Economy and finance
Kažimír: We aim to make progress in the debate on common macroeconomic stabilisers
‘As Council Presidency, we believe that a debate on automatic stabilisers for the euro area is essential.’
‘As Council Presidency, we believe that a debate on automatic stabilisers for the euro area is essential,’ Mr Kažimír said in his opening address. He noted that a common unemployment scheme is a possible example of a ‘better Europe’, which upholds the principle of subsidiarity and is thus not tantamount to surrendering sovereignty to the ‘European level’.
The idea of stabilising tools came back to the fore amidst the recent crisis, which exposed weaknesses in the architecture of the Economic and Monetary Union. It also appeared in the Five Presidents’ Report in 2015. In February 2015, the Brussels-based think tank CEPS began to prepare a technical feasibility study that was presented at the conference on Monday.
‘We lack tools to mitigate asymmetric shocks,’ said Mr Kažimír, adding that the crisis highlighted the importance of such tools. ‘Even though the euro area's economy is coming out of the crisis, we won’t be spared shocks in the future.’
The common unemployment insurance scheme has several forms. In principle, this instrument would temporarily support a country that is experiencing an increase in short-term cyclical unemployment as a result of an economic shock. Conversely, it would not address the issue of structural, or ‘chronic’ unemployment.
‘In situations when the common monetary policy and national fiscal policies are not enough, we need to be on the lookout for fiscal tools at European level’, said Mr Kažimír. Several discussions on the issue, both high-level and technical, will take place during the Slovak Presidency.
Slovakia maintains that the basic principles of the scheme’s functioning need to be established – automaticity to ensure a timely stabilising effect and clear-cut rules to avoid moral hazard and permanent transfers. The scheme should be fiscally neutral, so that in the medium term the amount of funding drawn from the scheme by each country equals the contributions that it has made.
European unemployment insurance isn’t the only way to mitigate asymmetric shocks, but currently it is one of the most mature proposals for such an instrument. In conclusion, Mr Kažimír declared that ‘the Slovak Presidency is open to alternatives’.
The day-long conference will also feature speeches by the European Commissioner for Economic and Financial Affairs, Taxation and Customs, Pierre Moscovici, the European Commissioner for Employment, Social Affairs, Skills and Labour Mobility, Marianne Thyssen, the Italian Minister for Economy and Finances, Pier Carlo Padoan, the Belgian Professor of Economics, Paul De Grauwe, and a number of other experts.