Youth unemployment still too high: Draghi

The head of the ECB has said youth unemployment across Europe remains far too high despite the marked economic recovery from the depths of the financial crisis.

Speaking to students at TCD in Dublin, Mr Draghi urged EU governments to adopt a package of measures such as training, reforms and “a uniform degree” of safeguards for workers to deal with unemployment blackspots that blight a number of countries.

Dubbed the saviour of the euro following his pledge of 2012, Mr Draghi told an audience that included Central Bank officials and governor Philip Lane, that employment prospects for young people have worsened considerably since the 1970s.

Elevated levels of youth unemployment in countries, including Ireland, have fallen since the recent crisis but remain too high.

“In 2016, around 17% of people between the ages of 20 and 24 in the euro area were neither in employment, education or training, with Ireland being close to this euro area average. In Greece and Spain, the numbers are 23% and 21% respectively,” he said.

The CSO yesterday released its latest quarterly employment survey which suggested that the previously strong surge in the rate of employment growth may be slowing.

Eleven of the 14 areas of the economy the CSO tracks in its Quarterly National Household Survey posted employment gains, but employment only rose by 3,300 in the second quarter this year from the first quarter, a gain of 0.2%.

The survey confirmed the strong rise in telecommunications and building jobs, but agriculture jobs posted a strong decline in employment.

Unemployment which fell to 6.2% now matches the unemployment rate in early summer in 2008, a time when the property and banking crisis was taking a hold. It was estimated to be at 6.1% in August.

Youth unemployment, which is defined as the number of unemployed 15-24 year-olds, fell to 16.5% from 19% in the past year, the CSO said.

But in his speech, Mr Draghi also highlighted the success of Austria and Germany in keeping youth unemployment at low levels by offering vocational training for “disadvantaged youth”.

Commenting on the CSO figures, Davy chief economist Conall Mac Coille said the quarter-on-quarter employment gain was “modest”, and had expanded at the slowest rate “for some time”.

But he said there was little evidence from other survey data, and the CSO quarterly figures were “probably just a blip”.

Alan McQuaid, chief economist at Merrion Capital, said the overall employment numbers were “good” but that there are questions about whether the jobs that are being created are “quality” high-paying jobs.

Simon Barry, chief economist at Ulster Bank in the Republic, said the CSO figures were “somewhat disappointing”.

“While this still represents a very healthy pace of jobs growth, the apparent loss of momentum naturally raises some questions about the health of the jobs recovery,” he said, adding that employment growth in the Republic was outperforming other eurozone countries.

The eurozone is growing rapidly, according to official and survey data. In his speech, Mr Draghi said house prices were rising in Irish cities like some others in the EU but there was no evidence of an asset bubble.


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