The proposal is spelled out in an action plan for jobs that also calls for €500m in microcredit – very small loans – for start-ups and more traineeships for young people. EU leaders are expected to consider the plan at their meeting later in June.

The €19bn would come from the social fund, the EU’s programme to support employment and reduce differences in living standards. For the period 2007-13, the EU has committed €77bn to the fund – about 10% of its total budget. With unemployment rising, the commission wants to speed up funding to assist people hit by the recession. It is also proposing to lift the usual requirement that EU countries match some portion of the funds.

The advance payments would go to retrain workers, help them search for jobs and start their own businesses. Governments could also use the money to compensate workers for “short-time” work – the loss of wages when employers cut workers’ hours because purchase orders dry up. Many EU countries subsidise short-time work, keeping hundreds of thousands of workers in jobs during slumps.

With help from the European Investment Bank, the commission is also proposing to set up a €500m programme to provide tiny loans for people to start their own businesses. About €100m in existing EU funds would be reallocated to the new microcredit facility.

To help young people get a foothold in the job market, the commission is also seeking an EU-wide commitment from companies to take on 5 million more apprentices or trainees. Unemployment among Europeans under 25 has topped 17% – more than twice the overall rate.

The plan calls for immediate help for the unemployed, recognising that the longer someone is out of a job, the harder it becomes to find one. The unemployed should get training or another job within three months after they are laid off – two months if they are under 25 and one if they are under 20.

The EU is suffering its worst recession in decades. Monetary and fiscal stimulus efforts are expected to kick in next year – after the economy sheds about 8.5 million jobs. Unemployment in the eurozone looks set to rise to 11.5% by the end of 2010 – the highest level since World War II.