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EU loses €150 bln a year on youth unemployment, Andor says

EU

Every year €150 billion is lost on young people not in education, employment or training in the European Union, said László Andor, EU Commissioner responsible for employment, social affairs and inclusion said on a conference organized by Joint Venture Association Thursday. 

The economical crisis followed a much worse trajectory than previously predicted by the European Union, mainly due to the financial crisis of the eurozone.

According to the latest figures of the European Commission, Hungary's gros domestic product (GDP) fell 1.2% in 2012, will expand by 0.3% in 2013 and 1.3% in 2014. While the economists in Brussels forecast a more dynamic period for the EU from H2 2013, some southern countries of the eurozone will spend this year still in recession, Andor said.

The crisis of the eurozone caused very serious problems in the region, resulting a much worse unemployment rate than in the European Union as a whole, the US or Japan, he added.

The situation of unemployment is critical amongst younger generation, however, there are significant differences between leading countries like the Netherlands, Germany or Austria and the southern eurozone members like Italy, Spain or Greece, Andor pointed out.

The situation is further exarberated by the fact that, rate of long-term unemployment (12 months or more) is increasing around the member states and in some countries exceeding 50% of all the unemployed. If the problems of long-term unemployment are not cured in short term, the probability of falling behind for these families are increasing rapidly, leading to social problems or even social crisis in the most affected southern countries, the commissioner pointed out.

Young people not in education, employment or training (NEET) affecting much bigger problems around the Union, that one might think, Andor said. Due to them, 1-2% of the overall GDP potential of the EU is lost, resulting around €150 billion of income loss.

In the framework of the EU's employment program ambitious targets have been set: to raise the employment rate from the present 68-69% to 75% and to decrease the number of unemployed by 20 million. In order to reach the targets, the EU created a seven-point action plan. According to Andor, the steps are as follows:

- youth garantie program to ensure some kind of employment or education for long-term unemployed youngs under 25
- accelerating labor demand
- increase mobility
- increase employment security for sensitive social groups like women or over 55.
- reorganization of companies spur up employment
- ensure the social economy, increase the number of social enterprises, entrepreneurs
- social investments

The cohesion funds for poorer member states focused often on infrastructure - not without a cause -, however from now on most focus on real economic investments and developments, Andor added.

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