WASHINGTON: Declining incomes for European youth since the global financial crisis are dimming their prospects, and IMF chief Christine Lagarde on Wednesday urged governments to take action to ensure they do not fall further behind.
A new International Monetary Fund study showing that while average income inequality in the EU “has remained broadly stable there since 2007,” Lagarde said the data reveal “a worrying trend: the gap between generations in Europe has widened significantly.”
“Working-age people, and especially the young, are falling behind. Without action, a generation may never be able to recover,” Lagarde said in a blog post that accompanied the release of the report.
Strong European safety nets helped older workers, whose pensions were also protected, but incomes for young people declined due to high unemployment, which spiked to 24 percent in 2013, and one-in five are still looking for work.
IMF research shows that an employment gap can lead to longer-term wage loss or “scarring” that erodes potential earnings, she said. A worker with less experience is less likely to find a job, and those lost wages cannot be saved.
“Wages not earned and savings not put aside can be extremely difficult, if not impossible, to recover later in a person’s career,” she warned.
That gap also can lead to rising levels of poverty among younger workers.
The solution, Lagarde said, is replicating policies such as those used in Germany and Portugal, including apprenticeship and training programs, and exempting first-time job holders from social security taxes for three years.
Measures to “create jobs and incentivize work” could include reducing taxes on low-wage workers, investing in education and training, and protecting younger workers with unemployment and non-pension benefits, she said.
Another strategy would be to focus on wealth taxes, which she said are lower today than they were in 1970, including inheritance taxes, to fund programs for younger citizens.
“Let me underline again: this is not about one age group versus another,” Lagarde said. “Building an economy that works for young people creates a stronger foundation for everyone” since young people with jobs with productive contribute to social safety nets.
“We can help heal the scars of the crisis.”
IMF’s Lagarde urges action to improve prospects for EU youth
IMF’s Lagarde urges action to improve prospects for EU youth
Closing Bell: Saudi main index closes higher at 10,596
RIYADH: Saudi equities closed higher on Tuesday, with the Tadawul All Share Index rising 43.59 points, or 0.41 percent, to finish at 10,595.85, supported by broad-based buying and strength in select mid-cap stocks.
Market breadth was firmly positive, with 170 stocks advancing against 90 decliners, while trading activity saw 161.96 million shares change hands, generating a total value of SR3.39 billion.
Meanwhile, the MT30 Index closed higher, gaining 6.52 points, or 0.47 percent, to 1,399.11, while the Nomu Parallel Market Index edged marginally lower, slipping 3.33 points, or 0.01 percent, to 23,267.77.
Among the session’s top gainers, Al Masar Al Shamil Education Co. surged 9.99 percent to close at SR26.20, while Saudi Cable Co. jumped 9.98 percent to SR147.70.
Cherry Trading Co. rose 4.18 percent to SR25.44, and United Carton Industries Co. advanced 4.09 percent to SR26.46.
Al Yamamah Steel Industries Co. also posted solid gains, climbing 4.07 percent to end at SR32.70.
On the downside, Emaar The Economic City led losses, slipping 3.55 percent to SR10.32, followed by Derayah REIT Fund, which fell 2.92 percent to SR5.31.
Derayah Financial Co. declined 2.13 percent to SR26.62, while United International Holding Co. retreated 1.96 percent to SR155.20, and Gulf Union Alahlia Cooperative Insurance Co. eased 1.92 percent to SR10.70.
On the announcements front, Red Sea International Co. said it signed a SR202.8 million contract with Webuild S.P.A. to provide integrated facilities management services for the Trojena project at Neom.
The agreement covers operations and maintenance for the project’s Main Camp and Spike Camp, including accommodation and housekeeping, catering, security, IT and communications, utilities, waste management, fire safety and emergency response, as well as other supporting services.
The contract runs for two years, with the financial impact expected to begin in the first quarter of 2026. Shares of Red Sea International closed up 0.99 percent at SR34.74.
Al Moammar Information Systems Co. disclosed that it received an award notification from Humain to design and build a data center dedicated to artificial intelligence technologies, with a total value exceeding 155 percent of the company’s 2024 revenue, inclusive of VAT.
The contract is expected to be formally signed in February 2026, underscoring the scale of the project and its potential impact on the company’s future revenues.
MIS shares ended the session 2.82 percent higher at SR156.70, reflecting positive investor sentiment following the announcement.
