The European Union, the European Investment Fund (EIF), and the European Investment Bank (EIB) have launched a €200 million loan fund to support lending to micro-enterprises and social enterprises under the EU Programme for Employment and Social Innovation(EaSI). Commenting on the new EaSI loan fund.
Employment, Social Affairs, Skills and Labour Mobility Commissioner Marianne Thyssen said: “We are delighted about the launch of this new loan fund under our Programme for Employment and Social Innovation that will give a sizeable boost to microfinance institutions and social enterprise lenders in Europe. This new fund is another addition to the toolbox of EU level instruments dedicated to social finance. Moreover, it reflects the EU's unwavering commitment to delivering on the European Pillar of Social Rights, building a more inclusive and fairer Europe, and supporting equal opportunities and access to the labour market.”
In line with the EU's policy objectives, the fund will promote microfinance and social entrepreneurship in member states and other participating countries, by encouraging microfinance institutions and social enterprise lenders to increase funding for micro-enterprises as well as social enterprises as a means of supporting financial and social inclusion. The loan fund will provide senior and subordinated loans to microfinance institutions and social enterprise lenders in order to boosting their lending capacity. It expands the range of EU level financial instruments available under the EaSI programme. More information is available here.
Support for reinforced Youth Guarantee: Council adopts Commission's proposal for a Recommendation on a Bridge to Jobs
On 30 October, the Council adopted the Commission's proposal for a Council Recommendation on a Bridge to Jobs from 1 July 2020, reinforcing the existing Youth Guarantee. The Recommendation steps up the comprehensive job support available to young people across the EU and makes it more targeted and inclusive, also when it comes to the challenges caused by the pandemic.
Jobs and Social Rights Commissioner Nicolas Schmit said: "As the unprecedented crisis brought about by the COVID-19 pandemic continues to disproportionally affect young people, there is an overwhelming agreement that we need to act fast. The newly adopted Recommendation aims to give young people all possible opportunities to develop their full potential, and to thrive in the world of work and beyond. It is backed up by significant EU financing under NextGenerationEU and the future MFF, which will help young Europeans find their way into a fast-changing job market. I encourage member states to make best use of the money for the benefit of the next generation.”
Young people signing up to the Youth Guarantee are entitled to receive an offer of employment, continued education, traineeship or apprenticeship within four months of leaving formal education or becoming unemployed. Since 2014, each year more than 3.5 million young people registered in the Youth Guarantee accepted such an offer. Under the new Recommendation, the Youth Guarantee reaches out to a broader target group of up to 29-year-olds. It also adopts a more tailored approach by providing young people, in particular vulnerable ones, with guidance especially suited to their individual needs and the green and digital transition of our economies. Ensuring young people have adequate digital skills is a top priority.
COVID-19: How the EU fights youth unemployment
COVID-19 could lead to the emergence of a "lockdown generation", as the crisis hits young people’s job prospects. According to the International Labour Organization (ILO) the pandemic is having a "devastating and disproportionate" impact on youth employment, while the most recent figures show that young people face major obstacles in continuing training and education, moving between jobs and entering the labour market.
Reducing youth unemployment in coronavirus times
Before the pandemic, EU youth unemployment (15-24) was 14.9%, down from its peak of 24.4% in 2013. In July 2020, it rose to 17%. The European Commission’s summer 2020 economic forecast predicts that the EU economy will shrink 8.3% in 2020, the deepest recession in the EU's history. To offset the impact on young people, the Commission proposed a new initiative called Youth Employment Support in July 2020.
A reinforced Youth Guarantee;
improved vocational education and training;
renewed impetus for apprenticeships, and;
additional measures to support youth employment.
What is the Youth Guarantee?
Launched at the peak of the youth employment crisis in 2013, the Youth Guarantee aims to ensure people under the age of 25 get a good-quality offer of employment, continued education, an apprenticeship or a traineeship within four months of becoming unemployed or leaving formal education.
Covers young people aged 15 - 29 (previously the upper limit was 25).
Reaches out to vulnerable groups, such as minorities and young people with disabilities.
Provides tailored counselling, guidance and mentoring.
Reflects the needs of companies, providing the skills required and short preparatory courses.
In a resolution adopted by the employment and social affairs committee on 22 September, MEPs welcome the Commission’s proposal but call for more money to be mobilised for the next phase of the Youth Guarantee (2021-2027). They also criticize the budgetary cuts for youth employment support that were made at the EU summit in July.
In addition, the committee advocates a legal framework to be put in place to ban unpaid internships, traineeships and apprenticeships in the EU. MEPs also criticise that not all EU countries comply with the voluntary recommendations of the Youth Guarantee and therefore call for making it a binding instrument.
MEPs will vote on the resolution during a plenary session in early October.
Parliament calls for more ambition
In a resolution on EU Employment Guidelines adopted on 10 July, MEPs called for a revision of the forthcoming guidelines in light of the Covid-19 outbreak, underlining the need to tackle youth unemployment through a reinforced Youth Guarantee.
In July Parliament also backed an increase in the budget for the Youth Employment Initiative, the main budgetary instrument for Youth Guarantee schemes in EU countries, to €145 million for 2020.
Parliament called for a significant increase in funding for the implementation of the Youth Employment Initiative in a resolution on the EU's next long-term budget adopted in 2018. MEPs liked how the initiative has supported young people, but said improvements are needed, including an extension of the age limit and the setting of clear quality criteria and labour standards.
