Accelerated pre-financing for the Youth Employment Initiative: Questions and Answers
Why increase the pre-financing rate?
The Youth Employment Initiative (YEI) followed a proposal from the Commission and a high-level political call from the European Council of February 2013 to address unprecedented youth unemployment in certain regions of the European Union (EU). This and subsequent European Councils stressed that the highest priority should be given to promoting youth employment. The European Council called for the EU budget to be mobilised to support Member States' efforts in counteracting this trend.
A dedicated budget has been set aside for the YEI worth 3.2 billion, which requires no co-financing at national level. An additional 3.2 billion will originate from the ESF allocations to the Member States for the 2014-2020 programming period.
Given the immensity of the challenge, with over 7 million young Europeans without a job and not in education or training, it was decided that resources allocated to the YEI should be committed (frontloaded) in the first two years of the 2014-2020 period, to allow speedy and substantial mobilisation of youth measures, and for immediate results. Any further delays in implementation are likely to compromise actions undertaken by Member States to combat youth unemployment.
The initial pre-financing amount set out in the rules for the European Social Fund (ESF) operational programmes (OP) in whose framework the YEI is programmed equals 1% of the total allocation (or 1,5% for Member States under financial assistance). This amount is automatically transferred after the adoption of each operational programme. Afterwards, interim payments to the Member States can only be made as a reimbursement for the expenditure already incurred. As usual, governments pre-finance projects nationally before being reimbursed from EU funds.
This rate has proved to be inadequate for the YEI, in particular as the YEI budget is frontloaded to 2014 and 2015 and it has to be absorbed at a faster rate than the ESF. The budgetary constraints faced by Member States and the lack of available funding at the initial stage of the programming period have caused delays in the implementation at national and regional level. Many countries have raised the issue that they don't have the national budget necessary to pay advance funding to projects working with young people.
Therefore, it is appropriate to exceptionally set out, through today's legislative proposal, a higher pre-financing rate for the 3.2 billion YEI specific allocation in 2015, in order to ensure quick mobilisation of the funds. The increased pre-financing will thus amount to around 1 billion euros (30% of the specific allocation) instead of the original 1-1.5% of the specific allocation.
This increased pre-financing would provide the maximum impact in terms of support to the beneficiaries, within the budget available. It would mean significant increases for the Member States implementing the YEI, as illustrated by the table below:
Specific allocation to YEI
Pre-financing originally foreseen from the YEI specific allocation in 2015 (without increase)
Extra pre-financing from the YEI specific allocation in 2015 (after increase)
When the corresponding pre-financing from the ESF matching support is added to this increased total of 963 million euro for the specific allocation, the total pre-financing that Member States will receive in 2015 for YEI will amount to 996 million euro,or nearly 1 billion. This is a significant resource that can immediately be mobilised to support the roll-out of the YEI-supported actions.
It is very important that Member States transfer this advance funding directly towards project beneficiaries to allow for the quick roll-out of measures on the ground.
What other actions has the Commission already taken to speed up the implementation of the Youth Employment Initiative?
The Commission has from the outset put in place a number of provisions to speed up the implementation of the initiative as much as possible.
It is firstly important to note that the €6.4 billion allocated under theYouth Employment Initiativeis frontloaded so that all this money is committed in 2014 and 2015 rather than over the seven year period of the Multiannual Financial Framework. Moreover, expenditure on Youth Employment Initiative projects is eligible from 1 September 2013. This means that Member States are able to invest in the implementation of measures already since 2013, with the knowledge that the Commission will be able to reimburse them for such expenditure once the relevant operational programmes have been formally adopted and the Member State has sent a payment claim to the Commission.
France and Italy decided to dedicate an Operational Programme to using YEI funding for youth employment, which allowed for fast-track adoption by the Commission. The French programme was adopted on 3 June 2014 (seeIP/14/622) and the Italian one on 11thJuly 2014 (seeIP/14/826).
The Commission services have given priority to the adoption of all the Operational Programmes having a YEI component. Currently 28 out of the total of 34 operational programmes (some Member States have more than one programme) containing YEI funding have already been adopted in 2014, and additional four are finalised and pending adoption. Thus already over 85% of the YEI resources have been committed by the Commission.
The Commission has also been supporting Member States in their design through technical guidance, with a number of actions such as constant contact with national authorities, a helpdesk to set up apprenticeships and traineeships and a technical level seminar held in July 2014 (IP/14/784).
In addition, an important share of the European Social Fund in 2014-20 is foreseen to be used for investment in young people.Beyond the €6.4 billion from the YEI, direct support specifically targeting young persons is also provided through an additional €6 billion from the ESF 2014-20 already allocated in the new round of operational programmes.
