Creating a Union with a "Human Face": A European Unemployment Insurance

A European Unemployment Insurance (EUI) for the Economic and Monetary Union (EMU) would be a feasible and effective tool to cushion the impact of asymmetric shocks. It would have had a deep stabilisation effect during the last recession, stimulating aggregate demand and reducing the pressure to cut fiscal stabilisers in a pro-cyclical way (the so called "race-to-the-bottom" effect). Fiscal, institutional, legal and statistical problems can be tackled, without reducing the generosity of the scheme. If implemented the EUI would finally give a "human face" to the EU integration process, with policies that have a far-reaching impact in the everyday lives of the EU's citizens.