Europe is in deep trouble – economically, socially, and politically. We need new, bolder and stronger instruments to counter the forces of disintegration. A partial basic income paid to all Europeans – a Eurodividend – could become the policy instrument that safeguards the EU and especially the Eurozone from asymetric economic shocks and reconciles citizens with the idea of European integration.
Today, the risk of poverty and social exclusion levels in the EU and in particular the precarity of young people, child poverty and in-work poverty are extremely worrying whilst the prospects of the EU’s 2020 poverty target (i.e. to lift 20 million people out of poverty by 2020) look rather dim. Moreover, unemployment levels remain very high and particularly affect young people whereas the technological and digital revolution is affecting employment in various aspects, through the replacement of a great amount of jobs, the reorganisation of the workplace and the increase of the gap between productivity gains and income earned by workers. Finally, in the Eurozone, the introduction of the euro has produced increasing economic divergence between deficit and surplus countries (in terms of GDP per capita, labour productivity or unemployment levels among others) as well as important social imbalances in terms of public investment in education, healthcare, or social security. Continue reading “Eurodividend: A partial basic income paid to all Europeans”
Criticizing is easy. Making proposals is harder. Here is one, simple and radical, yet — I shall argue — reasonable and urgent.
Euro-dividend is how I shall call it. It consists of paying a modest basic income to every legal resident of the European Union, or at least of the subset of member states that either have adopted the Euro or are committed to doing so soon. This income provides each resident with a universal and unconditional floor that can be supplemented at will by labour income, capital income and social benefits. Its level can vary from country to country to track the cost of living, and it can be lower for the young and higher for the elderly. It is to be financed by the Value Added Tax. To fund a Euro-dividend averaging 200 Euros per month for all EU residents, one needs to tax the EU’s harmonized VAT base at a rate of about 20%, which amounts to close to 10% of the EU’s GDP. Continue reading “The Euro Dividend by Philippe van Parijs”
The four characteristics that make the difference between the euro zone and the dollar zone and a concrete proposal to save the euro.
The vulnerability of the European currency union is ultimately rooted in the extreme weakness of two major buffering mechanisms that have proved crucial to the sustainability of the currency union formed by the United States: inter-state mobility and inter-state solidarity. As little hope can reasonably be staked in increased mobility between member states of the European Union, it is of crucial importance to explore the way in which a far higher level of solidarity could be institutionalized between member states. After having considered and rejected a number of options, the paper ends up focusing on a universal euro-dividend paid to every resident of the European Union (or of the Eurozone) and funded exclusively or mainly by a Value Added Tax. Taking for illustrative purposes a monthly euro-dividend of 200 euros funded by a 20% EUwide VAT, it explores some of the key consequences of such a set up and the conditions of its political feasibility. Continue reading “No Eurozone without Euro-dividend”