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European Commission

László ANDOR

European Commissioner responsible for Employment, Social Affairs and Inclusion

Statement on the 2013 Annual Growth Survey on the joint employment report

Press Conference / Brussels,

28 November 2012

Ladies and Gentlemen,

Unfortunately in the past year, the employment crisis in Europe has deepened and the outlook has further worsened.

Every month of 2012 we have seen increases in the number of unemployed people, and today we are at about 26 million. The differences between Member States are growing. Unemployment in Austria is at 4.4%, while in Spain it's nearly 26%.

The high unemployment situation only partly originates in the functioning of the labour market. Some structural problems are well known, like segmentation of the labour market between very different types of work contracts, or the weak links between the worlds of education and work, or the lack of investment in re-skilling for adult workers.

But most of Europe's unemployment problem is the result of low aggregate demand. There is a lack of investor and consumer confidence due to the Euro zone crisis, a lack of growth-enhancing investment and poor business environment in many countries.

Tackling unemployment and the social consequences of the crisis obviously remains a priority in the Annual Growth Survey, and the Commission provides detailed guidance to Member States, building also on the Employment Package of last April:

Firstly, we need to boost job creation and the demand for labour. Taxation on labour is still too high, especially on low-paid workers, and we need greater shift to other sources of taxation, such as pollution or property. More also needs to be done to exploit the job creating potential of the Single Market and of rising sectors such as the green economy, ICT, health and care.

Secondly, we need to increase the resilience of the labour markets, their capacity to maintain employment and to respond to the adjustment needs of the economy. This can be done through balanced labour market reforms and social dialogue that increase the internal flexibility within companies to avoid that "firing workers" is the first answer to difficulties. This must come with investment in adaptation and re-skilling. Also we need to simplify employment legislation to reduce the gap between employment protection in temporary and permanent contracts.

Thirdly, youth unemployment and transition from school to work remain a huge problem. Almost one in five young jobseekers cannot find work and 1 in 7 young people are neither employed in education nor training. Combining work and training opportunities, for example through apprenticeships, is essential. Next week we will present a Youth Employment Package, with a proposal for the deployment of comprehensive Youth Guarantees and for improving the quality of apprenticeships and traineeships contracts.

Fourth, we need to fight long-term unemployment. Out of the 26 million unemployed people in the EU, 11 million have been unemployed for more than a year. We must strengthen investment in employment services and active labour market policies. And these measures must become stronger, with targeted hiring subsidies, individual job-seeking support, and training and retraining, if possible combined with work experience.

Finally, we need to boost social investment and improve social protection. The stabilising effect on the income of people of safety nets has been weakened throughout the crisis and poverty increased and deepened in many Member States.

Implementation of active inclusion strategies combining activation, income support and enabling social services is crucial. Links between social assistance and activation should be reinforced. We need to prevent marginalisation and enable everyone to contribute to the economy. This is social investment, which is not easy given the need for continuous fiscal consolidation, but Europe needs social investment to prevent even larger economic and social costs from arising in the future.

To conclude, I want to emphasise that some countries have undertaken bold structural labour market reforms in response to the Country-Specific Recommendations, which I welcome.

But we need more action from governments and from the social partners to boost job creation, make labour markets more resilient to the prolonged crisis, and help the weakest members of our societies stand on their own feet.

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