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EU leaders decided on Monday that the only way to overcome the debt crisis is not with fiscal cooperation alone, but with labour market reforms that are aimed at stimulating growth and jobs.
"Growth and employment will only resume if we pursue a consistent and broad-based approach, combining a smart fiscal consolidation preserving investment in future growth, sound macroeconomic policies and an active employment strategy," the EU leaders stated.
The 2012 figure for economic growth lies at just 0.5% for the Eurozone countries, which generates 16% of global economic output. This compares with growth of 1.5% in 2011 and 1.9% in 2010, according to Reuters. These are not encouraging growth rates and the International Monetary Fund claims that another recession for 2012 is likely.
To avert the economic crisis, EU leaders have announced plans to tackle the high youth unemployment rates by offering school leavers “high-quality” education, apprenticeships, or traineeships that will make them more employable in the future. While the official statement kept quiet on how exactly this can be achieved, it is likely that individual countries will create national plans that will then be monitored and funded by the EU.
Youth unemployment is particularly high in Spain where almost 50% are out of work, something which is closely followed by Greece’s 35% unemployment figure amongst young people. Only Germany can boast a relatively low youth unemployment rate with 8%.
The EU will also refocus its attention on small and medium-sized companies to create more jobs and boost the economy as these firms generate almost 60% of the EU's gross domestic product.
The French President Nicolas Sarkozy recently announced his plans to implement new labour reforms in France that will similarly create more jobs and aid the rather inactive economy.