Solidarity in the European Monetary Union: what the people think and
what we ought to think
by Frank Vandenbroucke (University of Amsterdam)
This paper explores the concept of solidarity in the context of the European Monetary Union (EMU). Schelkle (2017) shows that solidarity (‘monetary solidarity’) is intrinsic to a monetary union. I argue that this monetary solidarity has to be completed with additional solidarity mechanisms. EMU needs a mechanism to buttress the ‘automatic stabilizers’ of its member states. An EMU-level re-insurance of the national unemployment insurance systems might achieve this. The rationale is one of risk-sharing and risk-reduction; it implies a ‘responsibility cut’, and it raises issues related to moral hazard and the interplay between insurance and redistribution. It can be conceptualized in terms of ‘reciprocity’ (Vandenbroucke, 2017a, 2017b).
In this paper, solidarity means that resources are shared with the aim of compensating actors for (disadvantageous) circumstances for which they are not held responsible. Depending on the circumstances for which actors are not held responsible, two types of solidarity can be distinguished: insurance and redistribution. Pure insurance means that actors are compensated for risks that cannot be foreseen at the level of the actors, but can reasonably be calculated at the level of a group of actors with identical risk profiles. Over a sufficiently long time span, there are no ‘net beneficiaries’ and no ‘net contributors’ in money terms; in welfare terms, all gain.
Solidarity takes the form of (deliberate) redistribution when actors are different with regard to the circumstances for which we do not hold them responsible, and when we are aware of those differences. Progressive taxation, which redistributes from economically talented individuals to less-talented individuals, is an example. Redistribution is often seen as a more demanding form of solidarity than insurance.
These definitions are normally applied to relationships between individuals but can be extended to relationships between states. In the first part of the paper, I delineate the concepts of inter-state insurance, between-country redistribution, reciprocity and moral hazard, and position them in the realm of theories of international distributive justice.
Are EU citizens ready to share the risk of unemployment crises across borders? How sensitive are they to the difference between insurance and redistribution? How sensitive are they to the proposal that benefiting from EU-level risk-sharing would depend on compliance with specific education, training or activation policies? A survey experiment conducted in 13 countries sheds light on this (Vandenbroucke et al. 2018). A question that exercises the policy community a lot, i.e. how tolerant such mechanism should be with regard to between-country redistribution, seems less important for citizens than for policymakers. Conditions w.r.t. education, training and activation carry more weight for citizens’ judgment.
The second part of the paper addresses the following question: to what extent do these survey results reflect principles of reciprocity (inter-state and interpersonal) in the minds of our respondents?
In the third part of the paper, I discuss the extent to which such survey results can bear on normative theorizing on European solidarity, drawing on the literature on the relationship between public opinion research and normative philosophy (e.g. Baderin et al., 2018).
References:
Baderin, A., Busen, A., Schramme, T., Luke, U., Miller, D. (2018), Who cares what the people think? Revisiting David Miller’s approach to theorizing about justice, Contemporary Political Theory, Vol. 17, Issue 1, pp. 69-104.
Schelkle, W. (2017). The political economy of monetary solidarity: understanding the euro experiment, Oxford: Oxford University Press.
Vandenbroucke, F. (2017a), Risk Reduction, Risk Sharing and Moral Hazard: A Vaccination Metaphor, Intereconomics, Vol. 52, May/June 2017, Number 3, pp. 154-159.
Vandenbroucke, F. (2017b), The idea of a European Social Union: a normative introduction, in: Vandenbroucke, F., Barnard, C., De Baere, G. (eds.), A European Social Union After the Crisis, Cambridge: Cambridge University Press, 2017, pp. 3-46.
Vandenbroucke, F., Burgoon, B., Kuhn, Th., Nicoli, Fr., Sacchi, S., van der Duin, D., Hegewald, S. (2018), Risk Sharing When Unemployment Hits: How Policy Design Influences Citizen Support For European Unemployment Risk Sharing (EURS), Policy Report 1 (December).
In this paper, solidarity means that resources are shared with the aim of compensating actors for (disadvantageous) circumstances for which they are not held responsible. Depending on the circumstances for which actors are not held responsible, two types of solidarity can be distinguished: insurance and redistribution. Pure insurance means that actors are compensated for risks that cannot be foreseen at the level of the actors, but can reasonably be calculated at the level of a group of actors with identical risk profiles. Over a sufficiently long time span, there are no ‘net beneficiaries’ and no ‘net contributors’ in money terms; in welfare terms, all gain.
Solidarity takes the form of (deliberate) redistribution when actors are different with regard to the circumstances for which we do not hold them responsible, and when we are aware of those differences. Progressive taxation, which redistributes from economically talented individuals to less-talented individuals, is an example. Redistribution is often seen as a more demanding form of solidarity than insurance.
These definitions are normally applied to relationships between individuals but can be extended to relationships between states. In the first part of the paper, I delineate the concepts of inter-state insurance, between-country redistribution, reciprocity and moral hazard, and position them in the realm of theories of international distributive justice.
Are EU citizens ready to share the risk of unemployment crises across borders? How sensitive are they to the difference between insurance and redistribution? How sensitive are they to the proposal that benefiting from EU-level risk-sharing would depend on compliance with specific education, training or activation policies? A survey experiment conducted in 13 countries sheds light on this (Vandenbroucke et al. 2018). A question that exercises the policy community a lot, i.e. how tolerant such mechanism should be with regard to between-country redistribution, seems less important for citizens than for policymakers. Conditions w.r.t. education, training and activation carry more weight for citizens’ judgment.
The second part of the paper addresses the following question: to what extent do these survey results reflect principles of reciprocity (inter-state and interpersonal) in the minds of our respondents?
In the third part of the paper, I discuss the extent to which such survey results can bear on normative theorizing on European solidarity, drawing on the literature on the relationship between public opinion research and normative philosophy (e.g. Baderin et al., 2018).
References:
Baderin, A., Busen, A., Schramme, T., Luke, U., Miller, D. (2018), Who cares what the people think? Revisiting David Miller’s approach to theorizing about justice, Contemporary Political Theory, Vol. 17, Issue 1, pp. 69-104.
Schelkle, W. (2017). The political economy of monetary solidarity: understanding the euro experiment, Oxford: Oxford University Press.
Vandenbroucke, F. (2017a), Risk Reduction, