European governments have failed to implement most of the reforms that could help bring down the EU's chronic unemployment problem and are doing less as the euro zone crisis ebbs, according to an EU document presented to finance ministers.
Despite the uncertainty surrounding Greece, the European economy looks to be growing again but policymakers worry that the region may be trapped in a period of low growth, unable to tackle the scourge of youth unemployment.
European finance ministers meeting in Riga were told that just a quarter of the reforms recommended by the European Commission, the EU executive, have been carried out and now that the crisis is easing, the pace of reform is slowing further.
"Implementation on the ground has been poor. About one fourth of recommendations has been followed by satisfactory implementation," said the document.
"In this context, the finding that the pace of reforms has slowed in a majority of EU economies in the past two years is hardly encouraging," said the document that formed the basis of a discussion among ministers at the meeting in Riga.
Malta was represented by Finance Minister Edward Scicluna.
Some 24 million people are out of work in the 28-member European Union, or around 10 per cent of the working population and double the jobless rate of the United States. A quarter of young people are out of work in Europe, with the number rising to more than half in Greece and Spain.
Governments say the harsh cuts in spending mandated by the European Commission at the height of the crisis are partly to blame, as countries put their finances in order after years of living beyond their means.
But the Commission and the International Monetary Fund say there are longer-term problems to tackle, such as too rigid labour laws, high labour costs and the mismatch between the jobs on offer and the skills people have.
At worst, Europe could face a spiral where an ageing, shrinking workforce struggles with high debt and unaffordable public spending, strangling the chances of competing with emerging economies such as China and India.
"A crisis offers window of opportunity for reforms as it makes the deficiencies of status quo apparent. Seven years down the road, this window may be closing," the document said.
It warned of a "viscous cycle" developing because people cannot find work, so they have less money to spend, which in turn hurts the demand for products that companies make.
Mario Draghi, the president of the European Central Bank who launched a US-style bond-buying plan last month to help the euro zone economy, has warned that monetary policy was only one part of a revival plan. He too wants to see more reforms.