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GENEVA: An ambitious European investment plan could create 2.1 million jobs by 2018 if properly implemented, the International Labour Organisation (ILO) said on Wednesday.
Crafted by European Commission Chief Jean-Claude Juncker, the 351 billion euro ($387bn) plan is based on 21bn euros in seed money from the EU budget and the bloc’s European Investment Bank (EIB).
Juncker expects this will trigger massive private investment over three years to take the plan to the total figure.
But the Geneva-based ILO warned that the plan would have only a marginal effect on unemployment if it does not focus on making credit accessible to job-rich small enterprises and provide more investment to countries with higher jobless rates.
“If the Juncker investment plan is not well designed, the employment benefits will be very small,” said Raymond Torres, director of research at the ILO.
“By 2018, the employment impact will be only 400,000 new jobs, and given the 23m unemployed this is a very small per cent,” he told reporters.
“If the plan is well designed, by contrast the number of jobs created could reach 2.1m by 2018 and lower the unemployment rate by almost one percentage point,” Torres said.
He said the plan had to focus on projects involving large economies of scale such as energy networks and green projects.
“The plan has to tackle the sources of low employment in Europe and in particular in small and medium-sized enterprises,” he said.
“In high unemployment countries like Italy, Spain and so on there are small enterprises that cannot invest because they do not have proper access to bank credit.”
Published in Dawn, January 29th, 2015
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