MILAN – France and Italy plan to ask the European Union to put up another 14 billion euros ($18 billion) to create jobs for the 5 million young unemployed people, but face stiff opposition from Germany at a summit Wednesday.
French President Francois Hollande told reporters that he and Premier Matteo Renzi would like to increase a fund earmarked to ease youth unemployment to 20 billion euros from 6 billion euros.
Unemployment is one of Europe’s most pressing economic problems — some 25 million people are without work, or 11.5 per cent of the work force. Among the young, nearly one in four is without a job.
But European Parliament President Martin Schulz suggested throwing more money at the problem was a solution, and that it was member states that were slow in coming up with programs to help young jobseekers.
Of the 6 billion euros made available to EU states to ease youth unemployment, “just 1 per cent has been requested,” Schulz said.
Wednesday’s is the third EU summit on the region’s employment crisis in just under 18 months, and comes amid growing popular frustration with the failure of government and institutions to return the continent’s economy to health.
Several thousand union activists protested outside the meeting venue, scuffling briefly with riot police. The protesters demanded a stop to government spending austerity policies and called for reforms to encourage investment.
“The unemployment rate and the number of precarious jobs are only increasing,” said Maurizio Landini, the head of the FIOM metalworkers’ union.
European Commission President Jose Manuel Barroso promised no new investment, however.
He said he would press EU leaders to live up to their budget commitments, which require them to bring deficits below 3 per cent of GDP. France in particular is defying that limit, afraid to clamp down on spending for fear of doing damage to its already-weak economy and labour market.
France and Italy’s request to slow the pace of spending cuts and increase investment by the EU is also facing opposition from Germany, which has long been the main enforcer of austerity.
Italian economist Tito Boeri said leaders should recognize that the program has failed because there are no jobs to offer young people in the countries with the highest youth unemployment rates, like Greece, Spain and Italy, due to recession.
“We are not in an economic cycle where this can help,” Boeri said.
European countries have seen unemployment skyrocket, first fueled by the global recession and then by the continent’s debt crisis. The jobless rate for the EU’s 28 member countries is 11.5 per cent. For young people in Europe, those aged between 15 and 24, the situation is much worse, at 23.3 per cent.