Speech: The Role of the Regions in the Implementation of the Youth Guarantee
European Commission - SPEECH/14/173 04/03/2014
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European Commissioner responsible for Employment, Social Affairs and Inclusion
The Role of the Regions in the Implementation of the Youth Guarantee
Kavala, 4 March 2014
Ladies and gentlemen,
I am grateful for the chance to address this gathering on behalf of the European Commission on a topic that is of great concern to us all.
Given the problems facing young people on the European labour market today, the Youth Guarantee may be a lifeline for a significant part of the young generation.
With over 5.5 million jobless young people across the EU in January 2014, of whom 3.5 million are in the euro area, the problem is acute — even though those figures are slightly down compared to 12 months ago.
Those figures also conceal great divergence across the Union, with youth unemployment rates ranging from 7.7% in Germany in January to 59.0% in Greece in November — a catastrophe in any terms.
Moreover, the problem is not just unemployment, but also withdrawal of young people from the labour market: over 14 million people in Europe aged up to 29 are neither in employment, education or training.
That is why fighting against unemployment among young people and against their social exclusion has been a top priority for the EU for a number of years.
EU leaders’ determination to tackle the challenge is clear from the Council’s prompt adoption of the Commission proposal for a Recommendation on establishing a Youth Guarantee, and from the follow up through several high-level events at the level of Heads of States and Government.
The Youth Guarantee Recommendation calls for the Member States to ensure that all young people under the age of 25 years receive a good-quality offer of employment, an apprenticeship or a traineeship or the chance to continue their education within four months of becoming unemployed or leaving formal education.
It stems from the realisation that unemployment at the very start of their careers does not only have immediate negative effects, but can leave a permanent scar on young people’s psychology, skills, abilities and economic prospects over their entire lifetime.
Youth unemployment or inactivity carry a higher risk of future unemployment, exclusion, poverty and health problems — all with potentially far-reaching effects.
That is why we consider the Youth Guarantee to be a crucially important structural reform when it comes to improving the functioning of our economies and labour markets.
It is about rolling out trainings, traineeships, apprenticeships, youth entrepreneurship support or entry-level jobs at a much larger scale than available so far.
It is also about improving the functioning of public employment services and vocational training systems.
The pre-requisite for all of this is to improve the way in which companies, schools, job centres, municipalities, social partners, youth organisations and other relevant bodies work together in order to support the transition of young people from school to employment.
Of course, the Youth Guarantee comes at a cost.
The ILO puts the total cost of establishing Youth Guarantee schemes in the euro area at 21 billion euros— that’s 0.22% of euro-area GDP.
But the cost of doing nothing would be far greater.
The European Foundation for the Improvement of Living and Working Conditions has estimated that if you add up the cost of benefits paid out to unemployed young people, and especially the earnings and taxes foregone, the economic costs of young people's disengagement from the labour market amounts to the equivalent of 1.21% of EU GDP.
That’s an annual loss of 153 billion euros to the EU as a whole (for the year 2011).
Clearly, the financial and social benefits of the Youth Guarantee can be huge compared to the investment required.
What is encouraging and important is that EU leaders have also put up money to match their words, by earmarking EU funding worth €6 billion for the cause. This is known as the Youth Employment Initiative and consists partly of new money and partly from resources of the European Social Fund.
So now it is time for action.
A lot of work has already been done, especially in the Member States whose regions are eligible for support under the Youth Employment Initiative.
So far, 19 Member States have submitted Youth Guarantee Implementation Plans, and the other nine are expected to present theirs later this year.
The Commission is carefully assessing the plans submitted.
They reflect very different situations in terms of the challenges facing the Member States, their policies and the institutional arrangements in place, and the constraints on budgetary resources.
The need for a comprehensive strategy for supporting school-to-work transitions is a novel requirement for most Member States.
The point is that the Youth Guarantee needs to be a comprehensive scheme that reaches all unemployed or inactive young people, even those hardest-to-help. It should not be just a collection of existing projects.
A credible Youth Guarantee Implementation Plan starts with a sound analysis of where current policy falls short in meeting young people's needs.
Schemes and programmes for youth employment that exist today across Europe are almost universally weak in reaching out effectively to young people who are neither in employment, nor in education or training. With the Youth Guarantee we aim to change this.
Therefore I am pleased to say that the Implementation Plans we have received include those where the development of a comprehensive long-term Youth Guarantee strategy definitely adds value to existing measures.
In most cases, the Youth Guarantee has clearly been defined in line with the Council Recommendation.
