EU seeks quick release of job boosting funds

AP News
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Posted: Oct 08, 2014 3:05 PM
EU seeks quick release of job boosting funds

MILAN (AP) — The leaders of Germany, France and Italy put their differences over fiscal discipline and austerity politics aside at an EU jobs summit Wednesday, pledging instead to focus energies on quickly allocating 6.4 billion euros ($7.6 billion) already earmarked to Europe's 5 million unemployed youths.

The jobs summit — the third high-level meeting to tackle the continent's employment crisis in less than 18 month — offered no new proposals or investments. It came amid growing popular disillusionment with official recipes to returning Europe to growth and putting back to work 25 million unemployed Europeans, a fifth of those under 25.

"This is the major challenge for Europe," French President Hollande told a closing news conference with German Chancellor Angela Merkel and host Italian Premier Matteo Renzi. "If we are not capable or offering hope to the next generation, people will turn their backs on Europe. We see the risk, we see the threat."

Hollande, who entered the meeting saying he and Renzi would push for an additional 14 billion euros in EU investments, emerged saying that could wait and that first the available funds must be exhausted.

Merkel — whose government opposes additional investment while current funds remain untapped — poured Hollande a glass of water, one of a series of friendly gestures among the leaders who have openly sparred about fiscal rigor but are seeking a united front to fight Europe's employment crisis.

The Italian, French and German leaders even shared a laugh while commenting on the 3-percent debt-to-GDP limit, which Germany enforces and France and Italy chafe at.

On the employment front, leaders put a priority on clearing obstacles to getting the funds already allocated into the economy. That includes simplifying procedures, shortening deadlines and improving exchanges among national employment agencies to share best practices.

Of the 6.4 billion euros available in 2014-15 to help get young jobless Europeans back into the workplace, European Commission President Jose Manuel Barroso said just 800 million euros, or about 12 percent, has been spent.

Only France and Italy, he said, have special programs dedicated to accessing the funds.

The so-called "Youth Guarantee" aims to get every young person into a job, internship or training within four months of becoming unemployed.

Italian economist Tito Boeri said leaders should instead recognize that the program has failed because there are no jobs to offer young people in the countries with the highest youth unemployment rates, like Greece, Spain and Italy, due to recession.

"We are not in an economic cycle where this can help," Boeri said, adding that the money often ends up in the pockets of intermediaries without helping those in need.

European countries have seen unemployment skyrocket, first fueled by the global recession and then by the continent's debt crisis. The jobless rate for the EU's 28 member countries is 11.5 percent. For young people in Europe, those aged between 15 and 24, the situation is much worse, at 23.3 percent.

Several thousand union activists protested outside the venue, scuffling briefly with riot police who held them back. The protesters demanded a stop to government spending austerity policies and called for reforms to encourage investment.

"The unemployment rate and the number of precarious jobs are only increasing," said Maurizio Landini, the head of the FIOM metalworkers' union.