Youth unemployment tops EU summit agenda, again

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EU leaders gathering in Brussels on Thursday (27 June) for a two-day summit will again turn to measures aimed at helping young people to get jobs, as unemployment figures soar in southern countries.

The summit kicks off at 4.30pm local time with a meeting between leaders, trade unions and employers’ associations, to hear what actions they are taking to boost youth employment.

Included in the talks is the umbrella association representing EU staff – some of whom are on strike against an agreement earlier this week to freeze their pay for two years.

The leaders will then hear from the head of the European Parliament, Martin Schulz. They are expected to try and pressure him into reaching a deal on the next seven-year budget, for which there is still no majority among MEPs.

A senior German official on Wednesday warned members of the European Parliament to “take responsibility” and approve the 2014-2020 budget, as a deal is a precondition for a €6 billion injection into the youth employment scheme agreed earlier this year.

“It’s time now to agree on this budget. In the best scenario we will have a deal before the summit, else talks will continue in the coming days,” the source said.

EU leaders will also meet with the head of the European Investment Bank (EIB), Werner Hoyer, and look at ways to increase the bank’s lending capacity after it received a €10 billion capital increase earlier this year.

“We feel that they haven’t used the money boost well enough, so we will be looking at new ways to increase risk sharing,” an EU official told this website.

The European Commission has already drafted a paper on how the EIB could boost its lending powers.

Its loans are used mostly by small and medium enterprises, which could hire more young people if they get the money to fund expansion.

Under the most ambitious scenario, EIB lending could exceed €100 billion.

A top EU official meanwhile told journalists in Brussels not to expect this summit to “solve the youth unemployment problem,” but insisted that it is part of a “broader strategy” aimed at getting the EU economy out of recession.

Leaders will then turn to eurozone architecture, focusing mostly on what has been achieved in the so-called banking union.

A deal was struck late on Wednesday between finance ministers to establish a mechanism for failing banks which would first hit bank shareholders and only as a last resort turn to the publicly-funded eurozone bailout fund (ESM).

Further steps along the road – such as the creation of a permanent euro-president as proposed by France and Germany, or forcing euro countries to pre-consult each other on major reforms – are likely to be deferred to the October and December summits, after German elections in September.

The summit is also likely to endorse the so-called country-specific economic polcy recommendations issued last month by the European Commission, despite criticism from the French and Hungarian leaders about the wording of their country reports.

Meanwhile, Croatia will be welcomed as the 28 member state at this summit, as the country is set to join the EU on 1 July.

At the same time, Serbia is set to start EU membership talks early next year, with EU leaders to confirm on Friday a decision to start drafting an EU negotiations mandate in autumn and then, provided the Serbian-Kosovo agreement is implemented properly, to kick off talks in January.

 

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