COMMUNICATION FROM THE COMMISSION TO THE EUROPEANPARLIAMENT, THE COUNCIL, THE EUROPEAN COUNCIL, THE EUROPEANECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THEREGIONSWORKING TOGETHER FOR EUROPE'S YOUNG PEOPLEA CALL TO ACTION ON YOUTH UNEMPLOYMENTYoung people hold the key to Europe's future dynamism and prosperity. Their talents, energyand creativity will help Europe to grow and become more competitive as we move beyond theeconomic and financial crisis. Yet young people have been hit particularly hard by the crisis.At present, nearly 6 million people in Europe under the age of 25 are unemployed and a totalof 7.5 million are not in employment, education or training. Youth unemployment rates inEurope stood at 23.5% in the first quarter of 2013, more than twice the - already very high -rate for the population at large. In some countries, more than half of the young people whowant to work are unemployed.This represents both a huge untapped resource that Europe cannot afford to squander and asocial crisis that Europe cannot allow to persist. Youth unemployment has a profound impacton individuals as well as on society and the economy. Unless current trends are reversedquickly, today's levels of youth unemployment risk damaging the longer-term employmentprospects for young people, with serious implications for future growth and social cohesion.Within Europe's broader strategy to create growth and jobs, helping young people to enter andremain in the labour market and to acquire and develop the skills that will pave the way forfuture employment is therefore a top priority for the European Union.Throughout the financial crisis, the Commission has been working with Member States toaddress the economic and social consequences of high and rising unemployment. Some of thiswork will take time to bear fruit: Europe needs deep structural reform to become morecompetitive and this cannot be delivered overnight. Essential reforms must therefore beflanked by fast-acting measures to boost growth and to help young people find jobs andacquire essential skills. These measures will boost confidence and show young people thatthey have a bright future.The Commission has proposed a number of practical and achievable measures that have thepotential to make an immediate impact, most recently in the December 2012 YouthEmployment Package and the March 2013 proposals for the EUR 6 billion YouthEmployment Initiative. Some of these proposals have been agreed at EU level and must nowbe translated urgently into opportunities for young people. Others are yet to be agreed at EUlevel, in particular those linked to the Multiannual Financial Framework (MFF) for 2014-2020.Against this backdrop, this report sets out steps to be taken without delay to get young peopleback into work, education or training. These steps cover:the implementation of the Youth Guarantee;2

investment in young people through the European Social Fund;the front-loading of the Youth Employment Initiative;support for intra-EU labour mobility with EURES;steps to ease the transition from education to work by boosting the supply of high-quality apprenticeships and traineeships and addressing skills shortages;an acceleration of reforms to deliver a genuine EU labour market in the longer run;andmeasures to support job creation in the immediate term, especially by SMEs, and toincentivise the hiring of young people.In many of these areas, the groundwork has been done. The priority now is to accelerate andfront-load implementation. Success will depend both on the political will of the MemberStates and the capacity of the private sector to create opportunities for young people. The EUcannot substitute for the work that is required at national level. But it can help to make thingshappen, by pinpointing the most critical reforms through the Country-SpecificRecommendations, disseminating best practice, channelling investment from the EU budget,and helping young people to take full advantage of the European single market.The European Commission calls upon the European institutions, Member States, thesocial partners and civil society to work in partnership to implement the measures inthis report; and on the June European Council to give its strong political backing tothese steps.

1. Making the Youth Guarantee a realityAs part of the Youth Employment Package presented in December 2012, the Commissioncalled on Member States to ensure that all young Europeans receive a good quality offer ofemployment, continued education, an apprenticeship or a traineeship within four months ofleaving school or becoming unemployed. This is the Youth Guarantee.The Commission's proposal was adopted by the Council in April 2013. The priority now isimplementation. This is reflected in the Commission's Country-Specific Recommendationsfor 2013. The Commission has identified urgent steps needed in 19 Member States to combatyouth unemployment throughinter aliaactive labour market policies, reinforcement of publicemployment services and support for training and apprenticeship schemes. These steps will allcontribute to the delivery of the Youth Guarantee (see Annex I for a summary of relatedrecommendations).Implementing the Youth Guarantee will require sustained investment at national level.However, experience has shown, for example in Austria and Finland, that this investmentpays off and that the economic and social costs of inaction are far higher than the costs of3

implementation. It will take time for the Youth Guarantee to become fully operational, so it isessential that the process begin now with a clear country-by-country implementation planexplaining exactly how the Youth Guarantee is going to be put into practice, taking dueaccount of variations in the scale and nature of the challenges in different national contexts.The Commission therefore calls upon:The Council to adopt the proposedCountry Specific Recommendationson the YouthGuarantee and on youth employment more generally and Member States to implementthese recommendations swiftly.Member States with regions experiencing youth unemployment rates above 25% to submitaYouth Guarantee Implementation Planby October 2013. These plans should set outhow the Youth Guarantee will be implemented at national level, the respective roles ofpublic authorities and other organisations, how it will be financed, how progress will bemonitored and the timetable. Other Member States are encouraged to submit similar plansby spring 2014.

