European Union youth policy since the 1990s has been ostensibly committed to enhancing the social participation of young people. This study explores the reliance of the 2009 European Union (EU) Youth Strategy on a combination of OECD 'active society' and human capital theory which seeks to increase educational participation rates in Europe with the goal of creating more and better opportunities for young people and to promote active citizenship, social inclusion and solidarity. The authors adopt a 'southern theory' perspective to open up a range of problems with the EU Youth Strategy which begins to indicate why, contrary to expectations, this policy has failed to ameliorate the increasing levels of youth unemployment, underemployment and child and youth poverty. The study concludes that the EU Youth Strategy has consolidated 'a relation of cruel optimism' when what is desired, in this case more education, has become an obstacle to human flourishing.