New plan can generate 2.1 million jobs in Europe by mid-2018 – UN labour agency

The new International Labour Organization (ILO) report entitled An Employment-Oriented Investment Strategy for Europe, shows that a combination of public and private sector investment worth 315 billion euros might foster Europe’s competitiveness and help tackle the jobs crisis.

In a statement to the press, Director of the ILO Research Department, Raymond Torres, indicated that the proposal “can complement the monetary measures recently announced by the European Central Bank, by encouraging enterprise investment, growth and job creation.”

But in order to make a significant dent on unemployment, the plan must first include a significant portion of private investment, especially among job-rich small enterprises. It should also address the wide disparities in unemployment that exist across the EU, so that economies with greater need can benefit from the fund. In the absence of these two conditions, the plan will make little or no difference to the EU employment outlook, the ILO warned.

The challenge now is to ensure that policy-makers at the EU level avoid a “business as usual” scenario that would result in funds being diverted away from countries and sectors that are most in need. In addition, it is crucial for the plan to be accompanied by a longer-term employment strategy that focuses on quality jobs and balanced refor

Throughout Europe, the average unemployment rate stands at around 10 per cent, close to 3 percentage points above the rate reached before the start of the global crisis in 2008. Moreover, half of those unemployed have been without a job for more than a year, with women and youth disproportionately affected.

There are also wide cross-country disparities, with unemployment rates in Southern Europe and parts of Central Europe stubbornly high. As of the third quarter 2014, the unemployment rate in Spain was over 23 per cent and in Greece above 25 per cent. Three years prior, both countries had unemployment rates of 8 per cent.

“These developments have imposed huge economic and social costs, with the worst impacts in Southern Europe but with damage to households and working people across the region,” explained Sandra Polaski, ILO Deputy Director-General for Policy. “The urgency to address these losses increases with every passing day.”

People who have been unemployed for long periods of time are more likely to become discouraged and leave the labour market altogether. And as skills erode, workers’ employability deteriorates – making it increasingly difficult for workers to find a new job when the labour market begins to recover. This issue is of particular relevance for youth.

Photo: World Bank/Simone D. McCourtie