More EU funding to fight unemployment: Youth Employment Initiative [European Parliament impact 2014-2019]

The European Parliament has traditionally been very supportive of EU funding for employment-related programmes. On different occasions, it has expressed concerns about the level of unemployment among young people, calling for the European youth strategy and concrete actions, endowed with adequate financial resources. This view was reiterated in its negotiating positions for each annual budget in the current multiannual financial framework (MFF, 2014-2020). Every year since 2014, the fight against youth unemployment has been one of the top budgetary priorities for the European Parliament. This priority was translated each time into concrete actions and expressed in the Parliament’s financial demands for adequate resources for the purpose.

One of the most important examples of this is the Youth Employment Initiative (YEI). Launched in 2014 as part of the agreement on the 2014-2020 MFF, the initiative supports young people living in areas with youth unemployment rates higher than 25 %. It finances the provision of apprenticeships, traineeships, job placements and further education leading to qualifications. Initially planned for the period 2014-2016, its financing was prolonged until 2020.

The Parliament closely followed the implementation and achievements of the initiative. In its position on the 2016 budget, it decided to propose new commitments in 2016 for the continuation of the YEI, whose entire financial envelope was frontloaded in the years 2014-2015. It acknowledged the significant contribution of the YEI to the fight against unemployment and recalled its determination to ensure that the necessary appropriations are made available in order to prevent a funding gap in its implementation. In its resolution on the 2017 budget, it insisted on the need to provide an effective response to youth unemployment across the Union and proposed to increase the YEI by an additional €1 500 million in commitment appropriations to enable its continuation. In the position on the 2018 budget, it decided to reinforce the YEI beyond the level proposed by the Commission. The commitment appropriations totalled €350 million, in line with the Parliament’s reading of the budget and up from the €233.3 million initially proposed by the Commission. Finally, in the negotiations on the EU annual budget for 2019, Parliament stressed that young people are the most at risk of poverty and social and economic exclusion and decided again to reinforce the YEI beyond the level proposed by the Commission. As a result of the Parliament’s efforts, the Commission’s proposed allocation, confirmed in the Council’s position and amounting to €233.3 million, was significantly increased to €580 million.

On the basis of YEI results (around 1.6 million young people included in supported measures by the end of 2016) and in view of the persisting challenges, the mid-term revision of the MFF endowed the YEI with a specific allocation of €1.2 billion (and a corresponding amount from the ESF) for the 2017-2020 period. The continuation of YEI was strongly supported by the Parliament and agreed in the framework of the mid-term revision of the MFF in 2017.

Budgetary powers

The European Parliament and the Council of the European Union are the two arms of the EU budgetary authority. However, their powers differ in the various pieces of legislation underpinning the EU finances system. The legislative powers of the Parliament with regard to the EU budget vary depending on whether it is acting in the context of the annual budgetary procedure, the decision on the design of the EU own resources system or the establishment of a multiannual financial framework (MFF). The Parliament also has powers of scrutiny of the implementation of the budget and is discharge authority.

For the annual budgetary procedure, the European Parliament acts on an equal footing with the Council. The decision on the design of the own resources system requires the unanimity of the Member States in the Council after obtaining the opinion of the European Parliament. In order to adopt the regulation on the MFF, the Council must obtain the European Parliament’s consent beforehand, while the Parliament gives discharge on the implementation of the annual budget after obtaining the recommendation of the Council. Finally, the European Parliament, together with the Council, and in accordance with the ordinary legislative procedure, decides about the principles and rules governing the establishment, implementation and control of the EU budget. These are included in a regulation known as the financial regulation applicable to the general budget of the Union.

Read the complete study on ‘The power of the European Parliament: Examples of EP impact during the 2014-19 legislative term‘ in the Think Tank pages of the European Parliament.