France, Germany declare war on youth job crisis

PARIS (AFP) - France and Germany joined hands on Tuesday to confront a jobs crisis blighting the lives of millions of young people in the eurozone, saying that the key to creating work lies with small businesses.

"Give youth a chance," declared German Labour Minister Ursula von der Leyen at a conference in Paris preparing the way for a joint drive in a month's time to open doors for young people.

Opening the conference, French President Francois Hollande called for an "offensive" to avoid what he called a generational "rupture".

Unemployment among young people is a critical problem in many countries in the eurozone, particularly those enacting tough reforms to restructure their economies and reduce debt.

In some of these countries the unemployment rate among youth exceeds 50 per cent.

"We have to act immediately, six million youths are (officially) unemployed in Europe," MrHollande said, adding that "nearly 14 million are without work, not studying and are not apprentices."

French Labour Minister Michel Sapin said a blueprint - dubbed the New Deal by the media in reference to US president Franklin D. Roosevelt's Great Depression recovery plan - would target small and medium-sized businesses to create jobs.

"It is the small and medium businesses that create the most jobs for youth, it is them we have to support," Mr Sapin said, promising a "concrete and very strong initiative".

The German minister said: "Many small and medium businesses, which are the backbone of our economies, are ready to raise production, but they need capital. They can only access it at exorbitant rates. It's a vicious circle."

Mr Hollande said a complete plan would be presented at a EU summit on June 27 and 28.

"This plan must mobilise the private and public sectors and social partners... it must develop training programmes and ease mobility in Europe," he added.

The European Commission said this month in a forecast that the eurozone economy will likely shrink for a second year while unemployment will rise to a record 12.2 percent.

A Eurostat report on April 30 said that a total of 5.6 million people aged under 25 were registered as unemployed in the 27-member European Union in March, of whom 3.5 million were from the eurozone.

Germany has the lowest rate of youth unemployment in the European Union, with only eight per cent of the working population aged between 15 and 24 without work. In France the figure is 24 per cent, while it is more than 55 per cent in Greece and Spain.