The notion of a European unemployment benefit scheme has been present in the debate since the 1970, though not until after 2012 did the economic rationale shift towards proposing it as an automatic stabiliser for the euro area and the European Union. According to Ms Maselli, the EUBS is desirable in Europe for several reasons. First, in Europe monetary policies are managed at EU level and fiscal policies are limited to the national level. Secondly, member states have reduced powers to adjust to spillover effects. Finally, the only real stabiliser available in Europe is mobility, which, though increasing, remains still limited in terms of numbers and the impact it can generate.
The research shows that in many of the case studies identified (USA, Canada, Australia, Germany, Switzerland, Belgium and Austria), unemployment benefits are centralised while active labour policies and social assistance are decentralised. Dr Vandenbroucke referred to the question of the institutional moral hazard which occurs when the central higher level covers the unemployment benefits, and the regional or local level can influence and, by the same token, be held responsible for the level of unemployment. According to Dr Vandenbroucke, the institutional moral hazard at EU level would be ‘the price to be paid’ for better risk pooling and stabilisation in Europe. To avoid having countries that are net beneficiaries of the system in the long run, Dr Vandenbroucke proposed to impose ‘minimum requirements’ to trigger the EUBS.
read more here on ETUI website http://www.etui.org/News/Towards-a-desirable-and-feasible-European-unemployment-benefit-scheme