The unemployment rate in the eurozone came in at 7.4% in May, as the region grapples with the economic shock from Covid-19.
It comes after a number of European economies took their first steps to reopen in May, which has allowed some workers to return to their jobs. However, the social-distancing measures that remain in place and ongoing travel restrictions are limiting the pace of the recovery.
The unemployment rate in the 19-member region rose to 7.4% — the worst reading since November last year. According to the European statistics office, the number means that 12.146 million people in the euro area were unemployed in May.
Youth unemployment, those aged between 15 and 24, also increased to 16% in May, from 15.7% in April.
Some economists are expecting much worse unemployment figures going forward as governments reduce benefit schemes. At the height of the sovereign debt crisis during the last decade, the euro area experienced an unemployment rate of just above 12%.
Speaking on Friday, European Central Bank President Christine Lagarde said the world may be past the worst of the pandemic, though she cautioned that there is a risk of a second wave of infections.
The ECB has forecast a contraction of 8.7% in eurozone gross domestic product for the whole of 2020, followed by a rebound of 5.2% economic growth in 2021.
Youth unemployment
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The 2020 figure is still more than double the average general unemployment rate. Now many fear a spike just ahead.
The European Union is helping EU countries tackle this challenge head-on by proposing:
 ©️ European Union, 2017 / Source: EC - Audiovisual Service |
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The EU is investing tens of billions of euros in powering the recovery plan for young people. Member States need to prioritize investments that can help young people in the short and medium-term.
A Bridge to Jobs: reinforcing the youth guarantee
If you sign up for the Youth Guarantee, you will receive an offer of employment, education, apprenticeship, or a traineeship within four months.
The EU created the Youth Guarantee in 2013 and has since built bridges to the labor market for more than 24 million young people.
The new and improved Bridge to Jobs will:
 Cover young people aged between 15 and 29 |  Be more inclusive, with a wider outreach focusing especially on disadvantaged groups |
 Link in with the needs of companies, especially SMEs, providing the skills required - in particular those for the green and digital transitions |  Provide tailored counselling, guidance and mentoring |
Future-proofing the EU’s vocational education and training policy
Vocational education and training (VET) help young people get ready for their first job and allow adults to learn new skills and develop their careers. It will be an essential part of helping young people enter the workforce during recovery. With its proposed Recommendation, the Commission is taking a fresh approach to vocational education and training, making it more modern, attractive, flexible, and fit for the digital age and green transition.
A renewed impetus for apprenticeships
Apprenticeships are a win-win:
- companies get the skilled labor force they need for the future
- young people develop their skills and find work
EU action will help boost apprenticeship offers, for example by incentivizing support to SMEs and mobilizing local and regional authorities. The European Alliance for Apprenticeships has been instrumental in creating more than 900,000 apprenticeship opportunities for young people since its launch in 2013. The Commission will renew it to trigger fresh commitments for digital and green apprenticeships.
The Commission also urges EU countries to step up youth employment support through Next Generation EU and the future EU budget. The overall ambition is that Member States invest EU funding of at least €22 billion in youth employment.
For example, the EU can help fund:
 | Start-up grants and loans for young entrepreneurs, mentoring schemes and business incubators |
 | Bonuses for SMEs hiring apprentices |
 | Training sessions to acquire new skills needed on the labor market |
 | Capacity-building of public employment services |
 | Career management training in formal education |
 | Investments in digital learning infrastructure and technology |