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Banks Saved, but Europe Risks "Losing a Generation"

Europe has spent hundreds of billions of euros rescuing its banks but may have lost an entire generation of young people in the process, the president of the European Parliament said.

Over the past 40 years, rising incomes in countries such as Spain, Greece, Italy and Portugal have allowed working class families to invest ever more in education, with the expectation that their children would be better placed as a result.

The ability of young people to study and work anywhere in Europe as part of the EU's single market ideal was also supposed to deliver vastly improved opportunities for all.

But instead, as a result of the banking and debt crisis that has cast a shadow over Europe since 2008, those sunny prospects never materialised for millions of young people.

"Greece, Spain and Italy have perhaps the best educated generations they have ever had in their countries, their parents invested a lot of money in the education of their children, everything they did was right," said Schulz.

"And now they are ready to work the society says, 'No place for you'. We are creating a lost generation."

Asked how he would tackle the issue, the Socialist party leader said it was in part about cutting through bureaucracy and putting money to work directly where it was needed.

He gave the example of Greece and investment in solar energy. If traditional methods are followed, a decision is made in Brussels, money is mobilised somewhere else, an investment programme is drawn up, the money is disbursed to the central government in Athens, then goes to several ministries, and finally ends up with a local or regional authorities to invest.

"By that time, we are much older," he said.

"In my mind, direct links between the European Union and regional and local authorities is more needed than ever."

The alternative is a system that puts the social fabric of Europe under ever greater strain, resulting in the dire youth unemployment statistics now prevalent in Greece, he said.

"That is a threat for social cohesion, and if the social cohesion in such countries fails, the country explodes. This is the threat for the European Union as a whole."

(Additional reporting by Robin Emmott and Charlie Dunmore Editing by Jeremy Gaunt.)

Copyright 2013 by Reuters. All rights reserved.

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