The head of the European Central Bank has made a proposal to all EU leaders, suggesting that they adopt a growth pact that he says will end the youth unemployment crisis and aid the struggling economy.
This newly suggested strategy aims to stimulate economic growth in Europe, with a key part of the strategy depending on labour market reformation. The proposal is to restructure the labour market so that younger workers are not accounting for the majority of unemployment figures as they are currently. A criticism was made of the current EU labour market saying it is ‘structured against young people’, the high level of regulation and job protectionism has made the labour market difficult to penetrate for youths as those who are already in a stable job position are likely to be there for a while.
Many EU countries are resisting against such labour market reforms as they fear that employers may take advantage of the crisis and use it to overlook worker protection rights, however many of these protections may be exactly what is preventing young people from gaining employment. The key message is that a more ‘flexible’ labour market with fewer protectionist schemes would open up a great number of employment opportunities for young people.
This idea of a European growth compact has gained more support in the last few weeks as economic data has shown the Eurozone economy to be weakening more than anticipated