ES GILT DAS GESPROCHENE WORT (Check against delivery).

DDG Zoltan Kazatsay's Speech, Potsdam 9 December, 2015

Sehr geehrter Frau Ministerin,

meine sehr geehrten Damen und Herren,

vielen Dank für die Einladung zur ESF-Jahrestagung und den herzlichen

Empfang. Bitte erlauben Sie mir, meine Rede auf Englisch fortzusetzen.

Introduction

Across all member states of the European Union, the topic of

demographic change and skiled labour is high on the policy

agenda. I am grateful for this opportunity to contribute, from a European

Union perspective, to this important conference which focusses on the

supply of skilled labour in Brandenburg.

The question of sufficient skilled labour is multi-dimensional and

contains a broad set of issues ranging from demographic aspects,

technological change, importance of a quality training to new ways to

reconcile work and family life.

In my intervention today I would like to highlight first the main

challenges that lie ahead of us: at European level, but also for

Brandenburg. Second, I will give two examples of what is being done at

EU level to promote skilled labour. Third, I will outline how the

European Social Fund can contribute to maintain and further

increase skilled labour, in particular in the context of the recent flow

of refugees

1. What are the main challenges at European level?

At European level

The Commission's objective is clear: to get the economy back on a path of growth and to create new and decent jobs. The crisis destroyed many jobs in Europe – especially those of low-skilled workers. Now most new job offers require a different and higher skill-set than in the past.

In its latest economic forecasts published on 5 November, the

Commission expects GDP growth to be 1.6% in the EU in 2015 and to

accelerate to 1.8% in 2016.

The EU economy continues its moderate but consistent growth.

Nevertheless, we still face major challenges in the mid- and long-term:

First of all, unemployment has started to fall slowly but is still

intolerably high overall at nearly 10%: over 23 million of our citizens,

the same as the population of a medium-sized Member State. In some

countries the situation continues to be particularly alarming such as in

Spain where the unemployment rate is above 20%. Long-term

unemployment accounts for more than half of the unemployed.

A pressing challenge remains the very high youth unemployment in

Europe. The EU overall youth unemployment rate stood in 2014 at just

over 22 %, but in some countries it exceeds even 50%. Preventing the

risk of a "lost generation" of young people who have lost faith in the

system and see their future in bleak terms is one we should all take

seriously.

Moreover, the increasing inflow of refugees and asylum seekers

requires common efforts and solidarity. Here the challenges are

numerous: first, to organise rapid initial care such as housing, medical

aid and food supply, second to assure a timely asylum procedure and

third to give the necessary assistance for the recognition of

qualifications, to offer language and professional trainings for the

integration into the labour market.

At the same time, we are confronted with the demographic change:

we know that until 2040 the EU's population aged between 20 and 64

years will be shrinking by 0.4% every year. Thus, the Union will lose

some 27 million people in this core working-age group over the next

25 years. Policies such as the increase of retirement ages are

responses to the challenge. Nevertheless, the extent of the decline will

make it necessary that the EU makes the best use of the newly available

resources. It is therefore vital that the EU does not waste any potential.

We must increase the share of the population in good quality

employment in order to maintain/strengthen living standards and the

European social model in the future. Unfortunatelly, across the EU the

employment rate is still particularly low for women (64% against 75% for

men or working age in 2014) and older workers aged 55-64 (52% against

61% in the US and 69% in Japan).

The Europe 2020 strategy sets a goal of labour market participation of 75

% for women and men aged 20 to 64 by 2020. Compared to 2013, the

EU employment rate has increased by 0.8 percentage points in 2014 and

stood at 69%, which is still below the pre-crisis level of 70% in 2008.

In short, with our ageing population, we must get more people into the

labour market: young people, women, low-skilled and older workers, and

the long-term unemployed.

But, we must also ensure that the skills available on the labour market match the needs of a dynamic and globalised economy. We face the paradoxical situation where despite 23 million people looking for work, there are around 2 million unfilled vacancies. Employers cannot find people with the right skills. SMEs are particularly affected as they lack the capacity to invest in further training. We absolutely need to address this problem.

Currently, there are 68 million European adults who reach only basic levels of proficiency in literacy and numeracy. Yet, these skills are at the core of their ability to perform in most jobs.

In the near future, nearly all jobs will also require some level of digital skills, yet 70% of EU citizens only have low to basic digital skills. This is not only important for young people seeking their first job, but increasingly, for working people who must adapt throughout their careers

It is evident that we must make better use of the available skills - including through enhanced geographical and occupational mobility, based on more transparency and smoother recognition of qualifications.

B. Now let us look now at the situation in Brandenburg

I was interested to learn that not only the Brandenburg labor market is

flourishing .but that the self-employment rate of 12 percent lies above

the national average of 10.3 percent;( July 2015)

This holds a strong potential and opportunities for the region of

Brandenburg, given the fact that women and migrants can be activated

even further as they display a slightly stronger tendency for founding

start-ups then other groups in Brnadenburg.

But you know too well of course that the biggest challenge is the shortage of skilled workers which has dramatically intensified over the years and across sectors. Unemployment is also a major challenge and reaches up to 14% in some parts of Brandenburg. The share of Long-term unemployed among all unemployed has risen from 40 % in the past two years ( November 2012) to 43.8 % ( November 2014) .

To address the challenge of skills shortages the region of Brandenburg has developed a coherent strategy which consists in an ambitious set of 93 concrete measures that are currently developed further;. Under the motto " Educate- keep - attract " , the strategy focuses on the attractiveness of the region to attract professionals inside and outside and inhance the competitiveness

of the enterprises., the promotion of a highly qualitative dual professional

training and the increase of the participation in life-long learning. This

shows that Brandenburg has a long-term vision !

