Common unemployment insurance scheme for the euro area

The European Parliament has called for a “social dimension” to the Economic and Monetary Union to tackle unemployment and restore growth following the recent economic crisis. Among various alternative options, automatic stabilisers could potentially be means of stabilising the Eurozone, while at the same time addressing social problems associated with the financial crisis. This Cost of Non-Europe report explores the prospects for introducing an automatic stabilizer in the form of an Unemployment Insurance Scheme for the euro area, which will provide the monetary union with greater stability in the medium and long term. It builds on two research papers commissioned for the purpose, which are included as annexes. Analysis of its potential benefits, had it existed during the recent crisis, shows that such a scheme would have reduced the fall in GDP in the most affected Member States by 71 billion euro in the period between 2009 and 2012.