Member States should also be smart in making use of their national budgets. In itsAnnual Growth Surveyfor 2015, the Commission stressed that, in the context of growth-friendly fiscal consolidation, Member States should pay particular attention to maintaining or reinforcing expenditures dedicated to the coverage and effectiveness of employment services, active labour market policies and Youth Guarantee schemes.
The Commission is continuously working with Member States to speed the process up and has provided extensive support to implementation.
To make additional co-financing from Member States even more attractive, investment into projects co-financed through the Youth Employment Initiative in a Member State will be eligible to be accommodated within the Stability and Growth Pact under the Investment Clause of the Preventive Arm.
What kind of measures can Member States finance with the Youth Employment Initiative?
All YEI measures will target young people directly.
The measures supported through the YEI are set out in the Member States' operational programmes which are adopted by the Commission. As the needs in the different regions may be quite different, in their operational programmes each Member State / Region addresses the existing needs and ensures the implementation of the Youth Guarantee.
Examples of measures targeted to the individual young person:
- Direct support for high-quality traineeships and apprenticeships
- Provision of first job experience (placements for at least 6 months)
- Reduction of non-wage labour costs
- Targeted and well-designed wage and recruitment subsidies
- Mobility measures to bring skills and jobs together
- Start-up support for young entrepreneurs (mentoring and access to finance)
- Quality vocational education and training
- Second chance programmes
Funded projects could help young people find a job in fast-growing areas such as the digital economy. Demand for digitally skilled workers is growing by around 4% a year. According to estimations, there could be up to 825,000 vacancies for ICT professionals in Europe by 2020. The Commission is currently working towards a Digital Single Market which will create even more opportunities for Europeans: €250 billion of additional growth and thousands of new jobs in the next five years.
What measures are being planned in the countries with the biggest Youth Employment Initiative allocations?
In France, around 650 000 people under 25 are jobless and a million are neither in employment, nor in education or training (NEET). The YEI in France will support the implementation of the national Youth Guarantee to help those young people with worse chances in the labour market. Actions include counselling and training the less-skilled; enabling mobility of apprentices at regional, national and in some cases cross-border level; helping to prevent early school-leaving and better identify young NEETS, and giving a second chance to those who left school without any diploma or qualification to gain a foothold in the labour market through work experience or traineeships. Public Employment Services have a crucial role to achieve these aims and the national operational programme will be an opportunity to improve their outreach to young NEETs.
In PolandYEI is implemented in the framework of the national Operational Programme which allows for a nation-wide development of educational-professional activation measures aiming at the integration of youth in the labour market, including those with disabilities. The target group of YEI in Poland has been extended to cover young people aged 24-29 based on the fact these youngsters are in a more difficult situation than the 15-24 group. Since the lack of experience and skills mismatch in the labour market were identified as the main causes of youth unemployment in Poland, the YEI will primarily support internships, training and other types of continuing education helping in successful integration to the labour market. Development of entrepreneurship, self-employment and geographical and professional mobility will also be financed.
In Italythe YEI Programme contributes to the implementation of the Youth Guarantee, extended in Italy to people aged up to 29 and is expected to involve 1.72 million young NEET. Beneficiaries will be offered a personalised approach through a variety of actions: information and guidance; vocational training; work placements; apprenticeships; traineeships; promotion of self-employment; transnational and territorial professional mobility; a civil service scheme. Participants will be asked to sign individual agreements when enrolling. The latest report from 8 January indicates over 364.000 registered people out of which 127.000 have had the first interview. Firms have made 39.313 job places available.
In Spainthe Programme covering the YEI foresees actions in all Spanish regions for young people not in employment, education or training (NEET). Young persons up to 25 years, and in case of a recognised disability up to 29 years, can participate in actions aiming at their activation as learners and job searchers, the acquisition of skills that can improve their employability, starting a sustainable entrepreneurial activity or finding stable employment. Beneficiaries will be offered a personalised integrated pathway through measures that will include second chance school programmes, dual vocational training programmes, trainings leading to a professional certificate, national and transnational mobility programmes, entrepreneurship support measures, traineeships or hiring subsidies linked to indefinite contracts.
In Greece, the YEI programme tackles youth unemployment by focusing on creating quality education opportunities, skills upgrading and sustainable employment for all and with a view to enhance social cohesion. A set of YEI supported interventions focus on young people aged 15 to 24 years via apprenticeship schemes, traineeships, actions to obtain work experience, start- up support for young entrepreneurs and integrated actions, to select the appropriate intervention.For young people aged 24-29 years the YEI supports specifically actions to obtain work experience and start- up support actions for young entrepreneurs. The proposed interventions of YEI are expected to promote employment including self-employment and improve skills and work experience of young people not in employment, education or training in order to support their integration or re-integration in the labour market.
