Studies on Growth with Equity

An Employment-oriented Investment Strategy for Europe

Against a backdrop of sluggish economic conditions and continued weak job creation, the Investment Plan proposed by the European Commission President Jean-Claude Juncker would provide a rapid economic stimulus that would foster Europe’s competitiveness at the same time as boosting much-needed employment creation. The main finding of this ILO report is that, if careful consideration is given to the design of the programme and its allocation, over 2.1 million net new jobs would be created by mid-2018.

The employment situation remains a major source of concern in the majority of countries in the European Union. Half of the region’s unemployed have been without work for more than a year, and unless the policy approach changes, the prospects are for a sluggish employment recovery.

The Investment Plan proposed by the European Commission is thus a welcome initiative that recognizes the immediate need for stimulating growth, fostering Europe’s competitiveness and tackling the employment crisis.

This report finds that for the Investment Plan to make a significant dent in unemployment, the design of the programme is crucial. Taking into account the magnitude and diversity of the labour market challenges, placing greater emphasis on complementary labour market policies and ensuring that small enterprises have access to credit will lead to better outcomes. In addition, any measures developed as part of the Investment Plan need to form the basis of a medium-term employment strategy that aims at quality job creation and avoids a “race to the bottom” in terms of wages and working conditions.