Youth unemployment rate is extremely high in all Mediterranean countries – Greece, Spain, Italy, Portugal and also Croatia which is the focus of this paper. These countries have similiar pattern of youth labour market behavior which is not synchronized with educational system and therefore quite a few people face difficulties when looking for their first job. What is also concerning is the share of persons who are dropping out of educational system which is not accompanied with neither employment nor training so they become part of the NEET population. First part of the paper is devoted to the role of education in youth (un)employment which is associated with the NEET population and overqualification. The transition from education to work is difficult in Mediterranean countries and staying outside of the labour market brings negative social, economic and political consequences which will also be discussed. In order to reduce youth unemployment, every country enacts structural reforms and active labour market policies which are presented in separate chapter. Carrying out individual reforms is not enough to solve the problem if there is no cooperation between all relevant stakeholders. Therefore, key determinants of the social partnership are contained in the last part of the paper as they represent necessary part of all the future reforms.