2. Putting the European Social Fund to work for young peopleThe EU structural funds have proven over many decades to be a powerful driver of jobcreation and social cohesion in Europe. TheEuropean Social Fund(ESF) amounts to almostEUR 80 billion for the 2007-13 period. This has provided extensive support for activitiesthroughout Europe designed to help integrate young people into the labour market and todevelop human capital.Looking ahead to the 2014-2020 period, the European Structural and Investment Funds (ESIF)will have a crucial role to play in supporting young people and implementing the YouthGuarantee. An agreement on the next MFF and the programmes implementing it is urgentlyrequired to ensure that the ESF and other ESIF can be mobilised immediately in January 2014.This agreement must reflect the priority that the EU attaches to fighting and preventing youthunemployment: a minimum share of 25% of cohesion policy funding for the ESF would helpto ensure that at least EUR 80 billion remains available for investment in Europe's humancapital.In parallel, Member States are working intensively with the Commission to design the nextgeneration of Operational Programmes that will govern how this funding is put to use. This isa golden opportunity to gear the new programmes to the most pressing reform priorities forgrowth and jobs, as set out in the Country-Specific Recommendations, and in particular todelivering the Youth Guarantee.

The Commission therefore calls upon:The European Parliament and Council to agree swiftly on theMultiannual FinancialFramework and new ESIF regulations,which should ensure that a 25% minimum shareof cohesion policy funding (at least EUR 80 billion) is allocated to the European SocialFund. Member States with particularly high levels of youth unemployment shouldearmark a fixed share for priorities linked to combating youth unemployment.Member States to accelerate work with the Commission on thePartnership Agreementsand Operational Programmesfor the ESIF and to maintain a very sharp focus on youthemployment, investment in human capital and the adaptation of education and trainingsystems to labour market realities.

3. Kick-starting the Youth Employment InitiativeTo focus financial support still further on the regions and individuals struggling most withyouth employment and inactivity, the European Council agreed in February to create adedicatedYouth Employment Initiative (YEI)to be supported by EUR 6 billion from theEU budget. This will target individual young people aged 15-24 not in employment, educationor training (NEETs) and complement the support provided by the ESF for the implementationof the Youth Guarantee.The Commission has fast-tracked the necessary legal proposals and presented them to theEuropean Parliament and Council in March 2013.1The priority now is for the EuropeanParliament and Council to agree these proposals and to make this funding available as soon aspossible.

3.1 Focusing and front-loading the YEIThe Commission has proposed to concentrate support from the YEI in regions experiencingyouth unemployment rates above 25%, and within these regions on young people (NEETs)aged between 15 and 24. These criteria should be maintained: any reduction in the thresholdwould spread funds too thinly to the detriment of those regions in greatest need.2It is alsovital that the YEI be used above all to support the implementation of the Youth Guarantee.Other target groups will be supported by other sources of funding from the ESIF and inparticular from the ESF.

To ensure that the money from the YEI starts flowing quickly once the legal framework hasbeen agreed, the Commission proposes to adjust the profile of the next MFF to make availablethe entire amount of EUR 6 billion in commitments within the first two years of the next MFF.This will be achieved by changing the implementation profile of other programmes so as toleave the overall annual levels of commitments unchanged.Member States will need to be ready to hit the ground running with their OperationalProgrammes and a pipeline of projects to help get young people into good quality jobs,apprenticeships or education. Implementation should begin without delay, even before thePartnership Agreements are in place and before the legal framework has entered into force.This depends on Member States being ready with their programmes in time: the Commissionwill process them rapidly.The Commission therefore calls upon:The European Parliament and Council to agree theYouth Employment Initiativetotarget support to regions experiencing youth unemployment rates above 25% and to youngpeople (NEETs) aged between 15 and 24, and with a strong focus on actions to supportthe Youth Guarantee.The European Parliament and Council to agree tocommit all EUR 6 billion of the YEIin 2014 and 2015by adjusting the commitment profile of the next MFF and to adapt theESIF regulations to allow expenditure under the YEI to be deemed eligible as of the dateof submission of the YEI operational programmes, even before the PartnershipAgreements are in place and before the legal framework has entered into force.Member States toaccelerate the preparation of the specific YEI programmesand tosubmit these programmes during 2013 for immediate implementation.

