Showing posts with label European Union. Show all posts
Showing posts with label European Union. Show all posts

Tuesday, 2 July 2013

Angela Merkel: youth unemployment is most pressing problem facing Europe

In interview with the Guardian, chancellor promotes merits of Germany's dual system of schooling and work experience, and says she regrets impact of eurozone crisis on young people
Angela Merkel has said youth unemployment is the biggest crisis facing Europe and urged other governments to do more to copy the German system – concentrating on apprenticeships and not simply academic study – to prevent the emergence of a "lost generation".
In an interview before a summit to tackle joblessness among young Europeans, the German chancellor said her country's tried and tested dual system – a mix of classroom learning and on-the-shop-floor work experience – was the best way forward at a time when almost six million under-25s in Europe are out of work.
"Youth unemployment is perhaps the most pressing problem facing Europe at the present time," she told the Guardian and five other European newspapers. "We in Germany have learned a lot from successfully reducing unemployment by means of structural reform since reunification and we can now bring that experience to bear."
Twenty European Union heads of state and all of the bloc's 28 labour ministers have descended on Berlin to hammer out concrete measures to deal with the problem. Economists say the young generation faces the very real prospect of ending up worse off – materially, professionally and socially – than their parents because of the evaporation of jobs in Europe.
Hundreds of twentysomethings have told the Guardian of their endless job frustrations: receiving rejections because they are overqualified, writing scores of unanswered letters, unable to build a life without a job to structure it around.
Merkel has been blamed for compounding the situation by insisting that southern European economies balance their books rather than spend money on job-creating policies. But she dismissed the suggestion that her jobs drive was a way of boosting Germany's poor public image abroad three months before she faces a general election.
She said the Berlin conference on Wednesday was about best practice, pointing out that Germany had halved its youth unemployment since 2005. "We are now in a position to offer a place on a [dual system] training programme to every young person who wants one," she said. "That wasn't always the case … One thing that experience taught us is that there is of course no need for any country to introduce the whole dual system straight away. Inter-company vocational training can be an alternative.
"We should not just try to make our young people more academic," she said. "Germany is seeing the positive effects of skilled workers and master craftsmen having an excellent reputation too."
Angela Merkel is hosting summit in Berlin to tackle joblessness among young EuropeansMerkel exhorted young Europeans as well as employers to become more flexible, calling for greater mobility in Europe. She said that with language barriers often preventing mobility, she wanted to open up the Erasmus exchange programme to include vocational training.
Five years of economic crisis have prompted thousands of Europeans to migrate in search of work. Southern Europeans are now coming to Germany in record numbers, and Merkel quipped that while not all of them would enjoy the conditions offered to the Spaniard Pep Guardiola as Bayern Munich's new coach, they would be given good chances in Germany.
"We have no intention of expanding the low-wage sector, as there is a great demand for skilled workers, which cannot always be met by Germans, although they remain of course our first priority. To reiterate, Europe needs a more mobile labour market. To that end, the way students and academics move around the single market as a matter of course could be better reflected among skilled workers."
Last week Europe earmarked an extra €6bn to tackle youth unemployment. However, Merkel said: "Money alone won't be enough. We will need intelligent reform."
She stressed that contrary to widespread accusations that Germany was trying to impose its ideals and economic models on souther European countries, she did not expect everyone to conform to the strict German model.
"It's absolutely fine for a country to want to structure its economy in a completely different way to Germany's," she said. "I'm always pleased to see different roads leading to success. But what nobody can negate is the need to be competitive and to work for and earn prosperity. When I look at Italy, Spain or Greece I do see very different, successful industries.
"What is crucial is that we all realise how much the world has changed. China, India, Brazil, South Korea and many other countries have been competing with us [Europe] for quite some time in areas we used to dominate … We either offer those parts of the world attractive and innovative products, or we resign ourselves to losing market shares and therefore prosperity, which is precisely what I do not want, either for Germany or for Europe".
Speaking on the sixth floor in the cuboid chancellery in Berlin, with its sweeping views over the Tiergarten park and the sea of cranes that continue to reconstruct the German capital almost 23 years since reunification, Merkel said it was up to governments to solve the problems so as to prevent the social unrest that has been increasingly visible on the streets of southern European towns and cities in recent years.
"When things start to become dysfunctional, it is the job of politicians to remedy the situation. Youth unemployment has been much too high in some countries for many years and now the crisis has driven it even higher. That is unsustainable in a continent with an ageing population. We must not allow there to be a lost generation".
Merkel said the plight of young people was one of her major regrets about the crisis. "I am sorry that it is often those who had absolutely nothing to do with those wrong turnings, the young or the poor, who bear the brunt of the hardship today … It is highly regrettable that parts of the economic elite assume so little responsibility for the deplorable situation."
Highlighting another cultural difference between the approaches taken to the crisis by Germany and other parts of Europe, Merkel said the word "austerity" had entered her vocabulary for the first time only after the crisis had been well under way, as she preferred the term "sound budgeting".
"I see no dichotomy between sound budgeting and growth," she said. "The road we have now started on is therefore the right one, with budget consolidation on one side and fundamental structural reform on the other. That is what will bring sustainable growth."
Asked whether she had ever personally faced the worry of being out of work, Merkel – the daughter of a protestant pastor who moved his family to communist East Germany when she was six weeks old – said: "Fortunately not. In the first few years when I became a politician, I did sometimes think about what I would do if my political career suddenly came to an end.
"I imagined running a jobcentre," she said. "It's a pleasant task to help people find work."
She said her experience as an MP since 1990 in the northern state of Mecklenburg-Vorpommern, where the unemployment rate has dropped from 25% to 10% in recent years, had taught her how important it was to have experienced advisers on hand helping young people on a local level. "The [young people] need both to be given hope and to be pushed into investing their own energies … that can't be done centrally by Madrid or Berlin."
So has she now, on a far grander scale than she might ever have imagined, finally fulfilled her wish by becoming Europe's jobs tsar?
"No," she answered, appearing faintly annoyed by the question. "My task is to set the right political course in Germany and alongside my colleagues in Europe."
Article Source : http://www.guardian.co.uk
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Friday, 28 June 2013

