Financial instrument in the youth guarantee. three questions to the European commission

Complementing the special edition of “Microfinance” devoted to the actions carried out by the Ente nazionale per il microcredito in support of the implementation of the Youth Guarantee in Italy, we have asked three questions to the Cabinet of Commissioner Marianne Thyssen on the financial instruments dedicated to young Neets in the European Union. These are the answer by the European Commission’s Spokesperson

Q: In Italy the “Youth Guarantee” gets funds from SELFIEmployment to help NEETs start up a company or start as a self-employed. What’s the situation at EU-level? How many and which countries have put in place financial instruments to activate NEETs? What are the results?

A: Most – if not all – EU countries have some form of start-up incentive programme available to unemployed people. And 14 countries, including Italy, have made start-up incentives to help young people start their own business a core element of the Youth Guarantee.

To give a few concrete examples: under the SELFIEmployment experience, Bulgaria has also rolled out two financial instruments co-financed by Youth Employment Initiative and European Social Fund for a total budget of Euro 36 million. THese are used to support self-employed and start-up microenterprises, and to boost new jobs in the social economy. In Hungary, young people receive the equivalent of the minimum wage. In some cases, the support provided aims to help participants cover social insurance costs, either in the form of a subsidy (e.g. Lithuania) or of reduced social contributions (e.g. Spain). In Italy and Portugal, participants can benefit from loans to cover start-up costs with low or zero rates of interest. In the Czech Republic, participants may receive a grant to cover the interest on loans or other expenses relating to starting a business.

In some cases, in addition to a business plan, a precursory course is mandatory in order to receive the support (e.g. Italy, Slovenia) whilst in others the training element is available but not obligatory and individuals can access to mentoring or counselling services (e.g. Estonia, Finland). Subsidies can be received usually for 1 or 2 years, though there are also cases with lower duration (e.g. 26 weeks of allowance in UK, and 6 months of minimum wage in Hungary), as well as longer duration (3 years in Poland, Portugal and Lithuania, and 5 years of reduced contributions in Spain). You can find more information in the 2017 Report on the Youth Guarantee.

The Commission has also recently published a report on “Employment and Entrepreneurship under the Youth Guarantee – Experience from the ground”. Although the information contained in the report is not exhaustive, you will find information on a number of start-up incentives and entrepreneurship programmes in EU Member States.

Q: Does the Commission publish evaluation reports on the YG? Which measures appear to be the most efficient ones? How much weight is given to entrepreneurial training and support to create micro-enterprises by the MS?

A: The Commission published a report on three years Youth Guarantee and Youth Employment Initiative in 2016. We also publish annual monitoring reports and country factsheets that can be consulted online. More recently, we published a series of 5 reports presenting the results of the first five years of the Youth.

Tiziana Lang

Ricercatrice ISFOL esperta di politiche del mercato del lavoro

Guarantee, outlining lessons learnt, challenges and success factors. One of these, on employment and entrepreneurship, indicates that start-up incentives are much less common in the YG implementation plans than other measures (e.g. wage subsidies) in terms of volume, although most Member States run such programmes. In the framework of the youth guarantee, youth entrepreneurship programmes usually offer financial support for the establishment of new businesses, often complemented with the training and mentoring necessary to increase their survival rate the report confirms that start-up incentives and entrepreneurship programmes work much better when they combine different measures such as entrepreneurship training, counselling, mentoring, financial assistance, access to physical and network capital and follow-up services.

The Commission is currently carrying out an evaluation study on the latest results and the effectiveness of YEI and ESF support to youth employment, including cost effectiveness of different types of operations supported. The study will be finalised by the end of 2019.

Q: Are encouraging of entrepreneurship and self-employment and the right of NEETs to continue education / get a trainee – or apprenticeships / offer of employment at the latest 4 months after having lost a job or quit education part of the principles of the Pillar of Social Rights?

A: Yes, these rights are an integral part of the European Pillar of Social Rights. The EU’s commitment to the Youth Guarantee has been reinforced by its inclusion under principle 4 of the Pillar: “Young people have the right to continued education, apprenticeship, traineeship or a job offer of good standing within 4 months of becoming unemployed or leaving education”. Principle 5 of the Pillar states that “entrepreneurship and self-employment shall be encouraged”, and selfemployment is also mentioned under principle 4: “Everyone has the right to timely and tailor-made assistance to improve employment or self-employment prospects. This includes the right to receive support for job search, training and re-qualification. Everyone has the right to transfer social protection and training entitlements during professional transitions” and principle 12: “regardless of the type and duration of their employment relationship, workers, and, under comparable conditions, the self-employed, have the right to adequate social protection”.