The European Union and its member states have taken unprecedented, courageous steps for the stability of the euro, for sound public finances and to create the conditions for a sustainable recovery. We set up a financial backstop in the form of the European Stability Mechanism, with a firepower of 500 billion euro, and created much stronger European tools for economic governance. Bold action by the European Central Bank has been decisive in easing market tensions, though credit conditions for households and businesses remain difficult in many parts of Europe. And soon we will also have a single supervisor for banks in the euro zone and in other EU countries which decide to join.
But alongside stronger and deeper economic and financial integration, we must also continue to construct the social dimension of our Union. The crisis is having an enormous impact on many people’s lives.
Today, one of the biggest challenges we face across the European Union is unemployment, which at a rate of 10.9% – or over 26 million people out of work in the EU as a whole – is unacceptably high. Youth unemployment is particularly alarming, with an unemployment rate of 23.5%, more than 5.5 million young people cannot find a job. In countries like Greece and Spain the youth unemployment rate even exceeds a staggering 55%. In the UK, unemployment is 7.8% and youth unemployment stands at over 20%.
It is therefore no surprise that peoples' overriding concern is the economy: 9 out of 10 Europeans consider unemployment or the economic situation to be one of the top issues currently facing their region. Politicians must answer these concerns. The social dimension is the other side of the coin to economic and monetary union.
The European Union has placed the fight against unemployment at the heart of our crisis response. The "Youth Guarantee" as proposed by the European Commission and agreed by the Member States will make governments ensure that no young citizen is without job, apprenticeship or training for more than four months.
What we are still missing is a truly European labour market. How can we have a real Single Market in Europe and a common currency in the euro area, without full free movement of labour, alongside free movement of goods, services and capital? Our vision is of a European Union where all citizens can freely seek a job in any EU country, just as American citizens can do so between New York, Michigan and Austin.
Many EU citizens are still hesitant to look for a job in another EU country because they are worried about their situation if they do not rapidly find a job. Currently, people searching for job opportunities in another member state maintain their entitlement to financial support from their home country for a period of a minimum of three months, and in some cases for a maximum of six months. However, across Europe, it currently takes an average of 16 months for those out of work to actually find a job. Understandably, many people do not dare take the risk of looking for a job in another EU country, especially as more and more jobs are offered on short term contracts.
This represents a risk to growth and innovation in the EU economy: despite high levels of unemployment, the number of unfilled vacancies has been on the rise since and businesses face difficulties recruiting qualified staff. At the same time, people miss out on job opportunities in other countries and regions. This denies people a livelihood, could place a brake on economic growth, and creates unnecessary costs for already stretched social security systems.
Figures sometimes speak stronger than words: the GDP of EU-15 countries is estimated to have increased by almost 1% in the long term as a result of post-EU-enlargement mobility. For the EU as a whole, the GDP effect of recent intra-EU mobility flows is equivalent to a collective income gain of around 24 billion EUR for EU citizens. In today's world, labour mobility is therefore not a cost but an economic necessity.
And that is why enabling Europeans to benefit from job opportunities in other EU countries and contribute to the economy is at the top of the 2013 EU Citizenship Report that the Commission presented on 8 May. We will update the EU’s social security coordination rules to look into allowing citizens to continue receiving the financial support they are entitled to at home for longer than the current minimum three months period. Member states should also make full use of the current rules to allow jobseekers to receive their unemployment benefits for up to six months while looking for a job in another member state – and step up cooperation between public employment services to ensure effective help to jobseekers, wherever in the EU. This will be the test case for member states to show how committed they are to easing the effects of the crisis on citizens.
In parallel, we will make it easier for young people to find out about traineeships and apprenticeships in other EU countries through EURES – the European network of employment services – and its online jobs portal. We also want to guarantee them quality work placements by setting out a European quality framework for traineeships, making sure their rights are respected and they get the best out of their work experience.
In the European Year of Citizens, we are placing European citizens centre stage - to strengthen the EU and restore growth. The Commission is working to make EU citizenship a reality in people's daily lives – today this starts with tangible proposals to make it easier for citizens to work, study and train in another EU country.