Magazine article European Social Policy

Economic and Monetary Union : One Step Closer to European Unemployment Benefit System

Magazine article European Social Policy

Economic and Monetary Union : One Step Closer to European Unemployment Benefit System

Article excerpt

The EU is seriously considering the idea of an unemployment insurance system as an automatic stabiliser for the eurozone. On 5 September, the European Parliament's Committee on Employment and Social Affairs (EMPL) supported the launch of a pilot project on the feasibility and added value of a European unemployment benefit system. Meanwhile, the European Commission has established a working group - which includes, among others, the heads of DGs Employment and Ecfin - to discuss this idea. It is possible that the Commission will adopt a favourable position on such a mechanism in its communication on the social aspects of the Economic and Monetary Union (EMU), scheduled for publication in October 2013.


In its 28 November 2012 communication A blueprint for a deep and genuine Economic and Monetary Union'(1), the Commission has been pondering - officially, for the first time - the need to establish automatic stabilisers(2). The Commission notes that "The absence of a central budget with a stabilisation function has long been identified as a potential weakness of the euro area in comparison with other successful monetary unions."

The Commissioner for Employment and Social Affairs, Laszlo Andor, openly supported the idea of a European unemployment benefit scheme: "It could help to dampen fluctuations in real GDP in case of asymmetric shocks affecting some parts of the EU more than others (insurance function), and maybe also if symmetric shocks affect everybody (stabilisation function)," he said at a round table meeting on the state of Europe, on 11 October 2012. In Andor's view, "The EU-level scheme would represent a supplement, or perhaps a basic provision, which would then be topped up by the member states as they so wish".

Even though Andor was fairly specific, no initiative has yet seen the light of day. According to several sources, this could be one of the main points of the communication on the social aspects of the EMU, which the Commission has pledged to publish by the end of the year.


At the European Parliament, the EMPL committee is keen to be part of the conversation. EMPL organised, on 9 July, a public hearing on how and why to establish a European unemployment benefit scheme. The answer by the political advisor of the German Institute for Economic Research (DIW), Ferdinand Fichtner, to why' was unambiguous: such a system, in his view, would have helped fight the volatility of the economy. …

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