Monetary Easing Fails to Provide Employment to 25% Youth in Europe, Labour Market Reform Advocated

Seventeen years after their first jobs summit European Union leaders are divided on how to create employment and a fifth of young people are still out of work.

At a meeting in Milan on 7 Oct Italian Prime Minister Matteo Renzi plans to tout the new labor laws he’s pushing through. French President Francois Hollande will argue for more spending, a proposal German Chancellor Angela Merkel intends to reject. Britain’s prime minister David Cameron isn’t coming.

Their lack of progress may increase the frustration of European Central Bank President Mario Draghi who has faced down internal dissent to deploy unprecedented monetary easing. He’s calling on the politicians to do their bit now and loosen the continent’s rigid labor markets even if that means facing the ire of protected workers.

The 18-nation euro area is still struggling to heal its debt-crisis scars, five years after Greece revealed that its deficit was more than twice its forecast, forcing it into two bailouts. Across the bloc, growth has ground to a halt and inflation is at its lowest for five years.

Youth Unemployment

The Milan summit will focus on youth unemployment, which afflicts 21.6 percent of people under 25 across Europe, according to Eurostat. Even this number is almost identical to 1997, when it stood at 21.7 percent.