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Europe to Unveil ´New Deal´ for EU´s Jobless Youth

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The blueprint will be unveiled in Paris on May 28 and will enroll the European Investment Bank to unlock billions of euros in loans to companies that create jobs for young people. The proposals are part of a joint initiative termed a “New Deal for Europe” that echoes former President Franklin D. Roosevelt’s drive to cut U.S. unemployment in the 1930s.

The EIB may “leverage” the 6 billion euros ($7.8 billion) to be made available through 2020 by the European Union to offer loans worth a total of as much as 60 billion euros.

Chancellor Angela Merkel sees youth unemployment as possibly the most serious challenge facing Europe at this time.The economy of the 17-nation euro area will probably shrink for a second year while unemployment will rise to a record 12.2 percent, the EU Commission said May 3 as it presented new forecasts. Youth unemployment — defined as people aged below 25 without work — rose to 24 percent in the single currency area in March, according to Eurostat.

The average masked rates of 56 percent in Spain and 38 percent in Portugal and Italy. Youth unemployment in the EU will remain above 17 percent until 2015, the International Labor Organization said May 8 in a report called “Generation at Risk.” The rate in Germany in March was 7 percent.

“Conceivable is establishing a link between credit conditions” on offer and the creation of jobs and training places by companies said the EIB President Werner Hoyer. The Paris meeting will be organized by the Berggruen Institute of Governance.

Source: Bloomberg

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