EESC gives its input to the debate on decent minimum wages in Europe
The European Economic and Social Committee (EESC) has adopted the opinion Decent minimum wages across Europe following the European Parliament's request for an exploratory opinion. The request was made after the Commission announced that it was considering proposing a legal instrument to ensure that every EU worker is entitled to a minimum wage allowing a decent standard of living.
Figures show that about one in ten workers in the EU earn around or below the national statutory minimum wage. In some countries, the existing minimum wage floors are currently not sufficient for workers to be lifted out of poverty by employment alone. The EESC said in the opinion that it remained concerned that poverty in general and in-work poverty were still significant problems in many member states. At the same time, it emphasized that high-quality employment continues to be the best route out of poverty.
In its view, fair minimum wages could help reduce poverty among working poor people, combined with person-centred, integrated and active inclusion policies. They could also help meet a number of EU objectives, such as achieving upward wage convergence, improving social and economic cohesion and eliminating the gender pay gap. Women currently account for the majority of low-wage earners, together with other vulnerable groups, such as older workers, young people, migrants and workers with disabilities. Wages represent payment for work done, and are one of the factors that ensure mutual benefits for companies and workers. They are linked to the economic situation in a country, region or sector. Changes may have an impact on employment, competitiveness and macro-economic demand.
The EESC said that it recognizes concerns regarding possible EU action in this area and does not underestimate the complexities of the issues involved. It acknowledges that the Commission will have to adopt a balanced and cautious approach.
It therefore stresses that any such EU initiative must be shaped on the basis of an accurate analysis of the situation in the member states, and must fully respect the social partners' role and autonomy, as well as the different industrial relations models. It is also essential that any EU initiative safeguards the models in those member states where the social partners do not consider statutory minimum wages to be necessary, notably those where wage floors are set through collective bargaining.
When setting statutory minimum wages, timely and appropriate consultation with social partners is important to ensure that the needs of both sides of industry are taken into account. The EESC regrets that, in some Member States, the social partners are not adequately involved or consulted in statutory minimum wage setting systems or adjustment mechanisms.
However, the three groups within the EESC, representing the EU's employers, trade unions and civil society organisations, have divergent views on the way ahead.
Rapporteur of the opinion, Stefano Mallia (Employers' Group), said: "The COVID-19 crisis has caused and continues to cause huge economic losses, which will inevitably take a huge toll on businesses. Minimum wages is a sensitive subject that must be approached in a manner that fully takes into account economic consequences and the division of competences between the EU and the member states, and that respects the specific features of national minimum wage setting and collective bargaining systems. The Employers' Group believes that the EU has no competence over pay, and pay levels in particular, and that setting minimum wages is a national matter, done in accordance with the specific features of respective national systems. Any misguided action on the part of the EU must be avoided, especially at this particular point in time. Where social partners need support, we should look into addressing specific needs by promoting exchanges of best practices and capacity-building and not fall into the trap of coming up with a one-size-fits all approach that could have serious negative consequences."
Rapporteur of the opinion, Oliver Röpke (Workers' Group), said: "This opinion comes at an opportune moment for the European Union and I'm very pleased that the EESC can contribute to the discussion on minimum wages in Europe. The COVID-19 crisis has again thrown a spotlight on the dramatic inequalities in our labour markets and in society, not least the severe income and job insecurity felt by far too many working people. Ensuring that workers across the EU benefit from decent minimum wages must be an essential part of the EU's recovery strategy. For the Workers' Group, it is undisputable that all workers should be protected by fair minimum wages allowing a decent standard of living wherever they work. Collective bargaining remains the most effective way of guaranteeing fair wages and must also be strengthened and promoted in all the Member States. We therefore welcome the Commission's recognition that there is scope for EU action to promote the role of collective bargaining in supporting minimum wage adequacy and coverage."
President of the study group which drafted the opinion, Séamus Boland (Diversity Europe Group), said: "I believe this opinion will provide a high level of value to the many discussions across all EU member states on the subject of minimum wages. It asserts the value of social partnerships as well as ensuring that all relevant stakeholders are included. The opinion emphasises the need to guarantee proper dignity and respect for all workers, especially those employed in lower paid jobs in our economy. I believe that the EESC can be proud of the work done in completing this opinion and I encourage all stakeholders to read it.”
The Commission launched the first phase of the social partner consultations in January 2020, setting out a number of ways in which EU action could prove beneficial in enabling all EU workers to earn a living wage.
In June 2020, the second-phase consultations were launched, with the Commission spelling out the policy objectives of a possible initiative: ensuring that all workers in the EU are protected by a fair minimum wage which provides them with a decent standard of living wherever they work. At the same time, the Commission said that access to employment would be safeguarded and the effects on job creation and competitiveness taken into account.
While preparing the opinion, the EESC held virtual consultations with stakeholders from five countries, chosen on the basis of their minimum wage setting mechanisms, which are included as annexes to the opinion. The stakeholders were sent a survey, the results of which were also included in the opinion.
The EESC also held a virtual public hearing which included contributions from Commissioner for Jobs and Social Rights Nicolas Schmit, several MEPs and members of some of Europe's top network organizations representing employers, workers and other civil society organizations, such as BusinessEurope, the European Trade Union Confederation (ETUC) and Social Platform.
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