On 09 June just 10 days ahead of the Franco-German Council of Ministers meeting scheduled for 19 June and two weeks ahead of the European Council meeting (28-29 June), German Finance Minister Olaf Scholz (SPD) caused political shockwaves to reverberate across Germany with a proposal presented in the weekly Der Spiegel publication to establish a Europe-wide unemployment insurance system with the French press calling his proposals ‘a step towards Paris’. However a debate organized on 12 June by the Ifo Economics Research Institute and MEP Jakob von Weizäcker from the European Commission Berlin bureau, revealed deep splits between the conservatives and social- democrats over the concept that itself has been subject to longstanding debate within Europe. It is unlikely that the green light will be given to a system that purports to improve the ability to withstand economic shocks within the Eurozone.
A key SPD concept. As did Angela Merkel previously, Finance Minister Olaf Scholz also turned to the press to present his proposals for reforming the Eurozone. “I am in favor of the idea of overlaying national unemployment insurance systems with a Europe-wide re-insurance system that would apply across the whole of the Eurozone’, the Minister stated, echoing a key SPD concept. “If an EU Member State is hit with an economic crisis that generates massive lay offs and unemployment compensation costs then that State could borrow from a common shared re-insurance fund”, he explained, before adding, “Once the recession was over that EU Member State in question could repay the fund the monies borrowed.”
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