1. Growth and Jobs European Semester 2013: May 29th Package
Loris Di Pietrantonio Deputy Head of Unit, DG EMPL 14th June 2013

2. Unemployment impact is far-reaching in many countries
Unemployment rates in % %
Source: European Commission

3. This is a radically new situation in most countries
Evolution of long-term unemployment rates* across the EU between 2007 and 2012
% active population
* People unemployed for more than 12 months as a % of the active population
Source: European Commission

4. Increasing divergence across MS
Change in the number of jobs * (%)
* Commission 2013 Spring Economic Forecasts
Source: European Commission

5. 120 million people are at risk of poverty or social exclusion
Population at risk of poverty or social exclusion, EU-27
Various facets of poverty and social exclusion
19%
Latvia
Risk of poverty or
Social exclusion 40%
Italy
Social exclusion 28%
Ireland
Social exclusion 30%
Deprivation
prevails
Relative poverty
Benefit dependancy
issues
31%
13%
20%
11%
10%
16%
23% 8%
At risk of poverty
84 Mio
Jobless households
38 Mio
Severely materially deprived
43 Mio
Source: European Commission

6. Unemployment is twice as high for young people
Evolution of the youth unemployment rate (%)
Source: European Commission

7. Youth unemployment rates (March 2013)
Source: European Commission

8. Labour mismatches are a sign of wider problems
Evolution of unemployment rate and labour shortages in the EU-27
Unemployment rate
Labour shortages
Source: European Commission

9. Strengthened governance framework in 2013

10. Structure of the May 29th package
1 Chapeau communication
23 CSR for 23 MS + for Euro area
23 SWD for 23 MS + for the Euro area
In April 2013, the Commission also published:
13 In-depth reviews of MIP (BE, BG, DK, FI, FR, HU, IT, MT, NL, SI, ES, SE, UK)
The Alert Mechanism Report was published in November 2012
Background material: thematic fiches

11. 2013 European Semester: Moving Europe beyond the crisis
Chapeau communication issued on 29 May:
rebalancing of the EU economy and fiscal consolidation on-going
Product markets as well as labour markets
very high levels of unemployment
structural reforms needed to boost job creation.
It gives the main strategic lines of the European Semester:
pursuing differentiated, growth-friendly fiscal consolidation
restoring normal lending to the economy
promoting growth and competitiveness
tackling unemployment and the social consequences of the crisis
modernising public administration.

12. The EU2020 targets in the light of the European Semester
Employment rate should be at 75% (now at 68,5%)
Share of early school leavers should be under 10% (now at 12.8%)
Goal of 40% of younger generation having tertiary degree or diploma not met (now at 35.8%)
20 million fewer people at risk of poverty or social exclusion (since 2010, the number of AROPE has risen by 4 million)

13. Employment relevant 2013 CSRs
Extending working lives
Labour taxes and shadow economy
Employment protection and labour market segmentation
ALMP and employment services
Female labour market participation
Protecting the vulnerable
Wages, competitiveness and in-work-poverty
Healthcare and long-term care
Youth unemployment and skills

14. 1. Extending working lifes
Duration of working life (years, 2011) and employment rate of older workers (%, 2011)
2013 CSRs target mainly on:
Keeping people longer in labour market: AT, BE, BG, (CY), CZ, (DK), ES, FI, FR, LT, LU, MT, NL, PL, RO, SI, SK
Enhancing older workers' employment (AT, BE, BG, CZ, (ES), FI, (FR), LT, LU, (LV), MT, NL, PL, RO, (SI), (SK)
Source: European Commission

15. 2. Labour taxes and shadow economy
Tax wedge for low-paid workers (2012)
2013 CSRs target mainly:
Tax burden on low-wage earners: AT, DE, HU, LV, SK
Tax burden and social security contributions of all workers: BE, CZ, FR, IT, NL
Tax compliance and shadow economy: BE, BG, CZ, ES, HU, IT, LT, LV, PL, SK
PIT: Personal Income Tax
SSCee: Social security contributions employee
SSCer: Social security contributions employer
Source: European Commission

16. 3. Employment protection and labour market segmentation
Share of temporary contracts (2011) and transition from temporary to permanent (2010)
2013 CSRs target mainly:
Labour market segmentation: DE, FR, PL, SI
Employment protection legislation: IT, LT, NL
15-64 years
15-24 years %
Source: European Commission 16

17. 4. ALMP and employment services
Long-term unemployment (%, left scale, 2012) and activation support (LMP participants per 100 persons wanting to work, right scale, 2010)
2013 CSRs target mainly:
Enhance quality, coverage and effectiveness of ALMP: BG, EE, ES, FR, HU, IT, LT, LU, LV, RO, SI, SK, (SE)
Increase performance of PES: BG, CZ, ES, FR, HU, IT, RO, SK
Better targeting: BE, DE, DK, EE, ES, FI, FR, (HU), IT, LT, LU, LV, NL, (SE), SI, SK
Strengthen activation elements and individualized services: BE, BG, DE, ES, FR, (HU), IT, RO, SI, SK
Source: European Commission

18. 5. Labour market participation of women
Female employment (in 2012)
2013 CSRs target mainly:
Provision of available and affordable, full-time, care facilities for dependents: (AT, CZ, DE, EE, ES, HU, IT, MT, PL, SK, UK
Decreasing disincentives for second earners: DE, IT, NL
Reducing high gender pay gap AT, (MT)
Source: European Commission

