The EU-wide unemployment benefit idea could be a political winner

By Giles Merritt 

These are tough times for the EU, and getting tougher. The European Parliament elections in late May probably won't be catastrophic, but surging support for populist candidates could severely weaken the European project at a time when unity and strength are vital.

The question MEPs and senior Eurocrats most fear from voters is: “What has the EU ever done for ME?” However long the list of accomplishments actually is, the benefits of 60 years of integration are so much taken for granted nowadays that the EU's defenders flail around for answers.

In short, the EU needs a new banner to rally its supporters behind, and an idea from a former Belgian social affairs minister might be just the job. “How about an EU-wide unemployment benefits scheme?” asks Frank Vandenbroucke, who in addition to teaching and research work at the University of Amsterdam, is also a member of Friends of Europe's Board of Trustees.

Although mass unemployment is declining – today's greater problem is labour shortages – it's far from vanquished. Young people continue to be more vulnerable to joblessness than their elders, training and educating job-seeking migrants takes time and, above all, there's the threat that robotisation and artificial intelligence may start turning our labour markets upside-down.

The proposal by Prof. Vandenbroucke and his Amsterdam-based team is for a scheme that would spread the costs of a fresh unemployment crisis in any EU country. Options range from a re-insurance of national unemployment benefit systems within the eurozone to a wider one, which the European Commission favours, that would funnel money to boost public investment in any member state that finds itself in hot water economically.

The Amsterdam team has labelled its core idea, 'European Unemployment Risk Sharing', or EURS. They followed up on this concept with a survey asking 20,000 people in 13 EU countries what they thought of it. Reactions suggest that whatever the scheme's drawbacks might prove to be, as a PR stunt, it could find much favour with disaffected EU voters.

‘Solidarity’, the notion of European countries bailing one another out in times of trouble, scored high on this opinion poll. Although EU governments have for some time been backing away from solidarity, whether by refusing refugee and migrant burden-sharing or not accepting that the eurozone should be a 'transfer union', ordinary citizens seem all for it.

The more generous the cross-border guarantees of financial assistance to unemployed people, the more enthusiastic citizens were in their support for the scheme. That said, when responding to the pollsters’ questions, a good many people believed there should be no tax increases to pay for it. To fine-tune the scheme, respondents were confronted with six policy options.

This created a bewildering array of over 300 possibilities which, from an academic standpoint, is rigorous research, but politically risks blunting the impact of the idea. In any case, it's too late for this sort of scheme to influence the upcoming European elections.

The long-term importance of an EU-level unemployment benefits scheme is clear enough. Clouds are again gathering over the world economy, with some pundits warning of a renewed global financial crisis comparable to that of 2007-8. 

A sense of shared European support for people thrown out of work by a similar upset in the 2020s would greatly strengthen the EU. As Frank Vandenbroucke points out, “thinking that modern market economies can do without stabilisation devices is a form of dangerous hubris - the kind of hubris that existed before 2008”.

*First published in friendsofeurope.org