Origins and outlooks on the European youth guarantee programme

László Andor (born 3 June 1966 in Zalaegerszeg, Hungary) is Senior Research Fellow at IMK (Hans Böckler Stiftung). He served as EU Commissioner for Employment, Social Affairs and Inclusion in the European Commission (from 20102014) and thereafter briefly as Acting Commissioner for Consumer Protection between 2014-2015. From 2005 to 2010, he was a Member of the Board of Directors of the EBRD (London), representing the Czech Republic, Croatia, Hungary and Slovakia. After stepping down from the Commission, he became head of department of economic policy at Corvinus University (Budapest). He has been involved in lecturing and research in other leading academic institutions as Senior Fellow at Hertie School of Governance (Berlin) and as Visiting Professor at ULB (Brussels) and Sciences Po (Paris). He also became Policy Fellow at IZA (Institute for the Study of Labor, Bonn), a Senior Fellow at EPC, a member of RAND Europe’s Council of Advisors, and a member of the Board of Trustees of Friends of Europe, and member of the Board of Directors of Notre Europe (Paris).

Between 1991 and 2005, he taught political science and economic policy in Budapest, and he was editor of the social science journal Eszmélet. He was also a regular columnist for the weekly business magazine Figyelő and the daily Népszava. Since 1998, he has been member of the trustees of the European Studies Foundation in Budapest. He was awarded Doctor Honoris Causa at Sofia University of National and World Economy in May 2014 and the Legion of Honour by the French President in August 2014. Andor has also taught at Rutgers (State University of New Jersey, USA) as Visiting Fulbright Professor (1997-98) and worked as an adviser for the World Bank on SAPRI (Structural Adjustment Participatory Review Initiative). He also worked as an adviser for the Budget Committee of the Hungarian Parliament and the Prime Minister’s Office. Andor holds a degree in Economics from Corvinus University of Budapest as well as an MA in Development Economics from the University of Manchester.

Remembering the first idea of the European Youth Guarantee, Laszlo Andor, European Commissioner for Employment, Social Affairs and Inclusion from 2010 to 2014, gave us his perspective from inside the European institutions on the story of the programme, the work done at the end and an outlook on its effect across the European Union, specifically in Italy.

“First of all, thank you very much for inviting me in Rome to discuss the European youth guarantee programme. I think this is an excellent example of impact of young people being in the European parliament and making the case for the European level action to the benefit of young people in Europe. Why am I saying this? Because the first time that the concept of the youth guarantee was brought to my attention it was in a meeting with the youngest Member of the European Parliament. Her name was Emilie Turunen, from Denmark. She was a member of a political party which belong to the Green group originally but later she transferred to the Socialilsts & Democrats family. We spoke with Emilie Turunen because in 2010 the European Union launched a programme which was called Europe 2020 to target a higher level of employment and to aim to reduce poverty in the European Union. It had a specific focus on young people, one of the initiatives of the Europe 2020 was called “youth on the move” and when we published a proposal for the “youth on the move” in September 2010 we already included the suggestion of a youth guarantee programme, and we said “if there is consensus, we move

Vittorio Emanuele Agostinelli

Project Assistant of European University College Association (EucA)

