EU is committed to generate more jobs

An unusually cold spell gripping Europe may have deflected the people’s attention from their countries’ economic worries but, when the ice thaws, the underlying problems will resurface with a vengeance. One of the thorniest difficulties today is youth unemployment, a matter that is causing so much concern to governments in a number of countries as they grapple with the task of bringing down their deficits and national debts.

Only days after the International Labour Organisation presented a very gloomy picture of the unemployment situation in the world today, the European Union’s statistical agency, Eurostat, reported that unemployment in the eurozone hit a record 10.4 per cent in November and December. More than 16 million people were without jobs in the 17-nation monetary union, 20,000 more than a month earlier.

With more governments resorting to austerity programmes to check their financial deficits and national debts, the situation is triggering economic contraction as demand slows down in the wake of less disposal income. Hopefully, the lesson has now been learnt, particularly by those governments that disregarded the rules, landing their country in trouble and bringing about unnecessary hardship to their people.

At their last informal meeting in Brussels, the heads of government went beyond striking a deal on the fiscal compact. They discussed ways and means how they can promote new growth and jobs for young people. They then agreed that “growth and employment will only resume if we pursue a consistent and broad-based approach, combining a smart fiscal consolidation with investment in future growth, sound macroeconomic policies and an active employment strategy preserving social cohesion”.

These are big words that would need to be translated into action if they are to deliver the goods: growth and jobs. The document government leaders adopted builds first on the idea of a European guarantee for young people to help them find a quality job, further training or an apprenticeship or traineeship “within months” of leaving school. The European Commission said it had already made this proposal in 2010 in the Youth on the Move initiative but it had not been taken to its conclusion.

They have also agreed a set of urgent measures for the development of small businesses, in particular better mobilisation or even reprogramming of the structural funds and stronger support from the European Investment Bank.

In terms of unemployment, Malta is in a far better position than many other countries. Its unemployment rate is the fifth lowest in the eurozone. Even so, the country would have to see how it could ensure fresh growth to absorb new entrants in the labour market. This is not an easy task in the difficult financial circumstances Europe is passing through today.

In this country, the difficulty is even greater because the island needs to raise the female participation rate in the economy. Incentives aimed at encouraging women to take up employment are fine but there have to be jobs to go to first.

Insofar as young people are concerned, the plan is to utilise EU funds towards supporting youths to get to work or training. This is one practical step that could help bring about change. Another is a commitment to renew efforts aimed at improving the environment in which small- and medium-sized enterprises operate, particularly with regard to the reduction of unjustified administration and regulatory burdens.

However, as it has already been remarked, the biggest difficulty in all these plans lies in translating the commitments into action.