Payday loans market faces competition inquiry

Office of Fair Trading suspects payday lenders of preventing, restricting or distorting competition
The Office of Fair Trading has referred the payday loans market to the Competition Commission, saying there are deep-rooted problems with the way competition works and that lenders are too focused on offering quick loans.
The regulator said variable levels of compliance with credit laws and guidance meant firms that invest time and effort to comply were at a competitive disadvantage.
The referral follows a year-long review of the sector which exposed widespread evidence of irresponsible lending and breaches of the law, which the OFT said were causing "misery and hardship for many borrowers".
Although lenders say their high-cost loans are designed to be taken out over short periods and that annual interest rates of often more than 4,000% are not a fair indication of the cost, the regulator found companies were making up to 50% of their money from customers who extended or rolled over loans or incurred late payment charges.
Announcing the referral, the OFT highlighted several features of the £2bn market, which it said might be preventing, restricting or distorting competition:
• borrowers using payday loans have "poor credit histories, limited access to other forms of credit and/or a pressing need to borrow", which could be weakening competition on price
• lenders are using practices which make it difficult for consumers to identify and compare costs
• there are barriers to switching when loans are rolled over.
It also expressed concern about the focus on quick loans, which it said compromised affordability checks and meant competition was on the basis of speed rather than price. Too many people were being granted loans they could not afford to repay, and there was no incentive for lenders to cut interest rates.
The OFT's chief executive, Clive Maxwell, said: "Competition appears not to be working properly in the payday lending market, allowing firms to profit from making loans that cannot be paid back on time. We have seen evidence of financial loss and personal distress to many people.
"The Competition Commission can now conduct a detailed investigation to get to the root causes and, if necessary, use its far reaching powers to fix the payday lending market."
In March, lenders were given 12 weeks to reform and notify the OFT of the changes they had made. The final deadline is the end of July, and the regulator said it was still waiting for 30 of the 50 lenders to respond.
In the runup to Thursday's announcement, three lenders had opted to leave the market, but that figure has since increased to five. Two have left the credit market; the other three have left the sector.
The OFT said payday lending would remain a top enforcement priority until it handed regulation of the sector to the Financial Conduct Authority (FCA) in April 2014.
It said by referring the market now, the commission would be able to provide the FCA with a sound evidential basis on which to develop its rules and apply its new powers after it took over responsibility.
The Consumer Finance Association (CFA), the trade body for some of the largest players in the industry, including The Money Shop, Cash Converters and QuickQuid, said it would have liked the referral to have been deferred.
Its chief executive, Russell Hamblin-Boone, said: "The CFA and its members have always supported well-designed, well-implemented regulation in order to protect consumers and drive up standards. However, no other sector has faced such intense scrutiny in such a short space of time.
"We would have preferred the inquiry to have been deferred to allow the significant improvements that lenders have made to take effect before the industry faced further judgement. We urge the Competition Commission to take this into consideration during its inquiry."
Debt charities and consumer groups welcomed the announcement but urged the OFT to continue to scrutinise the market.
The executive director of Which?, Richard Lloyd, said: "People under financial pressure being given high cost loans in minutes without proper affordability checks is a recipe for disaster. This referral doesn't mean the OFT can now stand down, it needs to stay tough with lenders and continue to take early enforcement action against any company found to be lending irresponsibly."
On Monday the government will hold a summit on the industry between lenders, consumer groups and industry watchdogs to explore whether further regulator of the sector is necessary. A growing number of organisations have taken a stand against the industry, blocking adverts and even access to lenders' websites.
The Competition Commission has previously stepped in to shake up the home credit market. In 2006 it told doorstep lenders, who like payday lenders offer small, short-term loans, that they had to make charges more transparent and share data to make it easier for consumers to shop around and drive down prices.
Article Source : http://www.guardian.co.uk
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Monday, 24 June 2013

