European Unemployment Insurance?

Although European Unemployment Insurance (EUI) has been at the centre of the debate on ‘Social Europe’ over the last decade, there is still no consensus on the concept, and no specific steps have been taken towards the introduction of such a system. Debate and policies on EUI have ended in a stalemate; this is surprising given the origin of the idea, which was closely related to the first plan for economic and monetary union in the early 1970s. The first expert group deliberating on the social consequences of a monetary union considered it self-evident that, in the long run, a fully-fledged EUI would have to be established, and – explicitly appealing to ‘community solidarity’ – that, in the short term, immediate steps would need to be taken in this direction. The question therefore arises as to why this early consensus has faded away, and how this conceptual and political stalemate could be overcome. This essay starts with a historical overview identifying three waves of the debate on EUI and two current mainstream concepts: a ‘genuine’ and a ‘reinsurance’ EUI-system. The pros and cons of these alternatives are discussed. The paper argues that the concept of unemployment insurance itself needs to be fundamentally revised, since modern labour market policy has to cover not only income risks related to unemployment, but also other serious income risks related to critical transitions over the life course, thus opening up the perspective of ‘employment insurance’ or ‘work-life insurance’. Günther Schmid then develops ideas for covering a broader spectrum of social risks, and proposes an enhancement and extension of the existing European Social Fund (ESF), to create a ‘European Employment and Social Fund’ (EESF), with elements of a genuine European employment insurance as well as a reinsurance mechanism for asymmetric shock absorption.


Author(s) G. Schmid
Language English
Year of publication May, 2019
Journal OSE Opinion Paper
Volume, Number 2019, 20
Page(s) 26
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