EU looks for consensus to get economy moving

Unemployment among young people, small companies and increasing lending will all be on the agenda when the EU’s political leaders meet on 27 and 28 June.

Ahead of the meeting, the Commission has made recommendations in each of these areas, and Commission president José Manuel Barroso has written to all EU heads of state and government calling for consensus on them.

Unemployment

Nearly 6 million Europeans under 25 are currently out of work. In some countries, more than half of young people wanting to work are unemployed.

The Commission’s call to action on youth unemployment  sets out new ideas on how to get young people into work, and urges governments to quickly put in place schemes already agreed – such as the Youth Guarantee.

This would see all young people offered a good job, apprenticeship, traineeship or continued education within four months of leaving school or becoming unemployed.

The Commission would like the €6 billion earmarked for tackling youth unemployment available in 2014 and 2015, rather than spread over the EU’s next seven-year funding period as originally planned.

Increasing lending

As money is tight, fewer banks are willing to lend money, particularly to small businesses. But the European Investment Bank will increase its lending to €60 billion each year until 2015, and the report on increasing lending to the economy  explains how this will be directed towards small businesses and vulnerable countries, generating investment and employment.

The report also sets out three new ways in which small companies can access funding, involving guarantees, securitisation (a process that distributes risk by aggregating assets in a pool) and risk pooling.

Small businesses

Small businesses are often described as the backbone of the economy. But to do well, they need access to finance and minimal red tape.

In 2012, the Commission asked small companies to identify the EU laws they find the most arduous. Many of the resulting ‘top 10’ list of burdensome laws  have already been improved – small companies now have better access to public procurement, and product safety requirements have been simplified.

An investment plan for Europe

In 2012, EU countries agreed on a number of actions to boost the economy, known as the compact for growth and jobs. The commission believes that countries can still do more to help themselves, and lists areas where more cooperation is needed in the report The compact for growth and jobs: one year on .