Young people have become the center of the European economic discussion this week as leaders meet in Berlin to discuss employment opportunities and prospects for youth.
Led by German Chancellor Angela Merkel, the group will look to spend 6 billion euros in order to create more prospects for young people with limited skills that are out of work. Youth unemployment stands at over 50 percent in countries including Greece and Spain, and stands at 23.9 percent across the eurozone, up from 23 percent a year earlier. This number represents 5.6 million people 25 or younger looking for work.
Merkel is largely blamed by residents of the European Union for the economic hardship many are facing because of the austerity policies she championed. Moreover, Germany has a reputation of being a akin to a boss for the economic direction European countries must take.
Her country wants to shake that reputation this week and make Europe’s youth know their concerns are important. In a visit to a German manufacturing plant Tuesday, Merkel said “Providing opportunity to those who belong to the common market is the right thing to do in a common European house with a joint currency.”
The conversation appears to be taking a more market-oriented turn as countries like Portugal and Greece struggle to shore up their economies. This stagnation in reform, and the accompanying recession, have prompted many, including European Central Bank President Mario Draghi, to push these countries to reform structurally so they can compete in the global market and depend less on central authorities to create growth.
It is in this spirit that Jan Techau, head of the Brussels office of the Carnegie Endowment, told Bloomberg that jobs must be created.
“Youth unemployment can’t be fought by state-created jobs programs, she said. “It will be fought by economic dynamism and revamping European economies, which isn’t really happening in many euro nations.”
Dynamism is slow to return to countries even as far up the economic food chain as France, where political will sometimes lacks and political reality prevents such measures from going forward. In May, France passed a labor reform package aimed at making life easier for employers looking to terminate or lay off workers in times of economic hardship.
Some European academics agree with Techau, and feel this lack of labor competitiveness is killing Europe’s youth.
Constantin Gurdgiev, a lecturer in economics at Trinity College in Dublin, said unionization of older workers and not of young workers has created an uneven playing field in the market that incentivizes firms to downsize their younger workers first when hardship hits.
“The younger workers are less unionized than the older ones,” he told Deutsche Welle. ”And also, because there is a tenure protection in the European labor market, for the firms it is more expensive to lay off older workers than it is to lay off younger workers.”
While Gurdgiev agrees that the 6 billion euros spent by the EU could make a difference in the preparedness of young people to enter the labor force, the problem is still being avoided.
Despite the best efforts of European leaders this week in Berlin, it’s unlikely that conversations about domestic economies will be discussed to a substantial extent.
Merkel’s chief spokesperson, Steffen Seibert, told reporters in Berlin on Wednesday that Germany’s role is to “spur processes in the EU that can help improve employment of young people.”