European, Young and Unemployed?

Don't despair, the EU is (finally) on your case, says Morningstar's Jose Garcia-Zarate

Jose Garcia Zarate 26 July, 2013 | 12:26PM
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"Against the background of a weak short-term economic outlook, youth unemployment has reached unprecedented levels in several member states, with huge human and social costs. Urgent action must be taken." – The European Council

With youth unemployment rates in some Southern European countries already above 50%, the casual observer could be forgiven for feeling somewhat perplexed at this sudden call for "urgent action." However, true to historical form, the EU stands ready to tackle a crisis only after it has been allowed to fester long enough to cause untold—and quite possibly unnecessary—damage. The EU has always been a reactive, rather than proactive, institution. Despairing as this is, it probably cannot be otherwise, given the constant struggle to balance individual countries’ interests to those of the ever-expanding whole.

And so, better late than never! Not that the young unemployed in Greece, Spain or Italy should hope for a speedy resolution to their predicament. Indeed, the only thing the EU can offer is timid financial assistance, plus advice—some would say command—to continue implementing deep structural labour market reforms. After all, supportive labour market policies, which remain the remit of individual governments, cannot jeopardise the prime objective of budgetary consolidation to which the EU as a whole remains utterly faithful.

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Jose Garcia Zarate

Jose Garcia Zarate  is Associate Director of Passive Strategies Research for Morningstar Europe

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