Thursday

28th Mar 2024

Jobs crisis tops EU agenda as polls open

  • Commission president Jose Manuel Barroso urged member states to increase efforts to reduce unemployment (Photo: EUobserver)

The European Commission published new proposals to tackle rising unemployment on Wednesday (3 June) and urged members states to redouble their efforts to deal with the growing jobs crisis.

"In this week of elections, it would be a big mistake for Europe to turn its back on this problem," said commission President Jose Manuel Barroso in Brussels, adding that few things concerned EU citizens more at present.

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The new measures that will be debated by EU leaders at a European summit later this month include a proposal to allow 100 percent EU funding for member state projects in 2009-10 that promote greater employment.

Projects currently funded by the European social fund require "match-funding" from member states of between 15-50 percent, but the new rules would provide a temporary derogation from this requirement, prompted by fears that national governments could struggle to come up with the money.

The document also proposes the setting up of a micro-finance fund worth €500 million to support small businesses currently having difficulties in accessing credit and also to help unemployed citizens wishing to set up their own enterprises.

The commission will contribute an initial €100 million to the fund which the European Investment Bank will use as leverage to increase the pot to €500 million.

"We are asking all member states to say ‘yes' to more action," said Mr Barroso.

Employers' organization UEAPME, representing crafts and small businesses within the EU, welcomed the commission's proposals saying they set the "right priorities."

Socialists critical

As European political parties battle to increase voter interest in this week's European elections, the Party of European Socialists branded the new commission measures as incredibly weak.

"If your house is on fire it is no good trying to put out the flames with a glass of water," said the party's president Poul Nyrup Rasmussen.

"Shifting around the European Social Fund while unemployment rockets to 27 million unemployed next year is not the answer. Micro-credit is unlikely to have macro results in a hurry," he added.

Despite sustained criticism of this kind and the general perception that the economic crisis has its origins firmly rooted in free-market policies, polls suggest the Socialists are not headed for the big gains in the European elections that many would expect.

Part of the reason for this is that the German and French centre-right ruling parties were quick to seize the moral high-ground last year with calls for greater regulation and an end to the Anglo-Saxon economic model.

Another is that Britain's ruling Labour party, a member of the PES, has been one of the chief supporters of the now unpopular light-touch approach to banking.

Employment summit

These and other factors make it harder for voters to align one particular party with job creation, an issue that is predicted to be uppermost in their minds when they head to the polls this week.

"Apart from the disappearance of a family member or someone that is close to us, a death of someone [for example], I think unemployment is the most important personal tragedy that someone can go through," said Mr Barroso on Wednesday.

New data released by the EU's statistics office, Eurostat, on Tuesday showed unemployment rose to 8.6 percent in the region in April, with recent commission forecasts saying it is set to average close to 11 percent next year in the EU27.

In recognition of the growing problem, the Czech presidency of the EU called a special employment summit in Prague on 7 May but it was successively downgraded by EU leaders who feared the meeting would produce few results.

However Mr Barroso said the summit's outcome had been "positive," with many of the ideas generated at the meeting making it into Wednesday's communication.

As well as the greater flexibility of the ESF and the setting up of a micro-credit fund for SMEs, commission proposals also concentrate on the need to provide young people with the training and work opportunities they need so as not to miss entry into the labour market this year.

This includes a commitment to provide at least 5 million apprenticeships across the EU for young people facing unemployment.

Added to this, the commission documents calls for greater support for short-time working schemes and lower non-wage labour costs to help get the most disadvantaged back into jobs.

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