3.2 Relaunching the Youth Employment Action TeamsIn 2012, the Commission established jointYouth Employment Action Teamswith theMember States experiencing particularly high levels of youth unemployment. These teamsworked to help ensure that the EU structural funds are being used to maximum effect tosupport young people. Through this work, about EUR 16 billion of EU funding has alreadybeen targeted for accelerated delivery or reallocation. This will eventually help more than onemillion young people and the results are already being felt on the ground (see below andAnnex II).

Examples of results of the work of the Youth Employment Action Teams

In

Portugal,

the 'Impulso Jovem' initiative has entailed a comprehensive reprogramming of EU structural funds and willbenefit 90 000 young people and support 4 500 SMEs by the end of 2015. For example, EUR 143 million of EU fundinghas been reallocated to finance measures that include traineeships in key economic sectors, as well as support for thecontracting of people aged 18-30 years old via reimbursement of employers' social security contributions.

Spain,

over EUR 286 million in ESF funding has been reallocated to actions related to youth. Actions implementedso far include workshop schools and employment workshops, with about 9 500 young participants. Subsidies in the formof reductions in social security contributions for companies recruiting young people have been implemented for 142 000young people. The new Entrepreneurship and Youth Employment Strategy sets out 100 further measures to combatyouth unemployment. EUR 3.485 billion has been earmarked for these actions, some of which will be co-funded by theESF. Several specific measures are being funded by the ERDF in regions where the youth unemployment rates arehighest.In

Italy,

as part of the Cohesion Action Plan, EUR 1.4 billion has been allocated to actions aimed at young people,including a Youth Employment Plan in Sicily worth EUR 452 million, education activities for 65 300 students fromSouthern regions and 13 000 new mobility opportunities. In a second phase, a further EUR 620 million has beendedicated to new actions supporting young people and NEETs, including child care, support for entrepreneurship andcombating early school leaving. The ESF will also co-finance actions to support apprenticeship schemes (EUR 100million) and to provide guidance and placement for pupils and young graduates (EUR 36 million).

Building on this positive experience, the Commission is ready to relaunch and expand theAction Teams to work with the Member States eligible for financial support under the YouthEmployment Initiative. At the initiative of the Member States in question, teams will be setup to support and accelerate work on the preparation of the Operational Programmes and toadvise on how EU funding from the ESF and YEI can best be used to implement the YouthGuarantee.The Commission therefore calls upon:Member States eligible for the Youth Employment Initiative, at their request, to work withCommission experts through dedicatedYouth Employment Action Teamsto assist withthe implementation of the Youth Guarantee scheme and the mobilisation of the ESF andYEI to this end. To support this process and upon request by a Member State, theCommission will coordinate technical assistance, for example through Member Statetwinning.

4. Boosting mobility with EURES and the ESFThe single market offers a wealth of job, apprenticeship and training opportunities forEurope's young people. All the evidence indicates that young people are eager to seize theseopportunities. However, identifying and taking advantage of opportunities in other MemberStates in real time can be daunting. The Commission has therefore long been working to makemobility easier both for the benefit of the individuals, employers and the European economyat large.TheEURES portalgives access to over 1.4 million job vacancies and nearly 31 000registered employers. However, the EURES network is not yet operating to its full potential.The Commission has begun a major reform to make the EURES system more responsive tolabour market realities and to strengthen the focus on the mobility of young people byoffering jobs as well as opportunities to combine work with learning, such as apprenticeships.The EURES portal is also being revamped to make it more user-friendly and a EURESCharter providing commonly agreed EU guidance for national EURES delivery measures will7

be tabled before the end of this year. In addition, the Commission is working on newlegislation to strengthen EURES services for both employers and job-seekers. The objective isto supply more job vacancies and improve the matching of job vacancies with applicationswhile deepening the integration of EURES within national Public Employment Services.For a young person, identifying opportunities to work or learn abroad is one thing; takingadvantage of them is another. The Commission is currently piloting a new system to helpyoung people seize the job opportunities advertised on EURES, while helping SMEs to recruityoung job-seekers from across Europe. 'Yourfirst EURES Job'helps young people to findjobs in other Member States by providing financial support for language courses and othertraining needs, travel expenses and integration programmes in the case of recruitment by anSME. The 'Your First EURES Job' pilot will help to place around 5 000 people in the sixparticipating Member States and will be extended in 2013 to cover apprenticeship andtraineeship placements. Initial results have been very encouraging and some Member States,for example Germany, have based their own mobility schemes on this model.Under the next MFF, the European Programme for Social Change and Innovation will provideadditional direct funding of around EUR 5 million annually to support this type of targetedscheme. However, in view of the scale of the challenge the onus will be on Member States –working through their Public Employment Services – and employers to step up their financialsupport for employment through intra-EU mobility, drawing on the experience of Your FirstEURES Job. The ESF is there to help: from 2014, financial support will be available forlanguage and career-orientation training, travel costs and integration in the host country.The Commission therefore calls upon:Member States to make use of ESF funding opportunities and national funding sources topromote intra-EU labour mobility,including using EURES, and to reinforce thecapacity of national Public Employment Services in this regard.The European Parliament and Council to consider rapidly the forthcoming legislativeproposal from the Commission tostrengthen EURES,which will be tabled by the end of2013.