19. 6. Protecting the vulnerable
2013 CSRs mainly target:
Adequacy and coverage of social protection benefits: (CY), (EE), ES, HU, IT, LT, LV, NL, RO, UK
Access to quality social services: BG, UK
Efficiency of social assistance: BG, DE, (EE), ES, LT, LV, PL, RO, UK
Employability of vulnerable/disadvantaged groups: AT, DK, (ES), (FR), (HU), (LT), LU, (NL), SE, (UK)
Childhood poverty: LV, RO, UK
Migrants/Roma: AT, BE, BG, CZ, DK, HU, LU, RO, SE, SK
People living in poverty or social exclusion (in %)
Source: European Commission 19

20. 7. Wages and competitiveness
Real effective exchange rate (REER) and employment growth
2013 CSR-s target mainly:
Aligning wages with productivity developments BE, DE, FI, LU through:
Review wage indexation: BE, (CY), LU, (MT)
Reform wage setting & wage flexibility: BE, IT, LU, (MT), (SI), (SE)
Minimum wages not detrimental to jobs: FR, SI
Source: European Commission, ESDE 2012

21. 8. Healthcare and long-term care
Public healthcare expenditure
2013 CSRs focus mainly on:
Healthcare: AT, BG, CZ, DE, ES, FR, MT, RO, SK
Long-term care: AT, BE, DE, FI, LU, NL, SI
Source: European Commission

22. 9. Youth, education and skills
2013 CSRs target mainly:
Skills /participation in E&T: BE, DK, EE, ES, FI, FR, HU, IT, LT, LU, PL, RO
Promotion of self-employment and start-ups: (CY, IT)
Reducing school drop-out rates AT, DK, ES, HU, IT, (LV), MT, RO, (UK)
Adapt E&T systems to labour market needs + foster apprenticeships + higher education: AT, BG, CZ, DK, (EE), ES, FR, HU, (IT), LT, LU, LV, MT, PL, SE, SI, SK, UK
Access to E&T/school for vulnerable groups: BG, DE, EE, FI, FR, HU, LU, RO, SK
Educational outcomes: AT, CZ, DE, IT, SK
Youth Guarantee (ESF): BG, ES, FR, HU, IT, LT, LV, PL, RO, SE, SK, UK
Youth unemployment rate (%, December 2012)
< 10
> 50
Source: European Commission

23. What happens now? Coreper 1 and 2 19th June EPSCO Council 20th June
ECOFIN Council 21st June
Finalised / outstanding issues
General Affairs Council 25th June
European Council endorsement 27th-28th June
Agreed at first Council after this Early July
National semester beings – implementation of CSRs etc.
AGS and Draft JER sets out priorities for the next semester – likely in November

24. The Cycle of the European Semester

25. Youth Employment Package
Loris Di Pietrantonio Deputy Head of Unit, DG EMPL 14th June 2013

26. 9. Youth, education and skills
2013 CSRs target mainly:
Skills /participation in E&T: BE, DK, EE, ES, FI, FR, HU, IT, LT, LU, PL, RO
Promotion of self-employment and start-ups: (CY, IT)
Reducing school drop-out rates AT, DK, ES, HU, IT, (LV), MT, RO, (UK)
Adapt E&T systems to labour market needs + foster apprenticeships + higher education: AT, BG, CZ, DK, (EE), ES, FR, HU, (IT), LT, LU, LV, MT, PL, SE, SI, SK, UK
Access to E&T/school for vulnerable groups: BG, DE, EE, FI, FR, HU, LU, RO, SK
Educational outcomes: AT, CZ, DE, IT, SK
Youth Guarantee (ESF): BG, ES, FR, HU, IT, LT, LV, PL, RO, SE, SK, UK
Youth unemployment rate (%, December 2012)
< 10
> 50
Source: European Commission

27. Young people not in employment, education or training (NEET) for EU Member States, 2008, 2010 and 2011 27

28. Key problems and possible remedies
Young people dropping out of education or work; low skilled youth most at risk of unemployment and exclusion in the longer
Difficult school-to-work transitions
Growing skills and geographical mismatches, 2 million vacancies across EU
Transitions more difficult in countries with segmented labour markets
Youth Guarantee schemes
Traineeships and apprenticeships
Labour mobility
Reforms in labour market regulation 28

29. Youth Employment Package (YEP)
Council recommendation on establishing a Youth Guarantee
Quality framework for traineeships
European Alliance for Apprenticeships
Mobility of young workers
Results of the Youth Opportunities Initiative

30. A Youth Guarantee Council Recommendation of 22 April: Member States
ensure that all young people up to 25
receive a good-quality offer of
employment, continued education, an apprenticeship or a traineeship
within four months of becoming unemployed or leaving formal education.
Model: fully fledged Youth Guarantee Scheme in Finland

31. A Youth Guarantee
When designing Youth Guarantee schemes Member States shall:
Consider overarching issues (young people not homogenous; principles of mutual obligation; cycles of inactivity)
Implement according to national, regional, local circumstances
Pay attention to gender and diversity of young people.

32. How to deliver a Youth Guarantee?
The Commissions recommended supporting measures based on guidelines in six areas (axes):
strong partnerships between all stakeholders ;
early intervention and activation;
supportive measures enabling labour market integration;
use of EU Funds;
assessment and continuous improvement of the schemes;
implementation.
Details on rationale behind these axes can be found in the SWD (2012) 409

33. Youth Guarantee Schemes have a cost
BUT represent a positive investment
Youth Guarantee Schemes have a cost
Cost of Youth Guarantees
(ILO 2012)
Economic costs of NEETs
(Eurofound 2012)
Eurozone, years
26 Member States (all except Malta), years
About 0.22% of GDP
EUR 21 billion
1.21% of GDP
EUR 153 billion

34. Thank You!