ahead”. The idea did not come from nowhere, the idea came from specifically 2 countries where such a skin of it was already in practice. One of them was Austria and the other one was Finland. These countries have a very good public employment services, a very strong social dialogue and a strong vocational training system. These conditions allowed them to manage the implement of a youth guarantee skin, meaning that they could limit the length of unemployment for young people. This is very important to clarify at the very beginning: nobody had the illusion that you could eliminate the youth unemployment through this programme. However, you can aim at limiting the length of youth unemployment. This means that if you are an average worker and you experience unemployment, after 1 year we consider you a longterm unemployment because there is a very high risk that you are going to lose your skills, your social capital, your savings and your social situation becomes very precarious. For the young people it is not about 1 year, for the young people it is about 6 months, because you are not so well connected in the society and you may end up in the “limbo”, materially and spiritually as well. These periods of possible unemployment have to be restricted much more for the sake of the individual, the families and their society as well. So, we picked up this idea which was promoted by Emilie Turunen. I also have to say that in 2011 when we launched a discussion first about the youth guarantee, it bounced back. What does it mean? it means that very few countries wanted to discuss about it at all. In spring 2011 a lot of ministers had the impression that Europe was coming out of the recession and we didn’t need to do anything specific about it. Of course, this was wrong, but we didn’t know at that time. We said “okay, at this moment there is no appetite among the ministers, but we will come back when there will be a greater interest and a better reception of this concept” and we didn’t have to wait for very long with this new discussion on the youth guarantee programme. From the end of 2011 the European economy went back into a recession and a lot of people including the ministers of the member states realized that new types of measures were needed, new type of action was needed in the European union and a new type of cooperation was needed between the European level and the member states. So, the European Commission relaunched the discussion in December 2011 and in spring 2012 at the time of the Danish presidency we already had a more favorable discussion among the ministers as compared to 2011 under the Hungarian presidency. That coincided with something which we called the “employment package”, it was a big policy document of the European Commission submitted in April 2012, which also hinted to the need for the “youth employment package”, which eventually was submitted in December 2012. In December 2012 the European economy was in a desperate situation, unemployment was picking about 12% in eurozone, but higher in countries like Italy, even higher in countries like Spain or Greece. ere was a much greater openness among the ministers to do something, I would even say that some ministers were desperate that Europe cannot be seen as doing nothing and just saying “this is a member state responsibility, this is for the regions”, they had to be in action and Europe had to take responsibility at least for the path of this. So we submitted the youth guarantee proposal as part of the “youth employment package” in December 2012 and in European decision making it is considered to be a very fast process because by April 2013 there was already an agreement in council that this has to go ahead needless to say the European parliament was also very supportive. Soon, after the proposal, it was also possible to ensure that in the European budget there will be a separate compartment to support the implementation of the youth guarantee programme with a tool of 6 billion euros for this purpose only. at was extraordinary, because the original budget proposal of the European commission was outlined in 2011, when we did not have this specific programme in mind and you can imagine that the budget debate is such that you originally propose so many things and then the decision makers, in this case the council of the European Union and the European parliament, reduce. That was the only example in 2013 when the 7 years-long budget of the European union was finalized that in the end game on the negotiation something was added. There was a very wide spread understanding that this has to be a priority. We had a several high-level meetings on it: one in Berlin hosted by Angela Merkel, one in Paris hosted by François Hollande and one in Milan which was hosted by the Italian prime minister Matteo Renzi. He shouldn’t be the only one to be mentioned in Italy because originally the discussion started in 2011, so we already had with Elsa Fornero, the ministry for employment, very promising discussions and her successor Enrico Giovannini was extremely focused on this. I should highlight that, while mentioning the Austrian and Finnish example, some of the Italian regions also experimented it with similar programmes. I can tell you about the example of the Tuscany region, from which I met the president Enrico Rossi several times, who was very active in the committee of the regions in Brussels. He promoted a programme they built from the European social funds called “Giovani sì”. “Giovani sì” programme of Tuscany was practically doing what was in the youth guarantee skin and this also showed that if you leave it to the countries or the regions, some of the regions will be innovated and other regions will not be so innovated. So, you need to provide some kind of push, some kind of incentive, even if the European money in this area is very limited it also functions as an incentive and it encourages the local leaders to turn around the situation and to develop new institutions. For new institutions in Italy there are 2 crucial questions: one is the public employment service and the other one is the managing body of the European funds. Neither of these functioned well before it, let’s be honest about it. Italy has absorbed a lot of European funds for 60 years, a very long period, but still some parts of the country are not in a good shape, especially what concerned employment. It was only under Enrico Letta and Enrico Giovannini, as a minister, that they decided to create a higher quality Italian employment service which is also connected nationwide, so it is not only disbursing support funds locally but also looks at Italy as a whole as a labor market which means you had the political unification of the country 1 and an half century before but a kind of economic and labor market unification only came now and it is a very interesting phenomenon. So, this is one thing to upgrade: the public employment service. The second issue is to upgrade the managing authority of the European funds, that’s also essential. Even if that’s the case, I think in all European comparison probably Italy is not among the best performers for the implementation of the youth guarantee programme. We have had a lot of positive feedbacks mainly from other countries but also from some of the northern Italian regions like Veneto or Piemonte, where I was during one of my last visits to Italy as a European Commissioner, it was the anniversary of the social charter of the European union, which was celebrated with Antonio Tajani, who is now the president of the European parliament, in Turin. I also had a chance to visit some projects which were funded from the European social funds and a few other projects outside Rome not only in the northern Italy, in 2012 in Napoli for example. It showed that in many parts of the country in isolation there were and there are some good projects, then the key question is how you can multiply these good projects which benefit the young people if they want to learn a new profession, if they want to perfect their profession or if they want to have a mobility experience. I remember a title of a project, “torno subito”, which means that from the Lazio region they send young unemployed people to other countries for a work experience and then they told them to return as soon as possible for being either a worker or entrepreneur in Italy with the European experience they had. Of course, there are so many regions in Europe so you can’t have the staff, the knowledge and the intelligence to design everything in Brussels, you have to give the money to the local people and then to get some assurance that they will use these European money for the best purpose. I couldn’t speak about howtried failures of the programme. I think there were some good experience of the European youth guarantee programme in countries like France, Luxembourg or Slovakia and there have been great challenges in countries like Spain. However, the feedback from Spain is that, despite the great challenges, there were very good regional programmes and the national programme for youth employment was also very supportive of youth entrepreneurship, which I think also was a missing link before end. It is something to be highlighted that for the young people the European youth guarantee programme should not only be a subsidized job, a subsidized traineeship or a subsidized mobility skin, but it should also be a possibility for a subsidized entrepreneurship with the possibility to draw on microfinance. at’s also why it is important that these programmes were implemented simultaneously with the European microfinance initiative, which in many countries, including Italy, were supportive of microcredit for young people and many other groups which are disadvantaged like families with an immigration background.

