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Post-Summit Briefing
Post-Summit Briefing

Monday, 01 July 2013

There was no ground-breaking outcome from this low-profile summit, the main aim of which was to convey the message that the EU is moving in the right direction while recognising the severity of the situation in some member states and expressing the desire to do more, said Janis A. Emmanouilidis, a Senior Policy Analyst at the European Policy Centre.

Emmanouilidis warned that EU leaders are lagging behind – and sometimes backtracking – in terms of progressing towards deeper Economic and Monetary Union, and expressed concern that this sense of drift may have become “the new normal” as the threat of a currency meltdown recedes.

The EPC analyst argued that investing in tackling youth unemployment is a politically opportune and conveyable means for EU leaders (and particularly for Germany) to show that they care. The so-called Youth Guarantee – which saw EU leaders underline that “all efforts must be mobilised” to get young people back to work or into education or training within four months of leaving school or becoming unemployed – is evidence of their ambition, he said.

The €6 billion to be allocated to the Youth Employment Initiative may sound like a lot of money but is just a drop in the ocean considering the magnitude of the youth unemployment challenge, Emmanouilidis warned.  He questioned whether it makes economic sense to attempt to target action specifically at fighting youth unemployment, suggesting that investing in boosting growth or completing the banking union may deliver better results in this regard.

Emmanouilidis believes EU leaders understand that there is no “silver bullet” that can solve all these issues, and suggested that they appear to be hoping that economic growth will kick in at the end of 2013 and in 2014, once structural reforms begin to deliver – in the meantime they are trying to buy time and cushion the initial negative effect of structural reforms.

He argued that the EU should either develop a more comprehensive strategy (a Marshall Plan or New Deal for Europe) or be more humble in its objectives. Last week’s summit did neither, he added.

Emmanouilidis concluded by warning that at the moment there seems to be more complacency and less readiness to go beyond the lowest common denominator, which could potentially produce a regression from “new normal” back to “crisis mode”.

Nikos Chrysoloras, Brussels Correspondent at leading Greek newspaper Kathimerini, outlined two possible future scenarios:

  • The measures taken will provide enough of a cushion to stave off crisis until growth returns in 15-18 months’ time.
  • An unexpected spark triggers the return of systemic risk.

He warned that the only way to achieve aggressive growth now is to take ambitious steps to restore the integrity and unity of the Single Market, for example by offering direct incentives for actors in the north to invest in the south.

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