European Court of Auditors verifies European Youth Guarantee: Important Initiative but obstacles ahead

A report published by the European Court of Auditors (ECA) identifies three risks to the successful implementation of the EU Youth Guarantee initiative supported by €12.7 billion of EU funding: adequacy of total funding, the definition of a “good quality offer”, and the way the Commission monitors and reports on the results of the scheme.

 Youth unemployment is a huge challenge that most EU countries are facing today.The European Union has responded by setting up an important tool called the ‘Youth Guarantee’ aimed at getting some 7.5 million young Europeans who are not in employment, education or training back on the right path, allowing them to make a positive step towards finding a job.

While this is a financially expensive scheme to implement, the alternative is to continue incurring huge socio-economic costs through unemployment benefits and fore gone earnings and taxes, which, according to EU Agency Eurofound estimates, amount to €153 billion a year – over 1% of EU GDP. The latest available Commission estimates indicate an overall allocation (EU and national resources) of €16.7 billion to fund the scheme in the 2014-2020 period. However, according to the International Labour Organization, the cost of implementing the scheme could potentially reach €21 billion per annum.

The EU auditors conclude that the Commission provided timely and appropriate support to the Member States in setting up their Youth Guarantee schemes. Yet they also note that it did not carry out an impact assessment specifying expected costs and benefits, despite this being a standard procedure for all major Commission initiatives.

The Youth Guarantee scheme was established in June 2013 in response to the worsening situation for young unemployed people, which was exacerbated by the economic and financial crisis. More than one in five Europeans under the age of 24 on the labour market are out of work, while in some Member States the jobless rate is as high as half of all young people on the labour market. From 2014 to 2020, the scheme will be partly financed to a total of €12.7 billion from the EU budget through the European Social Fund and a dedicated Youth Employment Initiative.  However, Member States will need to provide additional funds to pay not just for measures directed at those suffering from unemployment but also measures related to fundamental structural reforms in areas such as training, job seeking and education systems, in order to improve school-to-work transitions and the employability of young people. The amount of national funding available to the scheme is not yet clear: nine Member States have not provided any information to the Commission.