Spain on the backfoot in bid to tackle youth unemployment

Finding a fix for Spain’s youth unemployment crisis was never going to happen overnight.

But Spain took so long to jump on some of the help sent its way – namely a jobs scheme bankrolled by Europe – it risks not fully using a golden opportunity to help youngsters scarred by a deep recession, politicians, unions and jobseekers say.

With nearly 40 percent of under-25s still out of work, youth unemployment remains the biggest blot on four years of economic recovery that have earned Spain a spot as one of the euro zone’s star performers.

Yet a slow start to a European Union youth jobs and training programme has left Spain racing to spend 1.9 billion euros ($2.24 billion) of EU funds as deadlines to use them up near, three years after the financing was first allocated.

The sudden splurge has sparked accusations that the money is being wasted on ill-considered training courses and on job-seeker grants that may not induce firms to hire extra staff.

Madrid even wants to use the funds as a form of salary top-up for poorly paid youths, though Brussels has questioned whether it complied with programme guidelines and requested tweaks.

Spain now appears on track to spend its allocation, but there remains a risk that Brussels will not reimburse all of it. To claim back funds from the EU, it is not enough for Madrid to just disburse cash; it must also show that courses and job placements have been completed by year-end deadlines.

Madrid is confident that risk can be avoided, but some job-seekers and opposition politicians say the pace of spending in the meantime is becoming reckless and wasteful.

Spain’s Labour Ministry declined to comment for this story.

“This has turned into something where the (EU) funds have to be spent come what may, without really looking at whether … the measures are effective,” said Rocio de Frutos, a former labour inspector and lawmaker for the Socialists, the main opposition to Prime Minister Mariano Rajoy’s People’s Party.

Environmental studies graduate Ricardo, 25, said the only courses available under the EU-backed programme in his town of Segovia, in central Spain, were those he didn’t need, like learning English, or were too basic, he said.

But he did several anyway to keep himself occupied.

“It was completely useless. After going through this I just think this whole thing is a band-aid for a system that is completely sick,” said Ricardo, who declined to give his full name.

Spain’s approach to the EU scheme has also exposed broader structural flaws, critics say: a labour framework that is complicated to navigate, hampered by red tape and which offers little by way of tailored training or advice for job-seekers.

LOST TIME

The stakes for Spain are high.

Amid fears that a “lost generation” will remain locked out of the labour market even as a financial and property crisis fade, anger has turned against politicians, in an echo of other countries striken by high employment such as Greece.

Spain was the biggest beneficiary of the EU’s Youth Guarantee scheme, which EU leaders agreed on in 2013 and which was initially backed by 6.4 billion euros in funds to get young people into work.

A Reuters review of spending data found Spain only distributed a tenth of its 1.9 billion euros allocation for the first 18 months, partly because it struggled to attract suitable recipients and to publicise the scheme through layers of national and regional government.

The big spending push began in mid-2016, putting Spain on course to meet terms set by the EU to use up just over 1 billion euros of that allocation by end-2017. But it must spend and account for the remaining 900 million euros by end-2018.

Stumbling blocks at a European level are partly to blame for delays to the scheme. States were supposed to give out their money first and then bill the EU – a tall order when Spain was under huge European pressure to slash its public deficit.

Spain did not present a single Youth Guarantee bill to the EU between 2014 and 2015, while France, Portugal and Italy had already begun doing so.

A source at the ministry said that almost a year of political paralisis in 2016, following two inconclusive elections, had hindered any attempt to amend the Youth Guarantee scheme earlier because the government did not have full powers.

A European Commission official said Spain had made a slow start but the programme was now going well there.

“We see that joint efforts delivering the Youth Guarantee are now bearing fruit,” the official said.

Some of the scheme’s users also praise its benefits. But early hiccups mean some potential jobs never materialised at a critical time, just as Spain was emerging from recession.