Roadmap for a European unemployment benefit scheme

A growing debate exists among policy-makers and researchers on the need to create an automatic stabiliser in the Euro Area. The idea is mentioned in the Five Presidents' Report (2015) as well, where it can be read: .."national fiscal stabilisers might not be enough to absorb the shock and provide the optimal level of economic stabilisation, which in turn can harm the whole euro area. For this reason, it would be important to create in the longer term a euro area-wide fiscal stabilisation function." The creation of a stabiliser is part of the second of three stages that lead to the completion of the Monetary Union. The Five Presidents' Report prescribes, as a precondition, a certain degree of convergence across the EMU countries: "convergence towards similarly resilient national economic structures would be a condition to access this mechanism". In this pilot project, we investigate the feasibility and added value of introducing a stabilisation function via an unemployment benefits scheme. To this end, the project covers both the legal and operational challenges as well as the economic impact of such a scheme. In the project, 18 different EUBS are assessed. These 18 schemes are divided into two groups: 4 equivalent schemes and 14 genuine ones. On the basis of the work performed in other parts of the project, we develop two roadmaps: one for the equivalent and one for the genuine schemes. In both cases, we first exclude those variants that are implausible or less effective.