5. Easing the transition from education to workHelping young people to integrate into the job market after leaving school or university is anindispensable part of delivering the Youth Guarantee. In this year's Country-SpecificRecommendations, the Commission has recommended to 16 Member States to focus onreforming vocational and educational training (VET) programmes by increasing their labourmarket relevance through a stronger work-based learning component and accelerating thereform of apprenticeships. The EU budget can support this process: Member States can usethe ESF, the YEI and the 'Erasmus +' programme to help improve the quality and efficiencyof education and training systems.8

5.1 Implementing the European Alliance for ApprenticeshipsExperience has shown that countries with strong, attractive VET systems and especially thosewith well-established apprenticeship systems and strong work-based learning tend to performbetter in terms of facilitating the transition from school to work and keeping youthunemployment down. Improving the supply and quality of apprenticeships is therefore animportant part of the youth employment strategy.As announced in the Youth Employment Package, the Commission is launching a EuropeanAlliance for Apprenticeships to help improve the quality and supply of apprenticeships and tochange mind-sets towards work-based learning. The Alliance will bring together MemberStates, social partners, businesses, the Commission and other relevant actors to develop highquality apprenticeship-type training and excellence in work-based learning in VET, and topromote national partnerships for dual learning.The launch of the Alliance on 2 July 2013 is an opportunity to galvanise the private sector andto give new impetus to the supply of and demand for high-quality apprenticeships and work-based learning. Businesses have everything to gain from access to a huge pool of potentialcandidates for apprenticeships and from investing now to create a highly-skilled workforcefor the future.The Commission therefore calls upon:The Member States to implement the proposedCountry Specific Recommendationsonapprenticeships and on vocational education and training.Member States to includeapprenticeship reform within their Youth GuaranteeImplementation Plansand to mobilise EU funding to support this objective; and to set upstrong partnerships at national level for dual learning bringing together authoritiesresponsible for education and employment, social partners, chambers, VET providers,youth and student organisations, employment services and agencies managing EUfunding.Theprivate sector to support fully the Allianceand to commit to increasing the supplyof high quality apprenticeships, building on recent industry-driven initiatives.

5.2 Delivering high-quality traineeshipsTraineeships also have an important role to play in smoothing the transition from education towork, particularly in the context of the crisis. High-quality traineeships help boost theemployability of young people and are important stepping stones in the progression to regularemployment.However, despite the broad consensus on the importance of traineeships, there are seriousconcerns about the quality of traineeships on offer and their added-value. These concernsrelate to insufficient learning content, inadequate working conditions and repeatedtraineeships that in reality are used as substitutes for real jobs. To address these concerns, theCommission announced as part of the Youth Employment Package a new European initiativefor a European Quality Framework for Traineeships. The Commission has consulted thesocial partners and work on this framework will now be accelerated in order to present aproposal by the end of 2013.The Commission therefore calls upon:The Council to work quickly on the forthcoming Commission proposal on aQualityFramework for Traineeshipswith a view to having the new Framework in place in early2014.

5.3 'Erasmus +': opening up cross-border education and training opportunitiesDedicated EU programmes also make an important contribution to the development of VETand to helping young people take full advantage of the single market. Increased mobility ofstudents increases labour mobility and contributes to the creation of a more integrated labourmarket. For example, the current Lifelong Learning Programme - and in particular the'Leonardo Da Vinci' sub-programme for VET - has already allowed 500 000 VET learnersand 225 000 higher education students to take advantage of work-based training in anotherMember State, enabling them to develop both the job-relevant and cross-cutting skills thatemployers are seeking.

Examples of how European VET mobility programmes have helped young people

In 2012, Lili from Romania participated in a 'Leonardo da Vinci' mobility project entitled 'Applying modern healthcaresystems'. She spent four weeks developing nursing skills during a training course at the Barmherzige Bruder Hospital inVienna in Austria. This gave her the opportunity to acquire new knowledge regarding nursing techniques and modernresearch techniques and to develop her German language skills. This experience and the Europass Mobility Certificateobtained at the end of the placement helped her to find a new job abroad.Joanna, from Poland, took part in 2008 in a one-month vocational placement in Germany through the 'Leonardo daVinci' programme, working for a local seed company, Appels Wilde Samen. The placement allowed her to acquire skillsin the cultivation of many species of plants as well as to work in a different language and cultural environment. Thisexperience paved the way for her to open her own farm in Poland, where she maintains strong links with the hostcompany in Germany.