UK alcohol and tobacco prices among highest in EU

EU survey shows Denmark and Norway most expensive, with Macedonia cheapest – but Britain places well above average
Britain has some of the highest prices for alcohol and tobacco in the European Union and shoppers pay more than average for milk, cheese and eggs, according to official figures from the EU statistical office, Eurostat.
Booze prices in Britain are 43% above the EU average, while cigarettes cost 94% more and are the third highest in the EU, only just behind Ireland and Norway.
Inside the EU, Denmark has the highest overall price level but Eurostat, which surveyed an additional 10 non-EU members in Europe, found that Norway is worst for costs, while Macedonia is cheapest.
General food and non-alcoholic beverage prices in Britain are 4% above the EU average, and milk, cheese and eggs are 7% more. However bread prices are 11% below the average for Europe.
The average figures for the EU include prices in the newer members such as Romania and Bulgaria. Compared with the major western European countries, such as France and Germany, the UK's price level (apart from alcohol and tobacco) is favourable.
For example, average food prices in Italy are significantly higher than in Britain, while in France meat costs 23% more than in the UK, and in Germany 28% more.
Among the major economies, Spain is best value. In almost every category, its prices are about one-tenth lower than the EU average, and nearly a quarter below the price level in France. For example, meat in Spain costs one-third less than in France.
But other countries that went through a boom and bust following their entry into the euro still have very high price levels. In Cyprus, milk, cheese and eggs are 41% above the EU average, while in Greece, bread and milk are significantly pricier than average. In Ireland, despite a steep rise in unemployment and wage cuts, prices remain among the highest in Europe. The average Irish food price is 18% higher than the rest of the EU, and its alcohol prices are the highest in the EU barring Finland.
Norway remains the country where prices for almost everything are the highest in Europe and possibly the world. Average food prices are 86% higher than across the EU; milk, cheese and eggs are 114% more and alcohol is 188% higher.
In the former Yugoslav republic of Macedonia, home to Europe's lowest prices, alcohol is half the price of the UK, while food is 70% cheaper than Norway. Turkey has surprisingly high food prices despite having much lower average earnings than European countries. Average food prices in the country are 88% of the EU average, with milk, cheese and eggs 22% more.
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Article Source : http://www.guardian.co.uk