GO
Loading...

UPDATE 1-EU leaders promise jobs for "lost generation" of youth

Tuesday, 12 Nov 2013 | 2:57 PM ET

* France hosts more than 20 leaders for second EU jobs meet

States pledge to speed disbursement of youth job funds

* But no new money committed or policies unveiled

* Merkel sidesteps questions on German wages

By Leigh Thomas and Elizabeth Pineau

PARIS, Nov 12 (Reuters) - European leaders pledged on Tuesday to make fighting youth unemployment in the bloc a priority but came up with no new ideas to tackle a problem that risks fuelling social unrest and distrust of mainstream parties.

Nearly 6 million people under the age of 25 are without work in the European Union, with jobless rates among the young at close to 60 percent in Spain and Greece.

A July jobs summit in Berlin set out plans to devote at least 6 billion euros over the next two years to addressing the problem - a big headline figure that looks less impressive when spread among the many unemployment blackspots in the region.

Hosting a follow-up summit in Paris, French President Francois Hollande said any country that submitted a national plan to fight youth unemployment by year-end would immediately receive EU funds to implement their programme.

"It's crucial to act quickly," Hollande said. "We can't abandon a generation ... we need jobs and training that offer young people real prospects."

But with the leader of the euro zone's number two economy more unpopular than ever and bigger neighbour Germany still in political limbo following its election, conditions for advancing a potentially divisive debate could hardly be less favourable.

Though youth funds are to be rushed out, European leaders did not pledge additional money nor propose any new Europe-wide policy initiative to kick-start hiring of what EU Commission President Jose Manuel Barroso said was a "lost generation".

European Council President Herman Van Rompuy urged member states to pursue labour market reforms to spur hiring and said that he expected joblessness to diminish in the coming year.

"The economic recovery is taking shape. ... We can hope that in 14 months' time from now all the countries in the euro zone will have seen a positive trend on jobs," he said.

The leaders warned against blaming the European Union for joblessness because fuelling anger against Brussels would help far-right parties gaining ground in several member states.

Food sector workers joined by far-right groups who blame Europe for destroying jobs have led violent protests this month in western France, while Greece is cracking down on the anti-EU Golden Dawn party following a series of violent incidents.

"We must show that Europe is part of the solution, not the problem," Barroso said. "It's not Europe that created the problem - it is divergence in policies that created the problem."

"FRAMEWORK FOR GROWTH"

Failure by governments around the bloc to make a dent on unemployment queues are seen by some analysts as driving voters into the arms of anti-EU parties such as France's National Front in May 2014's European Parliament elections.

German Chancellor Angela Merkel said growth was needed to create new jobs, but sidestepped questions about low wages in Germany penalising the job markets of neighbouring states.

Her country has come under pressure from European partners and the United States to do more to spur domestic demand, with many countries arguing that its reliance on exports is hurting Europe's economic stability and the global economy.

In a rare move to shine a critical spotlight on the policies of the larger German economy, the European Commission will decide this week whether to scrutinise Berlin's record surplus for economic imbalances.

"We the member states will do all we can to create a framework for growth because without growth there will be no new jobs," said Merkel, without elaborating.

Germany has so far brushed off the criticism, arguing it has more than halved its current account surplus with the euro zone as a share of gross domestic product since 2007.

Whether to introduce a minimum wage is one of the key sticking points in Merkel's talks to form a grand coalition with left-of-centre Social Democrats who say the measure is a precondition for them entering government.