Under the next MFF, as part of the 'Erasmus +' programme proposed by the Commission,support for mobility will be scaled up significantly to help almost 5 million young people intotal, including over 700 000 VET placements. Cooperation between employers and educationproviders will be deepened through strategic partnerships and sector skills alliances to supporthigher quality education programmes and cross-border mobility.The impact of this cooperation can be increased by the injection of national and EU funds - inparticular the ESF – to provide opportunities for an even larger number of young people. It isclear that the demand for cross-border mobility is high and that the number of placementopportunities abroad therefore has significant growth potential. To help exploit this potential,the Commission will accelerate the implementation of this part of the 'Erasmus +' programmeand Member States should use their ESF allocations for this purpose.The Commission therefore calls upon:European Parliament and Council to agree rapidly on the new 'Erasmus+'programme.The Commission will accelerate the implementation of the VET component of thisprogramme once it launches in 2014.Member States to use the ESF todevelop and support mobility in VETto help youngpeople acquire the skills necessary to find their place in the labour market.

5.4 Investing in skills and addressing skills mismatchEurope's competitiveness, innovative capacity and productivity depend critically on theavailability of highly-educated and well-trained workers. The long-standing trend towardsever higher skill requirements means that young people without the skills that the economyrequires will find it increasingly difficult to find employment. Tackling youth unemploymenttherefore requires action to tackle skills shortages and mismatches.The process of acquiring skills begins at school and continues through higher education andwork-based learning. However, today the performance of many education systems isinadequate as they display unacceptably high drop-out rates and may fail to provide youngpeople with essential skills. There is therefore an urgent need to make education systems moreresponsive to current and future skills needs so as to avoid skills mismatches and bottlenecks.Addressing skills mismatch in sectors with recognised job creation potential, such as ICT,healthcare and the green economy is a particular priority. The Commission launched in March2013 an EU-wide multi-stakeholder partnership – the Grand Coalition for Digital Jobs - totackle the shortage of ICT skills in the EU and to fill the projected several hundred thousand11

vacancies requiring these skills. As part of its action plan for the EU health workforce, theCommission launched in April 2013 a Joint Action to help improve health workforceforecasting and planning, bringing together the Member States and shareholders to exchangebest practice. The Commission is also carrying out a cross-country mapping study oninnovative recruitment strategies such as the use of social media to attract young people totake up a career in healthcare. The Commission will launch similar coalitions or broaderaction plans to unleash the job creation potential of the "green economy".Entrepreneurial skills are also key for young people seeking employment and starting theirown businesses. Practical entrepreneurial experiences for all young people help to make thelink between education and the real world, turning creative ideas into entrepreneurial action.To support change across the education system, the Commission will provide more detailedpolicy guidance on entrepreneurship in education. A collaboration action with the OECD onGuiding Frameworks for Entrepreneurial Education at the levels of schools, VET anduniversities, will encourage entrepreneurial teaching and learning.To further help young people taking up jobs abroad, the Commission is working in closecooperation with Member States and stakeholders towards the creation of a European Area forSkills and Qualifications. This will ensure that skills and qualifications can be easilyrecognised across borders and facilitate labour mobility.The Commission therefore calls upon:Member States tomodernise and improve their education systemsby addressing thegaps in basic skills, stepping up efforts to tackle early-school leaving, improve theprovision of transversal skills such as digital, entrepreneurial and language skills andscaling up the use of ICT-supported learning.All stakeholders to step up their support for theGrand Coalition for Digital Jobswith aview to addressing the projected shortfall of 900,000 ICT professionals in Europe by2015.

6. Building a European labour market for the longer termMost of the actions described above, if implemented now, will have an immediate effect.However, there is much more to be done in the medium term to reform the economy so as tobuild a genuine European labour market in which all citizens, young and old, are able to movefreely to work, study and train. This will make the European economy more dynamic andflexible while ensuring that the necessary protections are in place for those exercising theirrights to live, work and study abroad.There are already many proposals on the table that will help to make the single market workmore efficiently, including the proposed amendments to the Professional QualificationsDirective and to the Directive on portability of supplementary pension rights and the Directive12

on the enforcement of the rights of mobile workers. There is also a pressing need to improveenforcement of existing EU law, in particular with regard to jobs and working conditions. Inaddition, the Commission is working on more citizen-friendly rules on social securitycoordination concerning unemployment benefits and is analysing the possibility of enablingunemployment benefits to be paid for a period longer than the current 3 months to workersseeking employment in another Member State.The recent Commission proposal to modernise and enhance cooperation between PublicEmployment Services will also contribute to improving the operational functioning of labourmarkets and the delivery of labour market programmes and therefore to helping young peopleinto the labour market. The Commission will propose to establish a network of PublicEmployment Services in order to start a benchmarking system and corresponding mutuallearning activities will contribute to the construction of a European labour market andultimately provide jobseekers and employers with better and more effective employmentservices.The Commission therefore calls upon:The European Parliament and Council to step up work on all proposals designed topromote the development of agenuine European labour marketaccessible to all youngpeople.