In Portugal, around 280 000 young people (aged 15-29) are neither in employment, education or training (NEET). This corresponds to 16% of all young people in Portugal. The YEI in Portugal will support the implementation of the national Youth Guarantee to help young people NEET aged 15 to 29 to find a job or a qualification offer. By supporting both those with worse chances in the labour market, as well as those with high qualifications that have been striving to find a job, the YEI will contribute to increase the job opportunities of the young people in Portugal and it will also address the increasing problem of "brain drain". Actions include counselling activities, training; apprenticeships, traineeships, including at cross-border level; second chance programmes, hiring incentives and self-employment incentives.
In CroatiaYEI will be implemented in the framework of the ESF Operational Programme "Efficient Human Resources 2014-2020" with the YEI specific allocation of EUR 66 million and the ESF corresponding support of EUR 66 million amounting to EUR 132 million. Young people in Croatia are in a particularly unfavourable position in the labour market, with the unemployment rate for 15-29 age group of 35.2% in 2013, and a NEET rate of 20.9%. One of the key issues is the lack of working experience. Croatia will allocate YEI funds on active labour market policy measures with particular focus on acquiring the first working experience, return to education and support for entrepreneurship aimed at young people aged 15-29. Key results expected to be achieved with the YEI funds include increasing stable and sustainable employment and self-employment level of unemployed youth, especially long-term unemployed NEET as well as their employability, providing necessary working experience, skills upgrade and practical skills attainment.
In Belgium, the YEI is implemented through two OPs (Wallonia-Brussels and Bruxelles-Capitale), both containing an axis specifically dedicated to young people, which includes the YEI as a means of implementing the broader objectives of the Youth Guarantee. In the Wallonia-Brussels OP, the actions towards young people, and NEETs in particular, will aim at offering professional experience, specific training courses combined with work, and, among others, better managing the transition between school and professional life. Concrete projects will also address school drop-out and early school leaving. In the Bruxelles-Capitale OP, supported actions will include coaching support for young people. Projects will also provide concrete offers for employment, training and internships. It is to be noted that the Bruxelles-Capitale OP also includes specific projects, in collaboration with the Flemish Region, for the Dutch-speaking young people and NEETs of the Brussels Region.
In Romania, the YEI is implemented in the framework of the national Operational Programme for human capital development, expected to be adopted in February-March 2015. With a share of young people not in employment, education or training (15-24) higher than the EU average (17.2% for 2013, compared to an EU average of 13%), Romania has chosen to support from EU funds both the regions eligible for YEI and the rest of the country. The measures offered to young people envisage personalised integrated packages, depending on the profile of the young NEETs. The measures can include counselling, orientation, training - including vocational training, support for finding a job, apprenticeships, support to young NEETs for setting up companies and entrepreneurship counselling, support for mobility of young NEETs to find a job in another region of Romania or incentives for employers to create jobs, apprenticeships etc. There are also dedicated measures aimed at outreaching non-registered NEETs, with a view to registering them with the Public Employment Service and offering the support in the framework of the Youth Guarantee.
What is the link between the European Social Fund and the Youth Employment Initiative?
The ESF Regulation already contains a specific investment priority on sustainable integration of young people not in employment, education or training, into the labour market. All Member States having received a country-specific recommendation on youth in the context of the European Semester are expected to programme some ESF resources under this priority. These measures can cover a broader range than the YEI, including e.g. modernisation of services and structures to facilitate the implementation of the Youth Guarantee (for instance employment services that are in direct contact with the young people).
The YEI, on the contrary, including its ESF component, will target directly measures for individuals and in the regions concerned (NUTS 2 level, youth unemployment rate above 25% in 2012). The aim is to directly work with the young people to place them within or close to the labour market. Other ESF funds can be used to implement any structural changes needed to implement the Youth Guarantee (such as setting up a framework for apprenticeships or developing employment services to effectively deliver the Youth Guarantee).
What is the relationship between the Youth Guarantee and the Youth Employment Initiative?
The purpose of the YEI is to provide financial support for the implementation of measures supporting youth employment, notably the Youth Guarantee, in those regions that are worst affected by youth unemployment. Out of the 28 EU Member States, 20 Member States have regional that are eligible for YEI support.
As regards the Youth Guarantee, all 28 Member States are expected to fulfil the Council Recommendation on Establishing a Youth Guarantee in all their regions. For this purpose they have developed Youth Guarantee Implementation Plans which are financially supported by various sources, including the national budget, ESF funding and the YEI (for those 20 MS eligible for it).
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