But in most cases the definition of a "quality offer" still requires further consideration.
Also, a number of countries still need to work on the feasibility of their Youth Guarantee schemes and to better clarify how the various types of support to young people will be organised and financed.
It is still too early to give an assessment of the Implementation Plans that would be definitive in any way, because we are in on-going dialogue with the national Youth Guarantee Coordinators.
Member States that have presented their Implementation Plans have been given feedback, both through meetings and in written, and the Commission will continue its close cooperation with them over the next weeks to strengthen the Implementation Plans where needed.
Now, what is the role of regional and local governments in all of this?
As you probably know, the Council Recommendation says the Youth Guarantee needs to be "geared to national, regional and local circumstances".
Developing a partnership approach is part of the Council Recommendation for drawing up and implementing the Youth Guarantee. This is about effective coordination across government at all levels and all the sectors concerned.
Proper coordination is hugely important at all stages — in defining the Youth Guarantee, when the Implementation Plan is drafted, during implementation and throughout the evaluation and review stages.
The need for consistency and a strategic approach mean the process should be steered at national level, which is why the Commission is working at this stage primarily with national Youth Guarantee Coordinators.
But we all know that the real action takes place — or may fail to take place — at local and regional level.
Therefore, existing experience on the ground should feed into the development of the Implementation Plans.
A related fact is that regions will play a bigger role in the 2014 to 2020 programming period, when more Member States will be implementing regional operational programmes than over the past seven years.
The level at which operational programmes are managed is something for each Member State to decide and the Commission does not interfere with this choice – other than by asking Member States to ensure that adequate institutional capacities are in place.
But where Member States decide that operational programmes – and specifically support to employment or training – should be managed at regional level, we will of course need to see a strong sense of responsibility by the regions in the implementation of Youth Guarantee schemes, while maintaining coordination and quality control at the national level.
What is more, as I pointed out, the Youth Employment Initiative involves around 6 billion euros of funding support for regions where unemployment among young people was over 25% in 2012.
This reflects the European Council’s determination to concentrate support for tackling the youth unemployment problem in the areas where it is most acute.
This greater regional focus also entails more responsibility for the regional authorities in the design and implementation of action to help integrate young people into the labour market, and in particular those neither in employment, nor in education or training.
The Commission therefore expects the forthcoming European Social Fund and Youth Employment Initiative operational programmes to be of good quality and to demonstrate a clear vision of the range of youth employment assistance measures to be supported by EU funding, in line with the Youth Guarantee Recommendation.
There is a reason why I stress this point.
I have the impression that most Member States’ plans could pay greater attention to the need to consult, involve and build ownership of the Youth Guarantee among the relevant stakeholders — in short, to develop the partnership aspects of delivering on the Youth Guarantee.
I believe that the differences in the challenges facing the various regions and service-providers and in their resources and capacities should be considered in much greater depth.
And in most cases I would also like to see more detail on the governance mechanisms for implementing Youth Guarantee effectively and involving the right parties.
Those are some of the points where the Commission hopes to see the plans improved and clarified over the coming weeks.
Ladies and gentlemen,
Since we are in Greece, I must say a word of appreciation for the Greek Youth Guarantee Implementation Plan, which the Greek authorities submitted in December last year.
I also want to thank them for the very constructive meeting they had recently with the Commission departments in connection with the European Semester, where it was agreed that a new Plan would be submitted in April.
My departments assure me that the Greek authorities have done a lot of work on their Implementation Plan and continue to be determined to introduce improvements where necessary.
The draft Youth Guarantee Implementation Plan for Greece reflects the extremely difficult economic situation facing this country, the challenging conditions on the labour market here, and the reforms in the pipeline.
Some of the improvements which we have suggested to the Greek authorities concern developing stronger partnerships, incorporating a greater number of quality offers to young people and looking beyond 2015.
The Commission services will continue to work closely with the Greek authorities with a view to consolidating the Plan and ensuring the new version submitted in April meets the targets set in the Council Recommendation.
Ladies and gentlemen,
Tackling the scourge of youth unemployment and exclusion is a duty we owe to the young generation, and it is something which is in the interest of all generations.
I am convinced that the success of the Youth Guarantee in tackling unemployment and exclusion among young people depends to a very great extent on shared ownership by the many players involved.
It extends across government at various levels and encompasses all the key sectors concerned.
I encourage you all to play a full part in building close-knit, constructive and I hope successful partnerships that will make the Youth Guarantee happen here and in other European regions.