7. Creating jobs: helping firms to recruit young peopleYouth unemployment will only fall in a sustainable manner if the economy creates more jobs.All the work underway in Europe to rekindle growth and job creation will therefore contributeto addressing the youth unemployment problem. The priorities highlighted at European levelin the context of the Annual Growth Survey and at national level in the framework of theCountry-Specific Recommendations set out the way forward. In this context, a particulareffort is needed to create the right incentives for firms, notably SMEs, to recruit and retainyoung people.Young people are disproportionately hit by unemployment. This is a reflection of broader,deep-rooted problems in the functioning of labour markets. Moreover, in many countries,young people are over-represented among workers on temporary contracts. Reducing the gapbetween employment protection legislation for temporary and permanent contracts willcontribute to facilitating the transition of newcomers, including young people, from entry jobswith short duration to more stable jobs that offer good career prospects. Moreover, reducingthe cost of employing young people in their first job, for example through targeted subsidiesand reductions in social security contributions in the case of low-skilled positions, can makean important contribution in the right circumstances.SMEs and in particular micro-enterprises are an especially important motor of job creation foryoung people and as such every effort should be made to help them access the finance they13

need to thrive. Here EU instruments, in particular the European Regional Development Fund,play an important role, both in providing direct support to SMEs and co-funding a wide rangeof financial instruments. The European Investment Bank (EIB) also has a crucial role to playwith regard to access to finance for SMEs. The recent capital increase of EUR 10 billion isexpected to allow EUR 12.5 billion to be released annually in direct financial support forSMEs in 2013-15 and may mobilise in total around EUR 37.5 billion in SME loans whenother types of lending indirectly benefiting SMEs and co-financing are taken into account. Inaddition, the Commission is currently working with the EIB to develop joint instruments tosupport lending to SMEs.The Commission therefore calls upon:Member States to implement theCountry-Specific Recommendationsaddressed tothem, including by limiting the tax burden on labour, reducing the gaps in employmentprotection between different types of work contracts and exploring targeted measures toincentivise the hiring of young people.TheEIB to step up support for SMEscreating jobs and offering apprenticeships forunder-25s and to accelerate work with the Commission to implement new mechanisms tosupport SMEs.

Annex 1 : Youth employment-related Country-Specific RecommendationsBESimplify and reinforce coherence between employment incentives, activationpolicies, labour matching, education, lifelong learning and vocational trainingpolicies for older people and youth.Accelerate the national Youth Employment Initiative, for example through aYouth Guarantee.Adopt the School Education Act and pursue the reform of higher education, inparticular through better aligning outcomes to labour-market needs andstrengthening cooperation between education, research and business.DKImprove the quality of vocational training to reduce drop-out rates and increase thenumber of apprenticeships.Continue efforts to improve the labour-market relevance of education and trainingsystems, including by further involving social partners and implementing targetedmeasures to address youth unemployment.Implement and monitor closely the effectiveness of the measures to fight youthunemployment set out in the Youth Entrepreneurship and Employment Strategy2013-2016, for example through a Youth Guarantee.Continue with efforts to increase the labour market relevance of education andtraining, to reduce early school leaving and to enhance life-long learning, namelyby expanding the application of dual vocational training beyond the current pilotphase and by introducing a comprehensive monitoring system of pupils'performance by the end of 2013.FIImplement and monitor closely the impact of on-going measures to improve thelabour-market position of young people and the long-term unemployed, with aparticular focus on the development of job-relevant skills.Take further measures to improve the transition from school to work through, forexample, a Youth Guarantee and promotion of apprenticeship.Address youth unemployment, for example through a Youth Guarantee.Implement a national strategy on early school-leaving and ensure that theeducation system provides all young people with labour-market-relevant skills,competences and qualifications. … Support the transition between different stagesof education and towards the labour market. Implement a higher-education reformthat enables greater tertiary attainment, particularly by disadvantaged students.ITTake further action to foster labour market participation, especially of women and15

