Counterparties: Why Europe wants to be more Austrian
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European leaders convened at Sciences Po in Paris today to tackle the continentâ€™s increasingly scary youth unemployment crisis. They did a great job of delivering concerned rhetoric (â€śWe have to rescue an entire generation of young people who are scared,â€ť said Italian labor minister Enrico Giovannini). They werenâ€™t quite as good at nailing down specifics.
However, there is some evidence that leaders are slowly becoming motivated to do something. Their clear incentive: the political ramifications of inaction could look something like last weekâ€™s riots in Stockholm, if not much worse.
Joe WeisenthalÂ points to the below chart, showing Germany (DE) and Austria (AT) both with youth unemployment rates below 8%, Greece (EL) and Spain (ES) well above 50%, and Italy (IT) and Portugal (PT) each approaching 40%. Far more countries in Europe are above 20% youth unemployment than are below it.
The most serious step toward reducing unemployment is the Youth Guarantee, adopted last month by the EUâ€™s council of ministers (though implementation is left to the member states, so the planâ€™s fate is far from certain). The plan would ensure a job or training program to anyone under the age of 25 within four months of leaving school or becoming unemployed. This is all based on programs already in place in Finland and Austria, which have youth unemployment rates of 20% and 8%, respectively.Â The plan is estimated to cost a total of â‚¬21 billion, a fraction of the â‚¬150 billion youth unemployment is currently costing the economic union annually. Euro zone countries have already set aside â‚¬6 billion for the guarantee over the next six years.
The Italian government announced last week it was considering a job-sharing program between older and younger workers. While this neo-apprenticeship model is a way to get more young people into the workforce, â€śit wouldn’t create any new jobs, and taxpayers would have to pick up the tab for pension contributions for the older workers who choose to participate,â€ť according to the WSJ.Â – Shane Ferro
On todayâ€™s links:
Why a German exit from the euro zone would be disastrous — even for Germany – Pedro da Costa
Angela Merkel is reversing her stance on austerity in a fashion that’s possibly entirely symbolic – Der Spiegel
And, of course, there are many more links at Counterparties.