Mellansverige, Sydsverige

Slovenia

Youth unemployment rate (September 2013): 23.7%

NEET rate (2012): 9.3%

Implementation Plan: In preparation. Slovenia is not planning to follow the detailed Youth Guarantee implementation plan structure but is encouraged to do so.

Youth Employment Initiative: provisional allocation €8.61 million.

Eligible YEI regions: Vzhodna Slovenija

Slovakia

Youth unemployment rate (September 2013): 31.1%

NEET rate (2012): 13.8%

Implementation Plan: First draft submitted October 2013 – final plan in preparation. Slovakia’s plan should seek to prioritise the most marginalized young people – especially the Roma – as their targets for the Youth Guarantee due to high long-term youth unemployment. Partnerships between all relevant organisations will be necessary.

Youth Employment Initiative: provisional allocation €67.43 million.

Eligible YEI regions: Stredné Slovensko, Východné Slovensko, Západné Slovensko.

United Kingdom

Youth unemployment rate (July 2013): 20.9%

NEET rate (2012): 14.0%

Implementation Plan: UK has indicated it will not submit an Implementation Plan.

Youth Employment Initiative: provisional allocation €192.54 million

Eligible YEI regions: Inner London, Merseyside, South Western Scotland, Tees Valley and Durham, West Midlands