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. Last Updated: 07/27/2016

Thousands Call for Jobs As EU Summit Begins

LUXEMBOURG -- Over 20,000 demonstrators urged the European Union leaders to face up to the joint problem of unemployment Thursday at a special jobs summit and take immediate action to get the 18 million unemployed back to work.


The 15 government leaders have already tried to play down expectations during the run-up to the first such gathering, warning no clear overall commitments on cuts in the hefty 10.6 percent jobless rate will come out of the two-day meeting.


"Europe as such will not create jobs," warned Belgian Prime Minister Jean-Luc Dehaene. "We can only stimulate."


Lining up behind a banner reading "18,212,500" for the number of unemployed, at least 20,000 people, according to police estimates, marched through the wet capital of Luxembourg, a rich, bucolic nation of 365,000 with few unemployment problems.


The EU has often paid lip service to the problem, but so far it has yet to get a joint program under way to cut the employment rate. The current rate is twice that of the United States and about three times that of Japan.


EU Commission President Jacques Santer was hoping he could deliver.


"The meeting must allow Europe to take a decisive step in the battle against unemployment," Santer wrote in a letter to the government leaders. But already, most leaders have said the commission's target to bring down unemployment to 7 percent in five years will not become policy.


Even though many member nations jealously guard social and employment policy as a national domain, many job policies have, in reality, already gathered widespread consensus. How to turn that into one strategic plan will be key at the meeting.


Most government leaders acknowledge the welfare systems need a thorough overhaul. Taxes on labor, which long fed the welfare state, must come down to make companies more competitive in the global market. Business must be unshackled from restrictive labor regulations. Vocational training for the young unemployed need to be improved.


But even the best of intentions are tough to turn into reality. Figures released by the EU last week show taxes on labor, a major disincentive to job creation, have actually increased in all but three EU nations over the past 10 years as governments tried to cut budget deficits.


Also, big divides remain on how fast and how thorough such labor reforms should be carried through. And member states also bicker about the role of government funding for such plans.


Britain and the Netherlands have already gone a long way down the free-market road and are brimming with confidence. EU forecasts show Dutch unemployment this year at 5.5 percent, British at 6.4 percent.


Ahead of the Luxembourg summit, the British Labour government has called for it's EU partners to adopt a new model that blends a U.S.-style free market with Europe's traditional welfare state -- "a new European way," said Chancellor of the Exchequer Gordon Brown.