Template-Type: ReDIF-Article 1.0

Author-Name: Donat Mark Kiss
Author-Workplace-Name: no affiliation
Author-Email: k.d.m19960228@gmail.com
Author-Person:

Author-Name: Gyorgy Szapary
Author-Workplace-Name: Magyar Nemzeti Bank, John von Neumann University
Author-Email: szaparygy@mnb.hu
Author-Person: psz20

Title: Proposal for a Stabilisation Mechanism for the EU Budget

Abstract: The question of how to give the European Union budget a stabilising function in the
event of shocks has long been a concern for economists and economic policy-makers.
Our paper proposes a mechanism that is automatic and relies on unemployment
figures, similar to the role of automatic stabilisers at the national level. A novel
feature of the proposal is that, instead of considering the overall unemployment
rate as most studies do in the literature, it uses excess unemployment data. As
a result, structural unemployment differences between countries can be discarded.
A system based on excess unemployment would not involve the modification of
national systems, but would introduce a complementary, top-off system. Benefits
are paid in addition to payments through the national unemployment systems and
are channelled into a fund set up in advance for this purpose. Annual payments to
the fund are made in proportion to GDP. The payment would represent an additional
cost for Member States, which could be financed by jointly guaranteed long-term
loan.

Classification-JEL:
Keywords:
Pages: 170-185
Volume: 23
Issue: 2
Year: 2024
File-URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-23-2-fa2-kiss-szapary.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:23:y:2024:i:2:p:170-185