The jobless generation: Europe

John Springford of the CER, warns that the nature of the crisis will have far-reaching effects. "Even in good times the rate of youth unemployment is higher than for older people, but the time spent out of work is usually short. Now the rate is much higher, and young people are out of work for much longer periods." This means governments are burdened with a big unemployment- benefit bill in the short term. But it will also drag on Europe’s economy in the future." "The evidence shows that people lose skills and motivation – and are more likely to succumb to depression, substance abuse and crime – the longer they are out of work. So they will be less productive, and there will be more government spending needed to tackle the social consequences." He argues that while the EU does recognise the problem, it doesn’t have the muscle to resolve it. "It has announced more money for training and job-guarantee schemes, but it’s tiny: €8.3 million. The commission can only try to persuade member states to act, as its budget is so small. And as member states are cutting budgets, with pressure from the EU to do so, it’s likely that unemployment will rise in the short term in countries in distress." So how to prevent Europe’s jobless youth from becoming discontented, disenfranchised and devoid of hope? "More investment in education is necessary – or, at least, the smallest cuts possible," says Springford. "Then young people can ride out the recession and build skills for the future." Some of the money could come from reducing spending "on things that don’t boost economic demand in the short-term, like pensions tax relief".