Unemployment in Europe: Its Impact in the Future of Europe Unemployment is currently one of the biggest challenges facing the European Union. The fight against unemployment is an essential question that the European Union has to encounter in the short term. Today’s unemployment problem represents the most significant worry of the European Union citizen. Unemployment is the greatest disturbance of the European economy. Approximately 18 million of its people are out of work, an average unemployment rate of 10.6%. For instance, in France and Spain, the latest rates are 12.6% and 19.9% respectively. More women are unemployed than men. Youth unemployment is twice as high as the average. Almost 6 million people have been out of work for more than two years. Employment initiatives of the EU Because of the need to pursue solutions to the unemployment alarm, the European Commission called for a special employment summit of heads of state in late November. The European Commission wants to adopt lots of targets for the next five years. Under the form of "employment guidelines," it wants to increase the employment rate from 60% to 65%; create 12 million new jobs; cut the unemployment rate to 7%; raise the proportion of the unemployed who are offered training from the current EU average of 10% towards the average of the three best-performing member states -that is, above 25%; and reduce the number of people who drop out of the education system by half within a period of five years. The commission wants to switch some of the $221 billion spent every year on unemployment benefits to active labor-market policies; cutting the overhead and tax costs of employing workers; and encouraging more adaptable forms of contract. Furthermore, the Commission is calling for a reversal of the long term trend towards higher taxes and charges on labor, which have increased from 35% in 1985 to more than 42% in 1995. The commission considers the possibility of increasing the growth of part-time work, which has been responsible for all of Europe’s net job gains in the past six years and now accounts for 16% of the European Union’s total employment. At the same time, the commission wants part-timer employees to enjoy the same security and benefits as full-time workers, a sure formula that has reduced the number of part-time jobs created. Regarding taxation, the commission recommends reducing taxes on labor, which have risen from an effective rate of 35% in 1981 to 42% today. Yet rather than just cutting the total tax burden, which Europe badly needs, it suggests offsetting such reductions with higher taxes on energy and capital that could well raise unemployment. Germany’s unemployment trend compared to other EU members In 1989, the then West Germany’s rate of unemployment was only 5.6 per cent. This was fractionally above the 5.2 per cent of the US. It was well below the European Union’s average of 8.7 per cent, the UK’s 7.2 per cent, the French 9.4 per cent, Italy’s 10.9 per cent and Spain’s 16.9 per cent. In 1996, Germany’s unemployment rate was 9 percent. This was still below Italy’s 12 per cent, France’s 12.4 per cent and Spain’s 22.2 per cent. But it contrasts unfavorably with the 5.4 per cent of the US and even with the 8.2 per cent of the UK. The German unemployment rate is recently at 11.2 per cent of the labor force. Western Germany jobless rate is 9.5% while in eastern Germany the rate is 18.2 per cent. Because of the difficulties of German unification, Germany’s job performance seems to be appropriate. However a justification, although probable, does not change the truth that the country needs more jobs, but has failed to provide them. Following unification what Germany needed was a surge in labor-absorbing growth. Rather, what has happened, has been a decline in employment in both eastern and western Germany. Blame for the eastern failure lies with the decision to translate western labor practices into east Germany. For instance, pressure for wage equalization has pushed compensation per employee to some 70 per cent of western levels. Given low productivity, unit labor costs are 30 per cent higher in eastern manufacturing than in the west, making the east the most expensive location in the world. Common recommendations As