Mr. Robert Strauss:

I thank the members for the questions. Deputy Lyons asked what I thought of Professor Mitchell's ideas. My Commissioner is certainly interested in them. Deputy Lyons probably saw him in the room, and he was responsible for Professor Mitchell attending.

The idea of offering everybody who wants it a job provided by the state is essentially what Professor Mitchell is saying. He states people should not be unemployed and if they cannot find a job in the normal sector, the state should provide it. He gave many examples of work that needs to be done in communities, local authorities, etc.

These are interesting ideas. The ideas that people should not be distanced from the labour market, and that it would be much more useful if they are productive rather than unproductive, are very interesting. However, there are some provisos. It has been tried in India and, perhaps, South Africa. Their labour markets and economic situations are very different from Europe. In saying it has worked in practice, it has worked in India where there is massive underemployment in rural areas and it is a different sort of problem from what Europe faces.

The idea of youth guarantees was mentioned by the Chairman and Deputy Tóibín. The Commissioner has long advocated a youth guarantee so that all young people within, let us say, four months of leaving education would either be in employment or offered training or education. The Finns have recently instigated such a guarantee. It seems to be working in Finland but, of course, the Finnish economy was not hit so hard by the crisis. In a country such as Spain, for example, it may be a real challenge to get all the young people who are not working into another programme. Frankly, one sees every reason for training, conversion or something, but there is no point in doing training only for the sake of it. It must be useful, proper training. It is a real challenge for public employment services or others to make the youth guarantee useable, but we certainly favour it. The Commissioner has long said so. In some countries, such as Finland, it works.

Another term for job retention is short-time working. I agree that Germany, and also the Netherlands and Belgium, used it in the first phase of the crisis. The Commission and the OECD do not always agree but we did on this. The Commission stated this was an important element in allowing these countries to weather the crisis to keep a workforce well in touch with jobs. When recovery happened in those countries, companies had the workforce readily available. The problem is if the scheme is extended for many years. Then it becomes an expensive scheme, both for the companies and for the state. A little like my answer as to whether Professor Mitchell's idea is a good one, it has elements that can work but one of the dangers of short-time working schemes or job retention schemes that go on too long is that one can stop the economy adjusting. Economies need to adjust. Some companies cannot go on for ever. The car sector was one of the major users of short-time working schemes. That is fine if the car sector picks up again, but various persons suggest that overcapacity in the automotive sector in Europe is quite high. Does one really want to pour money into preserving jobs in a sector that has overcapacity? It is tricky to know which jobs one needs to support. If one could guarantee that in 12 or 18 months demand would pick up again, then it is excellent but it is not always easy to get it right.

There was a question about whether money from Structural Funds goes to those countries where unemployment is high.

Unemployment rates are not one of the official criteria for divvying out the funds at the beginning of the seven year period. The official criteria are based on wealth in terms of GDP compared with the European average, so the poorest regions and countries of Europe get most per head. However, interestingly, most of those countries which have been most severely hit by the crisis were already poorer than the European average, so Greece and Portugal were already big recipients of European Structural Funds and at least have Structural Funds to offset some of the problems of the fiscal consolidation measures they are currently applying.

Ireland was in the middle. It had done rather well at the end of the decade before last, and so was probably getting slightly less proportionately, but it is at least a beneficiary of ESF money. Germany is rich, does not need the money, does not have unemployment and, therefore, gets very little money. Perhaps coincidentally or fortuitously, most of those countries which have severe unemployment problems now, including Spain, actually get a lot of regional or social fund money.