On June 25, Commissioner Lázló Andor paid a visit to Athens on the occasion of a conference organized by the International Labour Organization. Through this visit, the Commissioner for Employment aimed to show his commitment to fight unemployment and, more specifically, youth unemployment, by mobilising resources from the European Social Fund (ESF) more effectively.
At the same time, the European Council will, this week, focus on youth unemployment and the proposals recently submitted by the Commission on the issue. That the European Commission is showing itself to be active on this issue is extremely encouraging; however, more must be done on both a national and European level to fight youth unemployment in Greece.
It will come as no surprise to those well acquainted with the Greek bureaucratic system that European money is not being effectively used or even absorbed by Greece. As was demonstrated only a month ago at a hearing held in the European Parliament, the Task Force for Greece was unable to complete major projects because of its role as an advisory body rather than one with the authority to implement. The Task Force has laid out a “blueprint” for an “Institution for Growth” that would use money from the European Investment Bank and the European Investment Fund. However the process is becoming long, too long for the enterprises in Greece struggling for funds in the midst of one of the deepest recessions the country has ever lived through.
Red tape is one of the reasons Greece struggles so much to implement reforms; a complicated legislative system is another. Earlier this year for instance, funding was granted from the European Social Fund in order to create jobs in social enterprises in Greece. This money ought to be accessible without awkward procedures. But Greece introduced an extra burden in accessing this source of capital and job creation; a new law was passed stating that this money is to be granted to “cooperative” organizations. To do this, there is a prerequisite of five partners, a heap of paperwork, and dozens of permits that need to be obtained and months of waiting. And this was supposed to be a success story. Meanwhile in countries like the Netherlands, one can open a company in a matter of days. Companies, not cooperatives are granted European funding in Italy and regulations are more relaxed. Why can Greece not use the same model? Why must an antiquated bureaucratic system make it nearly impossible for reforms to be implemented rapidly?
Moreover, there is no microcredit scheme or a bank that specializes in low rate loans for SME development in Greece. One needs only to visit websites like www.resetgreece.gr to see that Greek people are not bereft of ideas or an entrepreneurial spirit; however, they lack the tools necessary to capitalize their projects, create jobs and stimulate the economy.
Meanwhile, the solutions proposed by the Commission to combat European youth unemployment are simply not enough. Much has been made of the 6 billion euros recently earmarked by the Commission for its Youth Employment Initiative. Unfortunately, spreading 6 billion over 7 years across the European Union cannot effectively help the 14 million jobless youths, not to mention that even accessing these funds will be encumbered by the complicated and slow moving EU structure of funding allocation.
Without an ambitious and all-encompassing youth employment plan, Europe risks failing on its social contract with an entire generation. The European Youth Guarantee will only work if it the financial support is multiples of the figures proposed by the Commission above. Investing a huge amount of capital in European youth is paramount to exiting the European crisis, for youth unemployment is at least as systemic a problem as the crisis across the banking sector was. Recently, Chancellor Merkel suggested that the young unemployed needed to be prepared to move for employment, but this does not solve the root cause and will only make the brain drain effects in crisis stricken countries like Greece even worse.
Every decision maker in Brussels and Europe at large needs to make youth unemployment an absolute priority: the OECD recently warned that there is a direct relation between the disillusionment of the unemployed youth and growing political discontent across the European Union, which is heading to levels similar to those that sparked the uprisings of the Arab Spring. I do hope we see a European Spring, but one of another kind; one in which the recession is well and truly behind us and our children’s generation knows it has a bright future ahead of it.
* Jorgo Chatzimarkakis is an MEP