Czech Business Today

Youth unemployment is rising every month in Europe. While the EU average at the end of the last year was approximately 24 percent, in some countries, like Spain, the youth unemployment stepped over 50 percent. All in all, there are almost 6 million people under the age of 25 without a job. 

As a reaction to that, the European Commission proposed a new set of measures called “Youth Employment Package” based on four key initiatives, one of them being Youth guarantee schemes. This proposal basically guarantees to every person under the age of 25 that within four months after being unemployed or after leaving formal education, he or she will be offered a job, continued education, an apprenticeship or a traineeship. The Commission proposes that such guarantee schemes could be co-financed by the European Social Fund. In mid-January, the European Parliament said quite a strong yes to the scheme, when 546 MEPs voted in favor of the proposal. While most of the MEPs support the idea of having an EU-wide system of apprenticeship provision, especially Socialists and Democrats, those not in favor criticize it as a populist proposal that will further increase the already high pressure on national budgets. In addition, opponents are convinced that actions to tackle youth unemployment should be taken at the national level with the involvement of national governments and should be tailored to specific conditions of labor markets in each country. 

In general, European business associations welcome the proposal on youth guarantees. European businesses already play an important role when it comes to provision of apprenticeships and traineeships. However, if the EU wants to evolve this idea into a viable and long-term efficient system, it needs to cooperate more with businesses, especially on the national level, and a coordinating role of governments is also required. Nevertheless, business associations also stress that financial commitments required by member states might be a bottleneck. The Confederation of Industry of the Czech Republic also stresses the need for bigger flexibility of the guarantee schemes. 

In its position, it indicates that incentives to tackle youth unemployment should be in line with the economic situation of individual member states. It also highlights that certain motivational incentives to hire an apprentice or a trainee should be introduced, which would lead to increased cooperation of businesses and young people. Now, it is on EU employment ministers to decide.