German chancellor holds phony Jobs Summit

Record high levels of youth unemployment in Europe are to be used as the pretext for attacking the remaining social protections and past social gains of European workers. This was the basic message to emerge from the European Jobs Summit held Wednesday evening at the German chancellery in Berlin.

Just three days after the last official European Union summit in Brussels, heads of state and government, accompanied by their labour ministers, met in the German capital for a “conference to promote youth employment.” No concrete decisions were made at the meeting.

The gathering served primarily as a boost to the German chancellor’s election campaign. Angela Merkel is seeking to win a third term in office in parliamentary elections to be held September 22. Merkel used the meeting to pose as someone who cares about the future of the youth, in contradiction to her image as a hard-hearted protagonist of austerity.

In a lengthy interview published in the S üddeutsche Zeitung and several other European newspapers on the day of the summit, Merkel described youth unemployment as “perhaps Europe’s most pressing problem,” adding that it has concerned her for a long time.

In the same interview, however, she made it clear that she will maintain her relentless austerity policy, which has left one in four young people under 25 in Europe unemployed. None of the 6 billion euros allocated by the EU ostensibly to combat youth unemployment will be used to create new jobs. Instead, the money is to be used for so-called “structural reforms.”

“The path is correct,” Merkel said. “Fiscal consolidation on the one hand and basic structural reforms on the other. This creates sustainable growth.”

By “structural reforms” Merkel means the abolition of legal and contractual agreements that stand in the way of the unlimited exploitation of the working class—such as protection against unfair dismissal, regular working hours, minimum wages, contractual vacations and secure pensions.

Merkel’s model for such “reforms” is what “we in Germany have learned from successfully reducing unemployment by means of structural reform since reunification.”

Merkel was referring to Agenda 2010 and the Hartz laws, introduced by the Social Democratic Party and the Greens under Chancellor Gerhard Schröder, which have created a huge low-wage sector. Of 42 million employed persons in Germany, only 29 million have a job with social insurance. Four million earn less than €7 per hour.

Merkel made it clear that she wants to take advantage of the plight of the younger generation to attack the wages and conditions of older workers. It was “not wise to make labour law more flexible for young people in some countries but not for the elderly, who have worked for a long time,” she said. “In economically difficult times, this encourages youth unemployment.”

Unemployment in Europe has reached epidemic proportions, only partly reflected in official figures. According to official statistics, 25 million of the EU’s work force of 240 million were unemployed at the end of last year. This is a rate of 11 percent.

There are another 11 million who are unemployed but have given up looking for a job or are unable to take up work immediately. They are not counted in the statistics. If they were, the unemployment rate would jump to 15 percent.

A further nine million are working part-time and looking for a full-time job. They also do not appear in the unemployment statistics.

Finally, there are an unknown number of “overqualified” people who are working far below their skill and educational levels—such as university graduates who are driving taxis, waiting tables or shifting from one internship to the next. An Organisation for Economic Cooperation and Development (OECD) study from 2011 estimates the number of such “overqualified” workers in the EU at 65 million, i.e., more than a quarter of the labour force.

Given these figures, the measures announced by the EU to combat youth unemployment are farcical. In addition to providing some training, the EU plans to subsidize mid-sized companies that hire unemployed youth. This does nothing to create new jobs. Rather, it fills existing positions with people working for lower wages.

Against the background of 7.5 million unemployed young people, the six billion euros the EU plans to spend over two years is a drop in the ocean. Experts agree that EU funding for its promised “Youth Guarantee”—an offer for a job or further education—is completely inadequate.

Merkel’s cynical Jobs Summit has the full support of European Social Democratic parties. French President François Hollande, who is carrying out massive “structural reforms” at home based on the German model, is Merkel’s most important partner in this farce. In Germany, the SPD attacks Merkel from the right, accusing her of not continuing its Agenda 2010 with sufficient resolve.

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[21 June 2013]