27. 11. 78 Official Journal of the European Communities No C 283/29 
Having regard to the discussions at its 160th plenary 
session held on 20 and 21 June 1978 (meeting of 
20 June 1978), 
HAS ADOPTED THE FOLLOWING OPINION 
unanimously: 
1. The Committee recalls that in its opinion (*) on the 
draft Directive which the present proposal seeks to 
amend, the Committee noted that the draft Directive 
applied only to direct taxes, and believed that there was 
also evasion of indirect taxes, and consequently urged 
the Commission to give attention to this matter as soon 
as possible. 2. In welcoming the present proposal to amend the 
earlier Directive so as to ensure there be close cooper­
ation between the national tax administrations in the 
proper charging of VAT, the Committee would em­
phasize again that to be effective and acceptable, the 
procedure should be based on the following general 
principles: 
— allowance should be made for the differences in tax 
legislation and tax rates which exist in Member 
States, 
— taxpayers and third parties should be given an 
assurance that their private affairs and their busi­
ness and trade secrets will be adequately protected 
by not being pried into any more than is necessary 
to assess the tax in question, 
— information passed from one authority to another 
should be used for no other purpose than that for 
which it was disclosed. 
Done at Brussels, 20 June 1978. 
The Chairman 
of the Economic and Social Committee 
Basil de FERRANTI 
Opinion on the proposal for a Council Regulation concerning the creation of a new 
European Social Fund aid in favour of young people 
The text referred to the Committee has been published in Official Journal of the European 
Communities No C 100 of 25 April 1978, pages 4 and 15. 
A. LEGAL BASIS FOR THE OPINION 
On 19 April 1978 the Council referred the abovementioned proposal to the Economic and 
Social Committee in accordance with Article 198 of the Treaty establishing the European 
Economic Community. 
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE 
The Economic and Social Committee prepared its opinion on the above matter at its 160th 
plenary session held in Brussels on 20 and 21 June 1978. 
The full text of the opinion is as follows: 
(!) OJ No C 56, 7. 3. 1977, p. 66. 
No C 283/30 Official Journal of the European Communities 27. 11. 78 
THE ECONOMIC AND SOCIAL COMMITTEE, newly recruited by undertakings involved in the 
production of goods and services, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 198 
thereof, 
Having regard to the request made by the Council of 
the European Communities on 20 April 1978 for an 
opinion, 
Having regard to the decision taken by its Bureau on 
25 April 1978 instructing the Section for Social Ques­
tions to draw up an opinion on this matter, 
Having regard to the opinion adopted by the Section for 
Social Questions at its meeting on 8 June 1978, 
Having regard to the oral report made by Mr Carroll on 
behalf of the rapporteur, Mr Laval, 
Having regard to the discussions at its 160th plenary 
session held on 20 and 21 June (meeting of 21 June 
1978), 
Whereas the Economic and Social Committee has con­
sistently recommended measures to remedy the crisis of 
youth unemployment in the past and at present; 
Whereas the Economic and Social Committee has con­
tinually urged that the European Social Fund support 
vocational training programmes for young people out of 
work and has supported the idea of incentives to recruit 
young people for newly created jobs; 
Whereas young people are particularly vulnerable in the 
present economic crisis and their numbers are con­
stantly increasing, 
HAS ADOPTED THE FOLLOWING OPINION 
by 41 votes to nil with 12 abstentions: 
1. Introduction 
1.1. The Commission proposal for a Council Regula­
tion concerning the creation of a new European Social 
Fund aid in favour of young people is concerned with a 
new form of aid to supplement the European Social 
Fund system. The object is to promote the employment 
of young people under 25 years of age with two types of 
grants or subsidies: 
— expenditure on employment subsidies (recruitment 
premiums) in respect of young people under 25 — expenditure in respect of wage costs for young 
people under 25 incurred in connection with newly 
established programmes in the public interest. 
1.2. The contribution of the European Social Fund (*) 
is calculated on the following basis: 
— for employment premiums: aid from the European 
Social Fund shall be calculated on the basis of a 
wage allowance not exceeding the sum of 30 Euro­
pean units of account per person per week for a 
maximum of six months. The incentive to recruit 
may take the forms of premiums paid directly to 
employers, or it may be in the form of a reduction 
in employers' social security contributions, 
— for job creation programmes related to activities or 
services in the public interest: assistance from the 
European Social Fund shall be calculated on the 
basis of a wage allowance not exceeding the sum of 
60 European units of account per person per week 
for a maximum of 12 months. 
1.3. The Commission wishes to encourage national 
efforts through these two types of Community interven­
tion. Both types of subsidies cover a broad range of job 
creation measures for young people. 
, 1.4. Such aid applies only to regions where young 
people are faced with high unemployment rates. The 
number of young people who should benefit is esti­
mated at around 150 000. 
1.5. The Committee underlines in particular the 
Commission efforts to help young people in economi­
cally and socially deprived regions (Greenland, French 
overseas departments, Ireland, Northern Ireland and the 
Mezzogiorno). 
1.6. The Committee underlines its consistent support 
for European Social Fund assistance in the area of youth 
unemployment as expressed in the own-initiative opin­
ion of the ESC on main measures to be taken to help 
unemployed young people, women and elderly workers 
and women wishing to resume gainful employment (2) 
and in the opinion on the draft Commission recommen­
dation on vocational preparation for young people who 
are unemployed or threatened by unemployment (3). 
(x) The aid will be granted under either Article 4 (intervention 
— young people) or Article 5 of Decision 71/66/EEC (OJ 
No L 28, 4. 2. 1971, p. 15), as amended by Decision 
77/801/EEC (OJ No L 337, 27. 12. 1977, p. 8). 
