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Meetings in Paris

Germany and France will address soaring youth unemployment

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Germany and France plan to present a joint blueprint today to address soaring youth unemployment as Europe’s two biggest economies seek to find common ground in response to the euro region’s financial crisis.

French President Francois Hollande and German Chancellor Angela Merkel have pushed competing views on how to kick-start growth in the 17-nation euro bloc, with the French leader urging less austerity and Merkel calling for a reduction of debt and deficits with labor-market changes to fuel hiring.

Those taking part in meetings in Paris include German Finance Minister Wolfgang Schaeuble and his French counterpart, Pierre Moscovici, and the respective labor ministers, Von der Leyen and Michel Sapin. Also attending will be Werner Hoyer, president of the Luxembourg-based European Investment Bank.

The joint proposals may involve the EIB leveraging 6 billion euros ($7.8 billion) being made available from the EU through 2020 to yield as much as 60 billion euros in loans to tackle joblessness, Germany’s Rheinische Post reported May 13.

The EIB is deploying 40 percent more funds, or almost 70 billion euros a year in the next three years to fight unemployment, Hoyer told Germany’s Bild newspaper in an interview yesterday.

The euro-area economy will probably shrink for a second year while unemployment will rise to a record 12.2 percent, the European Commission said May 3 in a forecast. Youth unemployment — defined as people aged under 25 years without work — rose to 24 percent in the region in March, according to a Eurostat report published April 30.

The average masked rates of 55.9 percent in Spain, 38.3 percent in Portugal, 38.4 percent in Italy and 26.5 percent in France. 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 7.6 percent.

German officials have pushed for exporting their so-called dual-education system, which has roots dating to the Middle Ages. It combines apprenticeships at mainly private companies with vocational education in about 350 professions.

Von der Leyen said there are 33,000 vacant apprenticeships in Germany and that Berlin needs to bring in young people from other countries to fill them.

In the German state of Saarland, which borders France and where youth unemployment is 6.5 percent, attracting French youths to fill German apprenticeships, Annegret Kramp-Karrenbauer, the state’s premier, said in a May 16 interview in Saarbruecken.

“It’s difficult to get French youths to take apprenticeship positions in the Saarland,” Kramp-Karrenbauer said. “It’s partly due to language. But it’s also due to the fact that what we call the dual-education system, which for us is a very high quality education, doesn’t have much prestige in countries like France and Spain and others.”

Source: Bloomberg

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