European Union summit grapples with youth unemployment; tough task even for biggest trade bloc

As Europe's leaders convened to discuss the continent's massive unemployment problem, it was a visitor this week, Nobel Peace Prize laureate Aung San Suu Kyi, who most eloquently summed up what is at stake.

"Youth unemployment is a time bomb," said the Myanmar opposition leader, who held talks on how Europe could help her country emerge from decades of dictatorship.

In the EU, the world's biggest trade bloc, some 23.3 percent — or 5.5 million — of those under the age of 25 are jobless, according to EU figures.

EU government leaders will specifically address the issue at their summit Thursday, but there are few solutions in sight due to countries' high debt, a lack of funds, sometimes strict labor laws and a reluctance among the young to relocate.

The leaders took heart in signs that the financial crisis might have reached a bottom — a timid return to economic growth promises a pickup in employment. But with joblessness still near 11 percent, labor unions were not convinced.

"Twenty-seven million unemployed in Europe see no light at the end of the tunnel, only the light of a high speed train ready to run them over," said Bernadette Segol, the chief of the European Trade Union Confederation.

Business federations want to revive the jobs market by making labor laws more flexible and making it easier to hire and fire at short notice. Unions decry such moves, arguing they have spawned an increase in short-term contracts and low wages that leave households uncertain about the future and undermine Europe's vaunted welfare state.

A pre-summit meeting between labor and employers' federations yielded little beyond agreeing to disagree. EU leaders will later seek to agree on an 8 billion-euro ($11 billion) package to alleviate youth unemployment that would kick in early next year. But for many that is too little, too late.

"We need a much bigger investment plan," Segol said.

The rise in unemployment is worsening divisions within the EU between mostly wealthy countries in the north and the needy in the south.

Germany's youth unemployment stood at only 7.7 percent in August, whereas Spain's was over 50 percent. In Greece, the rate at last count in June was even worse, at a staggering 61.5 percent.

As well as being a burden to on public finances, high youth unemployment has a long-term impact on the labor force by denying potential workers the chance to learn valuable skills. That degrades the country's future employment and growth potential and has also fueled social tensions.

EU president Herman Van Rompuy said Thursday that efforts should be geared toward preparing workers for the burgeoning information and communication technology sector. He estimated that by 2015, there would be 900,000 vacancies in those sectors.

"With unemployment still so high, it is not hard to do the math. This is where we need to invest," he said.

Instead of going high-tech, some nations embrace something as traditional as agriculture.

In Portugal, a growing number of young people, including graduates, have been returning to the land to take up farming. The government is encouraging the trend and now offers six-month paid training agricultural courses for 6,000 people aged between 18 and 35. The number of applicants for such schemes rose to 8,000 in 2012 from just 1,000 in 2008. Some 35 percent had higher education.

Greece offers subsidies to new farmers, and also provides state-owned land at a nominal price, or even rent-free, to under 35-year-olds who are prepared to cultivate it.


Pan Pylas from London, Ciaran Giles from Madrid, Barry Hatton from Lisbon and Nicholas Paphitis from Athens contributed to this article