Tuesday

22nd Jan 2019

EU unemployment and social problems will take years to fix

  • EU employment remains high at 10 percent (Photo: Tax Credits)

The EU economy might be showing small signs of recovery but it is going to take years to bring employment and social standards back to pre-crisis levels, a new report says.

The report on employment and social developments in Europe, published Thursday (15 January), notes that over 9 million more are unemployed compared with 2008.

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  • High youth unemployment, particularly in southern states such as Spain and Greece, has brought people the streets (Photo: Arturo R Montesinos)

Meanwhile, much of the recent employment growth is down to more precarious temporary contracts - often not offering a living wage - while longterm unemployment continues to rise.

"The report shows a limited and fragile economic recovery for the European Union. Unemployment decreased in 2014 but is still high at 10 percent," said social affairs commissioner Marianne Thyssens.

"There is new job creation but it is too slow," said the commissioner with the job rate at 68.3 percent, far off the 75 percent rate the EU is aiming for by 2020.

The report holds up the US where GDP is 8 percent higher than it was in 2007, noting that euro area GDP is still below what it was seven years ago.

It also presents a range of statistics that further underline the societal and economic upheaval the EU has undergone in recent years.

According to the report, the number of part-time jobs has increased by 8 percent (3.1 million) while full-time positions have sunk by 5.2 percent (9.4 million).

At the same time, social expenditure declined on average in the EU (and across most member states), and money spent on education has dropped in around half of member states.

Structural reforms

As solutions the commissioner pointed to the €315 billion investment plan, the flagship initiative of the current commission to try and create jobs by encouraging investors to back riskier projects.

But her main emphasis was on structural reforms - such as shifting taxes away from labour.

She notes that some member states "were much more resilient" to the economic crisis than others, including Denmark, Austria, Sweden and the Netherlands.

"They make greater use of shorter working arrangements and invest more in lifelong learning and education. Unemployment benefits tend to be widely available."

Other policies help too. Investing in early child care and education - as Malta, Luxembourg, Austria and the Netherlands have - has led to many more women in the workplace.

The commission also wants to push for more 'labour mobility' within the EU - something normally hindered by lack of information about jobs in other member states, language barriers and the practical difficulties associated with moving across social welfare, health and pension schemes.

Around 3 percent of the EU workforce moves around, far less than the US.

Transfer Union

Part of the commission's proposal, to be published later this year, will also focus on "prevention of (social welfare) abuse", with several member states, notably the UK, calling for EU action to stop migrants from so-called 'welfare tourism' - a hot political topic in 2014.

With the policy response to the economic crisis having taken a heavy toll on employment and poverty rates - particularly in southern member state - Thyssen said a planned report on further integration of the eurozone area will also include a "social dimension".

The Belgian commissioner did not rule that EU-level automatic stabilisers would be included in the report.

The controversial idea, which has been mooted in the past, would see automatic transfers of money to member states hit by sudden economic shocks.

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