young people, for example through a Youth Guarantee.Strengthen vocational education and training, ensure more efficient publicemployment services, and improve counselling services for tertiary students. …Step up efforts to prevent early school leaving and improve school quality andoutcomes, also by reforming teachers' professional and career development.LTImprove the employability of young people, for example through a YouthGuarantee, enhance the implementation and effectiveness of apprenticeshipschemes, and address persistent skill mismatches.Step up efforts to reduce youth unemployment by improving the design andmonitoring of active labour market policies. Strengthen general and vocationaleducation to better match young people’s skills with labour demand, in particularfor people with migrant background.Tackle long-term and youth unemployment by increasing coverage andeffectiveness of active labour market policies and targeted social services.Improve the employability of young people, for example through a YouthGuarantee, establish comprehensive career guidance, implement reforms in thefield of vocational education and training, and improve the quality andaccessibility of apprenticeships.Continue to pursue policy efforts to reduce early school leaving, notably by settingup a comprehensive monitoring system, and increase the labour market relevanceof education and training to address skills gaps, including through the announcedreform of the apprenticeship system.Strengthen efforts to reduce youth unemployment, for example through a YouthGuarantee, increase the availability of apprenticeships and work-based learning,strengthen cooperation between schools and employers and improve the quality ofteaching.To fight youth unemployment, implement without delay the National Plan forYouth Employment, including for example through a Youth Guarantee.Step up reforms in vocational education and training. Further align tertiaryeducation with the needs of the labour market and improve access fordisadvantaged people. Implement a national strategy on early school leavingfocusing on better access to quality early childhood education, including for Romachildren.SEReinforce efforts to improve the labour-market integration of low-skilled youngpeople and people with a migrant background by stronger and better targetedmeasures to improve their employability and the labour demand for these groups.Step up efforts to facilitate the transition from school to work, including via a16

wider use of work-based learning, apprenticeships and other forms of contractscombining employment and education. Complete the Youth Guarantee to bettercover young people not in education or training.SITake further measures to increase employment of the young tertiary graduates,older persons and the low-skilled by focusing resources on tailor-made activelabour market policy measures while improving their effectiveness.Address the skills mismatch by improving the attractiveness of the relevantvocational education and training programmes and by further developingcooperation with the relevant stakeholders in assessing labour market needs.

Step up efforts to address high youth unemployment, for example through a YouthGuarantee. Take steps to attract young people to the teaching profession and raiseeducational outcomes. In vocational education and training, reinforce theprovision of work-based learning in companies. In higher education, create morejob-oriented bachelor programmes.Building on the Youth Contract, step up measures to address youthunemployment, for example through a Youth Guarantee. Increase the quality andduration of apprenticeships, simplify the system of qualifications and strengthenthe engagement of employers, particularly in the provision of advanced andintermediate technical skills.Reduce the number of young people aged 18-24 who have very poor basic skills,including through effectively implementing the Traineeships programme.

Annex 2 – How the Youth Employment Action Teams have helped young peopleIrelandA Labour Market Education & Training Fund, known as Momentum and partof Ireland's Action Plan for Jobs, was launched in December 2012 to provideskills training for up to 6 500 long-term unemployed. The ESF willcontribute EUR 10 million to this Fund, which has an overall budget of EUR20 million. One of the four strands of this Fund is specifically designed foryoung people under 25. Currently, 816 young people are supported under thisspecific strand. But since young people can also participate in the other threestrands, the total number of young participants in Momentum is 1 353.EUR 25 million has been redirected to the integratedYouthreachprogrammewhich provides education, training and work experience to young people whohave left school early without qualifications or vocational training. This willallow 3 700 training places to be maintained until the end of 2013.SlovakiaFollowing the ESF re-allocation, two national projects (worth EUR 70million) were launched in November 2012 supporting job creation for youngpeople under 29 in private and self-governing sectors in the regions with thehighest levels of unemployment (target: 13 000 new jobs). Theimplementation of the projects to date has been successful, withmicroenterprises and SMEs showing the greatest interest in offering workopportunities for young people. By mid-May 2013, more than 6 200 new jobshad been created (EUR 33.1 million contracted).