e implementation of a microfinance system is important in the inclusion of the people out of the society as long as you combine it with some training. So, we speak about financial inclusion. Why? Because If you grow up in a disadvantaged environment or a disadvantaged family it is 99% that you will learn much less about how to earn money, how to invest money, how to make your lovely youth in a longterm, how to take care of your brother family and how to save for housing. A lot of young people have skills and much more skills than one would think about especially in the age of digitalization. Young people develop such skills much faster than the older generation but still there are some missing links and a missing link is the financial education. You have to provide it through some kind of mentoring and then if you provide alone, you ensure that someone can fulfill the ambition of entrepreneurship but at the same time take care of learning. I think this can have very serious multiplicative effect.”

ABSTRACT

The European Youth Guarantee programme is an excellent example of impact of young people being in the European parliament and making the case for the European level action to the benefit of young people in Europe. The idea came from specifically 2 countries where such a skin was already in practice. One of them was Austria and the other one was Finland. Nobody had the illusion that we could eliminate the youth unemployment through this programme. But we could aim at limiting the length of unemployment for the young people. In 2011 spring a lot of ministers had the impression that Europe was coming out of the recession and we didn’t need to do anything specific about it. Of course, this was wrong, but we didn’t know it at that time. From the end of 2011 the European economy went back into a recession, so a lot of people including the ministers of the member states realized that new types of measures were needed, new type of action was needed in the European union and a new type of cooperation was needed between the European level and the member states. We submitted the youth guarantee proposal as part of the youth employment package in December 2012 and in European decision making it was considered a very fast process because by April 2013 there was already an agreement in the council of the European union in going ahead with the youth guarantee programme. Soon after the proposal it was possible to ensure that in the European budget there will be a separate compartment to support the implementation of the youth guarantee programme with a tool of 6 billion euros for this purpose. That was the only example in 2013 when the 7 years long budget of the European union was finalized that in the end-game on the negotiation something was added. We have had a lot of positive feedbacks of the programme mainly from other countries but also from some of the northern Italian regions like Veneto or Piemonte. I had the chance to visit some projects funded from the European social funds outside Rome and not only in the north of Italy, it shows that in many parts of the country in isolation there are some good projects. The key question is how you can multiply these good projects which benefit the young people. You have to give money to the local people and then to get some assurance that they will use these European money for the best purpose. For the young people the youth guarantee programme should also be a possibility for a subsidized entrepreneurship with the possibility to draw on microfinance and it is important that these programmes were implemented simultaneously with the European microfinance initiative which in many countries including Italy were supportive of microcredit. A lot of young people have skills and much more skills than one would think about especially in the age of digitalization, young people develop such skills much faster than the older generation but still there are some missing links and a missing link is the financial education. You have to provide this through some kind of mentoring and then if you provide alone, you ensure that someone can fulfill the ambition of entrepreneurship but at the same time take care of learning and then I think this can have very serious multiplicative effect.