(2) OJ No C 56, 7. 3. 1977, p. 1. 
(3) OJ No C 61, 10. 3. 1977, p. 25. 
27. 11. 78 Official Journal of the European Communities No C 283/31 
1.7. The Committee, with a certain number of reserva­
tions, supports the Commission's proposal for Com­
munity aids to promote the employment of young peo­
ple and underlines the urgency and speed with which 
these aids/interventions should be applied. 
But it is not through measures of this kind, which are 
certainly justified by the extraordinarily high level of 
unemployment among young people, that the poor job 
prospects for school-leavers can be improved; it is 
rather through a thorough reform of education, job 
counselling and vocational training. 
The proposed emergency scheme is only acceptable as a 
temporary measure or subject to a specified time limit. 
This should be made clear in the text, either by stating a 
two to four-year limit on the scheme's operation or by 
including provision for review after a similar period. 
The indefinite prospect of Community aids could en­
courage countries to put off spending on the urgent 
reform of their educational and training systems, which 
would only perpetuate and aggravate the plight of 
young people. 
2. General comments 
2.1. The Committee stresses that short-term measures, 
as set out in the draft Council Regulation, can only be 
effective on a short-term basis and are only a partial 
solution to the problem of youth unemployment which 
affects around two million under 25 years in the 
Community. The actions to be undertaken on the Euro­
pean Community level should be long-term, in view of 
the deep-seated causes of youth unemployment. Furth­
ermore, these proposals will be of only limited effect, if 
the general economic situation within the Member 
States does not improve. 
2.2. Basically, the Committee feels that it is paramount 
that policies on education, on training, and on employ­
ment are coordinated at every level. The Committee has 
stressed the integration of these policies in its recent 
opinion on education and vocational training for young 
workers. There should be a comprehensive policy em­
bracing both education and employment. This should 
be kept in mind when granting subsidies. 
2.3. The Committee feels that the second set of mea­
sures — subsidies for programmes involving the re­
cruitment of young people for newly-created jobs in the 
context of activities or services in the public interest — 
are more positive than the first set, in that they are new 
job-creating measures. The first set of measures, re­
cruitment premiums, to be given as an incentive to 
undertakings to increase their labour force, may lead to 
dead-end, temporary jobs or even be artificial measures 
which do not secure for the young worker a stable job. 
Furthermore, these premiums do not ensure any vo­cational preparation or training. Experience with re­
cruitment premiums is too limited to allow a definitive 
assessment of their impact on the labour market. Con­
sequently, the Section does not rule out the possibility 
that the use of employment premiums to reduce youth 
- unemployment may have undesirable side effects on the 
labour market. Moreover, the granting of these pre­
miums, unless tied to creation of new jobs, may lead to 
the dismissal of older workers not covered by a retire­
ment or early pension scheme. 
2.4. These short-term measures should be sup­
plemented by the promotion of effective continuing 
educational and vocational guidance measures as well 
as provision of continuing initial education and training 
opportunities for all young people, especially for those 
who are underqualified and for those with inadequate 
education. 
2.5. The Committee points out that these proposals do 
not sufficiently take account of the most vulnerable 
group among the young unemployed, which are the 
girls under 25. 
2.6. The Committee supports the view of the Commis­
sion that the new aid measures must provide sufficient 
incentive and, at the same time, must contribute to a 
more equitable distribution of financial burdens. Public 
authorities, for example, do not all have the same 
means to develop their programmes. 
3. Specific comments 
3.1. The Committee notes with satisfaction that the 
Commission document points out that the possibility of 
the new aid measure being added to aid from (e) (this 
aid includes the possibility of the ESF bearing the cost 
of part of the remuneration of workers newly-recruited 
in FEDER (European Regional Development Fund) 
regions, for a period of six months) provided for in 
Article 3 (3) of Council Regulation (EEC) No 2396/71 
will have to be avoided. 
3.2. The Committee considers that there should not be 
any duplication between the grants provided under 
Article 3 (e) and those provided under the new provis­
ions. 
3.3. The Committee would like to see a reference made 
within Article 1 of the draft Regulation which demon-
No C 283/32 Official Journal of the European Communities 27. 11. 78 
3.5. The Committee feels that there should be an 
annual review and evaluation of the proposed measures 
and their impact on the labour market, with special 
reference to youth unemployment. The Committee 
should be regularly briefed on the findings. 
The Chairman 
of the Economic and Social Committee 
Basil de FERRANTI 
ANNEX 
to the opinion of the Economic and Social Committee 
The following amendment was rejected during the discussions. 
Page 5, paragraph 2.3 
In the eighth and ninth lines delete 'or even be artificial measures' and alter 'a stable job' to 'stable em­
ployment.' 
Voting 
For: 23, against: 27. 
The following texts of the Section's opinion have been deleted following the acceptance of amendments 
proposed during the debate. 
Page 5, the fourth and fifth sentences of paragraph 2.3 
'They can also be misused or misunderstood, because they could give preference to an untrained 
young worker at the price of the trained worker. Moreover, unless they are tied to creation of new 
jobs, they may lead to the dismissal of older workers and their replacement by younger ones, for 
which the employer would receive the grant.' 
Voting 
For: 24, against: 7, abstentions: 13. 
Page 7, paragraph 3.5 
'The Section feels that there should be an annual evaluation of these proposals and their effect on 
youth unemployment and hopes that the Economic and Social Committee will be regularly informed.' 
Voting strates a willingness to seek a balance between male and 
female participation. 
3.4. The Committee would like information as to how 
this Regulation will be implemented and administered 
in the different Member States. 
Done at Brussels, 21 June 1978. 
For: 44, against: 1, abstentions 9.