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Why 2018 is key to the EU’s Youth Guarantee

Why 2018 is key to the EU’s Youth Guarantee 17 février, 2018

If 2018 is officially the European Year of Cultural Heritage according to the European Commission, it should also be the Year of Youth. Unemployment for people younger than 25 years old remains high.

The youth needs to be empowered for the future, and this implies making sure young people don’t fall into a never-ending series of job-looking search or unpaid internships and precarious jobs after they have finished their scholarship. To tackle this issue, the European Commission has set up the Youth Guarantee in 2013 in order to get young people back on their feet and stay out-of-work less long. What are the strengths and weaknesses of this Youth Guarantee, and how could 2018 be a key year to improve it? Find out more below.

How does the Youth Guarantee work?

The Youth Guarantee is a Council recommendation that aims at ensuring that all “young people under the age of 25 years receive a good quality offer of employment, continued education, apprenticeship or traineeship within a period of four months of becoming unemployed or leaving formal education” (Council, 2013). Since it is a recommendation, it is not legally binding. The Youth Guarantee also contributes to three of the ‘Europe 2020’ strategy targets, namely the increase in employment, the decrease in early school leavers, and the fight against poverty and social exclusion. The Youth Guarantee costs €21 billion a year and is funded at the European level, primarily by the Youth Employment Initiative – which is for the regions where youth unemployment is above 25% -, and by the European Social Fund, for a total of €12,7 billion for the 2014-2020 budget (Barbière, 2014). It is an example of informal europeanisation: non-mandatory decisions are taken at the EU level, the funding at both the EU and national levels, and the implementation at the national and regional/local levels. The EU hopes that this initiative will help foster national reforms, diffuse informal rules and strategies, as well as having more policy harmonisation in the EU. The Guarantee is meant to help, not to replace, national social policies and instruments.

Assessment of the Youth Guarantee

If we simply look at a graph showing unemployment figures in the EU over time, one can directly notice that starting from 2013, when the Youth Guarantee was created, the youth unemployment rate was at at an all time high of 24%, and then has kept decreasing annually, down to almost 16% in December 2017, 18% for in the Euro area (Eurostat, 2017). Nonetheless, is it really thanks to the Youth Guarantee, or simply just because of the economic cyclical context? Or both? According to the European Commission, the Youth Guarantee has been quite effective in decreasing the youth unemployment rate, by facilitating “structural reforms and innovation in policy design” across EU Member States (European Commission, 2016). The Guarantee did help transferring some of the best European models, for example in school-to-work transition (mainly from Finland or Norway) to other EU Member States (Andor, 2016). For instance, this led to a recent positive  shake-up of the traineeship program in Spain.

But on the other hand, critics almost unanimously agree that the Youth Guarantee has had disappointing results. Although the Youth Guarantee may have accelerated the process of increased employment, almost 6 million young people in working age remain without any jobs, and according to scholars, most of the drop in youth unemployment, and unemployment in general, is caused by the independent cyclical recovery of the economy (Barslund and Gros, 2017). Furthermore, the EU Court of Auditor itself stated in a special report last year that the Guarantee had a limited and slow impact and failed to meet the initial predictions (European Court of Auditors, 2017). The person in charge of the report, Iliana Ivanova criticized that “policymakers should ensure that programs designed to help young people do not raise expectations which cannot be fulfilled” (ZAVRŠNIK, 2017). Finally, some EU Member States seem to have been short in their commitment in implementing some new reforms or listening to EU’s recommendations, such as Romania or Czechia.

2018, a pivotal year

According to Luis Alvarado Martinez, President of the European Youth Forum, young Europeans are “the generation who has had to bear the highest cost of the economic crisis and the group in society most at risk of poverty and social exclusion”(Martinez, 2018). The future of the European society should be based on sustainable living, quality jobs, and equality of opportunity for all. For this, we would need to invest in youth. The time is now.

Following a 2017 EU survey, 31% of EU population cited “combating youth unemployment” as what should be a top priority for the European Parliament (European Parliament). Moreover, according to a new World Economic Forum survey, entrepreneurship and youth empowerment should be the top priorities of European millennials (WEF, 2017). This is only possible by decreasing youth joblessness and by investing in youth. Not doing what is needed, some scholars say, could lead to a “lost generation incapable of catching up later in life” (Cahuc et al., 2013). It’s not yet the case today: macroeconomic aggregate data shows that there are still no lost generation (Barslund and Gros, ibid), but we must act quickly if we want to keep it that way. In addition to this, there is a link between youth unemployment and the increase of euroscepticism in those young people (Ellinger, 2015). The EU certainly doesn’t need any more euroscepticism this year.

2018 is also key, because it is this year, in May, that the Multiannual Financial Framework (MFF) will be released. It will directly impact the entire budget of the EU from 2020 to 2027. During the last years, the budget of the EU kept rising. It is therefore a good opportunity for the EU Member States to focus on youth and increase the maximum budget of the Youth Employment Initiative, the ESF, and other social funds. It is their opportunity to invest more in youth.

However, with Brexit, the budget could actually shrink in this field, and not increase. But we know from Commissioner Oettinger that Member States will prioritise education and that there won’t be any cuts in the Erasmus+ program so that’s a good sign for youth at least (Valero, 2018).

This is why, in addition to the new funds at disposal through the next MFF, the Youth Guarantee should also be improved. This can be done in several ways, such as giving the strategy a more prominent place in the European semester (Küchel, 2018), or to have the Guarantee acquire real working schemes and methods. Another solution would be to increase Member States compliance by having the Commission review and monitor annually the progress, following by a naming and shaming of the “bad” countries. Finally, for youth unemployment in general, a good multidimensional macroeconomic policies or a reform of the EMU would be necessary (Andor, ibid.); the Youth Guarantee is not a substitute to difficult reforms, it is just a non-binding instrument which probably alleviates Member States’ lack of willingness to integrate further in social policies.

Conclusion

With the youth unemployment rate remaining above 30% in many European countries still today, we can see that the impacts of the financial crisis are still present. This could induce more euroscepticism in teens. Young people want more empowerment and finding good jobs faster. To tackle this problem, the Youth Guarantee that we have aforementioned seen is part of the solution. It won’t fix the situation of course, but it can help, and hence the Youth Guarantee should be enhanced. More funds, more monitoring and more internal ambitious-but-realistic strategies are needed. 2018 can make this happen. We rarely needed it this much. The future of Europe’s economy will be in the hands of the now-young population. Which kind of future? This depends on young people finding, or making, jobs. This depends on investing in youth.

Robin Vanholme is a Master student at the Institute for European Studies (ULB)

Sources:

    • ANDOR, László, “Youth Guarantee Four Years After, EU youth employment initiatives and their evaluation”, European Economic and Social Committee, 14 December 2016, p.2.
    • BARBIERE, Cécile, “EU’s ‘Youth Guarantee’ scheme slacking”, Euractiv, 23 May 2014, www.euractiv.com/section/social-europe-jobs/news/eu-s-youth-guarantee-sceme-slacking
    • BARSLUND, Mikkel and GROS, Daniel, “Declining Youth Unemployment in Europe: The Effect of the Business Cycle or the European Youth Guarantee?”, CESifo Forum, vol. 18, n°2, June 2017, pp. 39-45.
  • CAHUC, P., CARCILLO, S., Rinne, U., and ZIMMERMANN, K.F., “Youth Unemployment in Old Europe: The Polar Cases of France and Germany”, IZA Journal of European Labor Studies, 2013, pp. 2-18.
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