Publication

This paper argues that the European economic governance system requires mechanisms to help prevent instability in the event of economic downturns, and that one option that should be considered is an unemployment benefit system for the euro area. The authors also look at some of the different arguments for the implementation of such a benefit system, including 1) the suggestion that as national economies become more integrated, national instruments of economic policy become less effective; and 2) that EU labor markets are slow to adjust to market failures. They then review some of the challenges that could hinder the creation of a supranational unemployment benefit scheme, before looking at some of the possible forms such a system could take.