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Europe talks jobs but will there be action?

Wednesday, July 03, 2013 - 02:30

July 3 - Germany's Angela Merkel is meeting European leaders in Berlin to discuss how to tackle chronic youth unemployment. But as Joanna Partridge reports the summit is being seen by some as a pre-election public relations exercise.

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Young, European and desperate for a job. Youth unemployment is one of the most pressing problems of the ongoing debt crisis - and protesters took to the street in Berlin. SOUNDBITE: Karel, Czech protester, saying (English): "We need solutions because unemployment of youths is a real big problem, also in our country, the Czech Republic." Just across the road German Chancellor Angela Merkel was hosting a meeting of around 20 European leaders to discuss how to tackle youth unemployment. Around 25% of under 25s in the EU are out of work. That rises to 50% in recession-hit countries like Greece and Spain, leading to fears of a lost generation. Many blame Germany - and its insistence on austerity - for these levels of joblessness, and Merkel wants to challenge that view. The leaders discussed how best to spend 6 billion euros over the next two years to create jobs, and provide training and apprenticeships. SOUNDBITE: German Chancellor Angela Merkel, saying (German): "I don't think money is the problem at the moment. Rather, the problem is - how do we want to earn money in future? How can we give young people a chance? How can we give small and medium-sized firms credits so they can pay back interest? In a word - how can we restart the economy?" The summit comes just two and half months before Merkel is hoping to get re-elected. And critics say it's all a public relations exercise. Nick Beecroft from Saxo Bank says it's not all electioneering. SOUNDBITE: Nick Beecroft, Chairmand and Senior Market Analyst, Saxo Bank, saying (English): "Politicians are desperate to keep people off the streets, quite frankly, in southern Europe. There's a real danger this summer that if they didn't bend in terms of austerity, if they didn't implement some growth creation policies, then we could see widespread social unrest throughout Europe." Some economists say instead of funding programmes, European leaders should concentrate on pushing through reforms. Adam Cole is from RBC Capital Markets. SOUNDBITE: Adam Cole, Head of FX Research, RBC Capital Markets, saying (English): "Measures that generally increase flexibility, that reduce labour market rigidity, that make hiring and firing easier, allow employment to follow output more closely, those measures, not dissimilar to what the UK did 20 years ago, will ultimately improve long-term growth potential." But yet more austerity may be more than many Europeans are willing to take. Europe's leaders are reluctant to grasp the nettle and inflict more short-term pain on their citizens, even if it leads to long-term gain.

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Europe talks jobs but will there be action?

Wednesday, July 03, 2013 - 02:30