ILO calls for an employment-oriented Investment Plan for Europe

Employment and Social Affairs 9 February 2015 , by Newsletter European

In views of the discussions on the European Commission’s proposal for an Investment Plan for Europe, both at the European Parliament and Council level, on 28th of January the International Labour Organization has published a study entitled An Employment-Oriented Investment Strategy for Europe.

According to the report, the Commission’s proposal to stimulate investments goes in the right direction in order to boost job creation. Since the beginning of the crisis, in fact, the level of investments has been reduced and remained below the pre-crisis level in all the Union. Furthermore, according to the last European Commission’s projections, the GDP growth in 2015 is going to be lower than expected (1.5 points growth instead of 2 points).

The study calculated that 1,8 million of direct and indirect jobs can be created if the Investment Plan succeeds to attract private investment for a total amount of €315 billion.
In order for this to happen, it is crucial that the design of the program takes into account some important aspects. First of all, public investment projects should be selected on the basis of their potential attractiveness for private investment. Greater attention should be paid to Small and Medium Enterprises ensuring that they have access to credit and are included in the investment projects.
Second, the funds should be allocated according to the levels of unemployment of the Member States. This would allow a significant increase of employment (nearly 10%), especially in those countries where unemployment is more difficult to eradicate, and an important reduction of disparity among Member States.
Lastly, if less than 5% of the funds could be allocated on measures supporting complementary labour market policies for skills’ development, the outcome in terms of jobs would increase of 0,1 millions, for a total gain of 2,1 millions jobs.

Calling for a more employment-friendly investment plan, ILO’s predictions could eventually inspire the opinions that are going to be expressed by the two co-legislators, placing greater emphasis on employment and social aspects.