MercoPress. South Atlantic News Agency

Germany fearing a ‘lost generation’, more conciliatory with youth unemployment

Chancellor Merkel faces elections in four months time

Chancellor Angela Merkel, stung by criticism she is cracking the whip of fiscal discipline in Europe, has shown a more caring approach by pledging to fight record youth unemployment on the crisis-hit continent.

The declared new enemy in Berlin, aside from sloppy budgets and bloated bureaucracies, is the threat of a “lost generation” of young people without jobs, skills or hope, especially in hard-hit Greece and Spain.

Merkel's concern has helped soothe discord with French President Francois Hollande and plays well at home, where she faces an election in four months while her austerity drive has given the centre-left opposition room for attack.

But many observers are skeptical that a bundle of initiatives: including an EU plan which will harness six billion euros will have more than a cosmetic effect amid the economic turmoil hitting Europe.

The fight against youth unemployment, both EU-wide and bilaterally, has dominated German government meetings in recent weeks.

Merkel has called a Berlin gathering on youth unemployment on July 3 with labor ministers from all EU member states, following a new Franco-German plan to combat joblessness among Europe's young people.

Last week Germany and Spain signed an agreement for employment and vocational training in Germany for young people from Spain, where almost two out of three under 25-year-olds are out of work.

Germany, the EU biggest economy and main paymaster, has argued that ageing Europe needs deep structural reform to stay globally competitive and has insisted fiscal discipline and growth go hand in hand.

But growing discord across the Euro zone, including from France, its traditional main partner at the heart of Europe, has pushed Berlin to show a more conciliatory side.