Youth unemployment, socio-economic divergences and fiscal capacity in the euro area

Policy Paper 101

While the European heads of States and Governments, institutions, and social partners meet at the High level conference on youth employment in Europe, in Paris, Notre Europe – Jacques Delors Institute offers you a Policy Paper on these matters, by Maria João Rodrigues.

| 12/11/2013

| Maria João Rodrigues |

| Labour and social affairs

While
the European Heads of States and Governments, institutions, and social partners
meet at the High level conference on youth employment in Paris, Notre Europe
– Jacques Delors Institute publishes a
Policy Paper on these issues, by Maria João
Rodrigues, member of our board of directors.

After
having presented what kind of divergences exist in the EU and in the euro area in
this context, the author assess the EU tool box to cope with these divergences and
proposes solutions to brake them. She also answers the questions about the
possibility for monetary integration to work without fiscal capacity or what
kind of fiscal capacity is needed in the EMU and how to build it up. She finally asserts we need to
re-balance the conditions to get financial support and proposes an alternative
policy-mix in order to do so.

She concludes by saying that in order to cope with the scale of the
problem of youth unemployment, a new policy
mix has to be shifted towards more growth, investment and jobs creation, and
financing costs of investment have to be reduced by new instruments to be
developed to complete the EMU: banking union and a proper fiscal capacity.