Structural reforms needed to boost employment

The report on employment and social developments in Europe, published today, notes that over 9 million more are unemployed compared with 2008.

“The report shows a limited and fragile economic recovery for the European Union. Unemployment decreased in 2014 but is still high at 10 percent,” said social affairs commissioner Marianne Thyssens.

“There is new job creation but it is too slow,” said the commissioner with the job rate at 68.3 percent, far off the 75 percent rate the EU is aiming for by 2020.

The report holds up the US where GDP is 8 percent higher than it was in 2007, noting that euro area GDP is still below what it was seven years ago.

As solutions the commissioner pointed to the €315 billion investment plan, the flagship initiative of the current commission to try and create jobs by encouraging investors to back riskier projects.

But her main emphasis was on structural reforms – such as shifting taxes away from labour.

She notes that some member states “were much more resilient” to the economic crisis than others, including Denmark, Austria, Sweden and the Netherlands.

“They make greater use of shorter working arrangements and invest more in lifelong learning and education. Unemployment benefits tend to be widely available.”

Other policies help too. Investing in early child care and education – as Malta, Luxembourg, Austria and the Netherlands have – has led to many more women in the workplace.

The commission also wants to push for more ‘labour mobility’ within the EU – something normally hindered by lack of information about jobs in other member states, language barriers and the practical difficulties associated with moving across social welfare, health and pension schemes.

Around 3 percent of the EU workforce moves around, far less than the US.

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