The euro zone has started 2013 in the same vein it ended 2012: in recession. The 17 members of the single currency bloc combined registered a 0.2-percent drop in GDP in the first quarter — the sixth in a row — and although southern Europe remains the millstone around the confederation’s neck, France has also slipped into recession while Austria and Germany are a step away from that category. “We have to do more, and more quickly,” said the president of the European Commission, José Manuel Barroso.
Spain and Italy suffered the greatest contractions of 0.5 percent apiece, Eurostat said.
Youth unemployment is one of the greatest challenges facing the bloc, prompting France and Germany to join forces to combat the issue. The leaders of the two largest economies in the EU are due to meet on May 28 in Paris at the launch of a plan backed by the European Investment Bank to tackle the problem on a continental scale. Spanish Prime Minister Mariano Rajoy will also attend.
Youth unemployment in the euro zone stands at around 25 percent, while in Spain and Greece the figure tops 50 percent.
The proposal is based on the use of a six-billion-euro fund set up in February as part of the European budget to obtain up to 60 billion in soft loans to be awarded to companies who hire people under the age of 25. The plan is to run between 2014 and 2020 and will be officially presented after the Berggruen Institute conference later this month, involving intellectuals, economic and political leaders from across the globe.
BEI president Werner Hoyer said his institution intends to do all it can to alleviate youth unemployment in the euro zone by “linking favorable lending conditions to the creation of jobs for young people.”
“We can only create sustainable growth if we don’t repeat the errors of the past, and naturally we must put a stop to youth unemployment as quickly as possible, and we will achieve this with all the instruments at our disposal,” said Germany’s Finance Minister Wolfgang Schäuble.