Euro-dole - A German initiative that Berlin doesn’t welcome

Frankly Speaking

Picture of Giles Merritt
Giles Merritt

Founder of Friends of Europe

In the eyes of most Europeans, the EU is cold and remote. “Nobody could ever fall in love with the Single Market,” warned Jacques Delors in the late 1980s, when the pioneering Commission president was at the height of his popularity and making the single market a reality.

There’s little love of any sort for the EU nowadays. The Union plumbs new depths of distrust and antagonism. To survive and flourish, the EU must become more directly relevant to the people of Europe – and there is a way to do it.

An EU-wide unemployment benefit system has been mooted since 2012, if not before. Earlier models have been refined into one that looks feasible.

But while the details are important, the key point is a bigger one: the need to rebrand the European Union as a caring organisation rather than an arrogant and unfeeling bureaucracy.

To survive and flourish, the EU must become more directly relevant to the people of Europe

Youth unemployment is widely seen as symptomatic of the EU’s failure to deliver the economic benefits it promised. It’s an unfair criticism: job creation policies to overcome mismatches and speed young people into work are defined at a national level – and often locally. But as we all know, in politics, perception is everything.

And that’s why a European benefits scheme is a good idea. It would be a high-profile sign that the EU is recovering the spirit of solidarity between member states that is currently in full retreat. Another reason – more complicated, but fundamentally more important still – is that it would move social policy back near the top of the EU’s agenda.

Saving the euro is vital, and a European benefits scheme would be a first step towards the fiscal integration the eurozone needs. It would also focus attention on Europe’s huge but overlooked demographic problem. By the middle of this century there will be only two working-age Europeans per pensioner (down from a four-to-one ratio today). Social protection will fast become the hottest political challenge of all time.

The latest European unemployment benefits model comes from a German research outfit – the state of Baden-Württemberg’s Centre for European Economic Research (ZEW). Its approach would be to harmonise national systems and pool relevant national budgets to create common levels of benefits.

A European benefits scheme would be a sign that the EU is recovering the spirit of solidarity

Quite apart from the scheme’s public relations value, its authors claim significant economic advantages. They reckon it would help smooth out the disparities between regions suffering from the uneven impacts of unemployment, and in the longer term would cushion the asymmetric shocks that have been a feature of the eurozone crisis.

Not everyone shares this view. Critics of the idea raise the ‘moral hazard’ question and ask whether it wouldn’t encourage weaker eurozone countries to keep on delaying reforms. They also argue that the wider benefits system could serve as a magnet to ‘benefits scroungers’ – and so encourage even more joblessness.

But the bottom line is, of course, the potential cost to the eurozone’s richer northern countries. Led by Germany, they are already opposed to proposals for eurozone bonds to help tackle sovereign debt problems.

So on the face of it, the unemployment benefits scheme stands no chance at all. But that is to ignore populist Euroscepticism – a far greater threat to the European project.

If the benefits scheme could be presented as a more human face of the EU, as well as a means of breaking the deadlock over the eurozone’s future, then maybe it has a future. That would offer Berlin an opportunity to refute the notion that, in the words of Oscar Wilde, it “knows the price of everything, but the value of nothing”.

Track title


Stop playback
Video title


Africa initiative logo