2) Ladies and gentlemen,

Now let me explain what we doing in Brussels to address the

described challenges at the European level. How are we going to

improve things and cope with the challenges such as high youth

unemployment or skills shortages ?

President Juncker and his Commission have clearly set their focus on Jobs, Growth, Fairness and Democratic Change. I would like to present two examples which are related to the topic of skilled labour supply:

1. Let me start with the Youth Guarantee. The Youth Guarantee is a

new approach adopted in April 2013 to reducing youth unemployment,

and offering a positive perspective to the 6 million young EU citizens who

are seeking work. Its objective is that all young people under 25 –

whether registered with employment services or not – get a good-quality

offer within 4 months of them leaving formal education or becoming

unemployed. The Youth Guarantee also targets the skills gap. Every

young person should get a chance either related to education or

employment.

As well as being the focus of many ESF programmes, the Youth Guarantee scheme also gets support from the Youth Employment Initiative for countries with a very high youth unemployment with a total budget of €6.4 billion for the period 2014-20. This is direct investment in our young people and in the future of our Union. In May, we paid out EUR 1 billion in advance payments to the 20 Member States eligible for support from the YEI. Germany having the lowest youth unemployment rate in the EU (7.3% in 2014, young people 15-24 years) is not eligible under the Youth Employment Initiative.

2. EURES

Second, there is the European project on labour mobility. EURES is a cooperation network designed to facilitate the free movement of workers within the EU 28 countries plus Switzerland, Iceland, Liechtenstein and Norway.

The purpose of EURES is to provide information, advice and recruitment, matching, placement and post-placement services for the benefit of workers and employers as well as any citizen wishing to benefit from the principle of the free movement of workers.

Set up in 1993, the EURES network accounts for approximately 150,000 placements per year (50 000 through its advisers and 100 000 through its portal).

Over the coming years the portal will evolve into a European

interoperability platform for job vacancies and CVs based on standard

formats and classifications, such as ESCO, and integrating data from

other actors than the Public Employment Services, such as private

employment services. Currently a regulation for EURES is under

negotiation. It will be a regulation on the European network of

employment services, workers' access to mobility services and the

further integration of labour markets.

3)

Ladies and gentlemen, let me now turn to the ESF and how it how

the European Social Fund can contribute to maintain and further

increase skilled labour and how it can offer ways of integrating

refugees and migrants into the labour market

. At the moment it is way too early to come up with precise forecasts

about the impact the refugee crisis will have on the EU's labour

market and economy. Little is known about whether the current streams

of refugees will continue at this level or how many of the current refugees

will return to their home countries.

What we do know is that current refugees are very young on average,

with young men and children being over-represented. There is empirical

evidence that their young age is a valuable asset when it comes to

invest in their skills and qualifications: The younger people are at the

time of undergoing training and education the higher can be the return of

investment of these measures. Those investments are indeed

necessary.

Why are those facts important to keep in mind? Because The ESF is the

main financial instrument available at European level to improve the

access to the labour market, to combat poverty and social exclusion and

to improve education and skills – and this applies also for migrants.

It is clear that the ESF can also support, the integration of migrants In

fact, migrants, such as asylum seekers and refugees, are explicitly

mentioned in the ESF Regulation as one of the target groups that may

receive support by the ESF.However, taking into account the mission of

the ESF as set out in the Treaty this support must always aim, even if

indirectly, the integration of the migrants into the labour market. To this

purpose, migrants can only be supported by the ESF provided they are

legally able to participate in the labour market.

Member States may however allow applicants access to vocational

training irrespective of whether they have access to the labour market

depending on their national legislation and if theirOperational

programme, supports vocational training.

Finally, as regards minor children of applicants and applicants who are

minors, Member States can grant access to the education system under

similar conditions as their own nationals for so long as an expulsion

measure against them or their parents is not actually enforced.

Therefore, minor children of migrants or migrants who are minor are

eligible for ESF support under the ESF investment priorities on education

As you see, there are no limitations to the support the ESF can provide

for migrants as compared to European citizens, once the legal access to

the labour market is fulfilled. What is crucial is to have a targeted step by

step approach for different segments of people and thus ensure easier

intergration and a more efficient job and skills-matching process. Not

everyone will become a qualified worker and obviously much more effort

is needed than just professional training. Language classes, counselling

and assistance to migrants and their families, a quicker recognition

process for foreign qualification diploma on the policy side are all part of

the same challenges.

To sum up the ESF could be used to test and experiment a wide array of

innovative solutions which could be applied later on at a larger scale; on

how to integrate migrants and fill the skills gaps on the labour market in

Brandenburg. The challenges we face require such innovation.

Conclusion

Ladies and gentlemen,

We are living a unique historical situation. A situation which can stir

insecurities within our communities but which also offers huge

opportunities once we understand that creativity in our approaches can

change our whole perspective on so called “ problems”

The successful implementation of the 2014-20 ESF depends on how we

manage to give life to its priorities and planned measures. The ESF

needs active stakeholders and informed participants in order to achieve

these goals;

Your work, your commitment and your creativity, are essential for the

ESF to be an effective instrument to address the challenges faced by

the people in Brandenburg.

With the ESF at your side, you can do more to qualify the citizens in

Brandenburg to take them up and benefit from them.

I wish us a fruitful discussion and a lot of success in your work with the

ESF! Thank you very much for your attention!