EU struggles with mounting youth unemployment

(BARCELONA) - Youth unemployment across Europe has risen as inadequate training and the widepread use of short-term contracts make young workers one of the main victims of the economic downturn, EU officials said Friday.

The jobless rate among those under the age of 25 across the 27-nation bloc hit 21.4 percent in December, up from 16.9 percent during the same period a year earlier and more than double the rate of 9.6 percent for the general population, EU statistics office Eurostat said Friday.

"There is not a single country in Europe that is not worried about youth unemployment," Spanish Employment Minister Celestino Corbacho, whose country holds the rotating EU presidency, said at a meeting with his EU counterparts in Barcelona.

The jobless rate among youths in December varied greatly across the EU, from a low of 7.6 percent in the Netherlands to a high of 44.5 percent in Spain.

But it has risen in all 27 member states over the past year and in each EU nation it surpasses the level for the overall population by a wide margin.

The increase has fueled fears that large numbers of young people across Europe could become dependent on government aid or that the riots that swept Greece in late 2008 -- blamed in part on poor job prospects for youths -- could be repeated elsewhere.

"There is a risk that they will become dependent on welfare and they don't ever get the work ethic or the work experience they need and that is something we need to avoid and focus on," Ireland's Labout Minister Dara Calleary told AFP on the sidelines of the gathering.

Corbacho blamed Spain's high youth unemployment rate on the fact that young people in the country are primarily employed on short-term contracts that require employers to pay fewer benefits and these have been the first to be eliminated in the recession.

"We have to reflect on how to correct this duality in the labour market," he told a news conference at the meeting.

A mismatch between the skills young people are picking up in school and the needs of the labour market is also to blame, said Jose Isaias, the head of the Spanish delgation at BusinessEurope, Europe's largest employers' association.

"We must ask ourselves if what is being produced at universities has any connection to reality," he told AFP.

Joel Decaillon, secretary of the European Confederation of Unions, noted a "paradox" in that European youths are increasingly more educated "but they find themselves in jobs which have no relation to their training."

"This is not good for the future of society. It represents a slide among the middle classes towards poverty," he told AFP.

To tackle the problem the EU plans to launch a microcredit line worth 100 million euros (140 million dollars) to help youths or the long-term unemployed who are unable to obtain bank loans to start a business.

Individual member states have also launched their own programmes to fight youth unemployment.

For example, Britain has set up a one-billion-pound fund that is available for councils and charities to create posts for 18 to 24-year-olds, as well as for those living in areas of high unemployment.

Hungary and Ireland have both moved to ensure that the vocational training offered youths provides them skills that are in demand by the job market.

But Hungarian Labour Minister Laszlo Herczog cautioned it will take time to reduce youth unemployment rates.

"You cannot really achieve results in the short term because the key and crucial issue here is education. Obviously the nature of these things is that they don't make their impact in just a couple of months," he told AFP.

December 2009 Euro area unemployment rate up to 10.0% EU27 up to 9.6% [Eurostat]