LithuaniaIn Lithuania, all planned ESF actions are being implemented. A project wasrefocused to offer vocational training programmes to about 6 000 youngpeople. The budget is about EUR 6 million. The project started on August2012 and will end in August 2013. The number of participants is 4 851.A project providing first-job skills for young people was extended with anadditional budget of EUR 6 million, which will support around 6 000 youngpeople. The project started on July 2011 and will end on November 2013. 4382 young unemployed people have already participated in this project.The Entrepreneurship Promotion Fund (ESF EUR 14.5 million), currentlyprovides loans and training services for start-ups and self-employment, withyoung people among the prioritised focus groups under this measure. A newmeasure (worth EUR 3 million) was approved to increase the attractivenessof this loan scheme for start-ups and self-employment.Another new ESF measure (EUR 9.3 million) “Support for the first job” hasbeen recently approved, replacing the existing social security reductionscheme for the first job by wage subsidies. The project started on August2012 and will end in September 2015. The planned number of participants isabout 20 000. The number of applications received by 18 April 2013 is 4 858.18

A new measure worth EUR 2.3 million ''Promotion of youth employment andmotivation'' was approved on 17 April 2013. Two of the projects will focuson volunteering and individual support for vulnerable young people.LatviaEUR 11 million has been allocated to several measures supporting youngpeople without vocational qualifications and seeking new, labour marketoriented, qualifications. As a result of these measures, the proportion ofyoung unemployed receiving EU support will jump from 24% to 40%, whilethe number of persons in vocational training would double.The 5-year project "Acquiring Vocational Education Programmes, BasicSkills and Competences for Sustaining Education and Career Development”is aimed at preparing secondary VET level professionals in order to promotethe acquisition of vocational competences and skills for occupationalactivities and further education as well as facilitating integration in the labourmarket. It is being implemented in partnership with VET schools to provide12-18 month programmes for 2nd and 3rd level professional qualificationsfor at least 4 000 under-25s. By the end of May 2013, 1 372 students havereceived the 2nd and 3rd level of professional qualification.In 2013, the measure “Youth workshops”, co-financed by the ESF, is beingimplemented with the objective of helping up to 500 young people aged 15-24 without previous vocational education to experience 3 professions andmake a well-informed career choice.PortugalA national initiative called 'Impulso Jovem' entailed a comprehensive re-programming of structural funds which will benefit 90 000 young people bythe end of 2015 in mainland Portugal. EUR 143 million of ESF funding wasreallocated to finance measures including traineeships in key economicsectors, as well as support for the contracting of people aged 18-30 years oldvia reimbursement of employer's social security contributions.In February 2013, the scope of the programme was broadened, enlarging theeligibility criteria as well as expanding it to additional regions. By the end ofMay, 9 676 young people have been covered by the programme so far. Atransfer of EUR 10 million from the Madeira ERDF Operational Programmeto the corresponding ESF Operational Programme was made in order tosupport youth employment measures such as traineeships and hiringincentives. By the end of May, 1 497 additional young people had beencovered.SpainIn Spain, during 2012, over EUR 286 million in ESF funding was reallocatedto actions related to youth. From this, EUR 135 million was directed to thepublic employment service to help young people find work. The youthactions implemented so far are workshop schools and employmentworkshops, with about 9 500 young participants. These are mixed19

programmes of employment and training. Furthermore, subsidies in the formof reductions in social security contributions for companies recruiting youngpeople have been implemented for a total of about 142 000 young people.With regard to the EUR 50 million ESF reallocated in 2012 in the FightingAgainst Discrimination programme, measures to tackle youth unemploymentconsist mainly of activities related to integrated pathways to employmentadapted to the specific needs of different groups, such as young withdisabilities, young Roma, young with special difficulties and unemployedyoung with a medium level of employability.The Spanish Government presented on 12 March 2013 the Entrepreneurshipand Youth Employment Strategy 2013-2016. This initiative provides 100individual measures to combat youth unemployment. The actions addressyoung people in general under the age of 30, and especially those who areunemployed. To achieve the Strategy’s objectives and implement the newmeasures, new resources amounting to EUR 3.485 billion have beenearmarked. Some of the actions will be partially funded by the ESF duringthe current and future programming periods.ItalyAs part of the first phase of the Cohesion Action Plan, EUR 1.4 billion hasbeen allocated to actions aimed at boosting education and employment,including a Youth Employment Plan in Sicily worth EUR 452 million andexpected to benefit around 50 000 young people, new education activities for65 300 students from Southern regions or 13 000 new mobility opportunities.In a second phase, a further EUR 620 million has been dedicated to actionssupporting young people and NEETs, including support for entrepreneurshipand combating early school leaving.

Following extensive re-programming at the end of 2012, a national youthaction plan was endorsed in January 2013 with EU funding of EUR 517million. The plan is intended to promote youth employment, training andentrepreneurship and targets nearly 350 000 young people. Additionalsupport of EUR 1.2 billion to address the liquidity needs of SMEs is beingallocated under the latest re-programming exercise. According to the latestinformation coming from the Greek authorities, the new initiatives includedin the adopted youth action plan that have already started (approx. EUR 47million) include the temporary hiring of the young unemployed (up to 35years old) in community-based work programmes in the cultural sector aswell as the provision of support to social structures, which aim at combating20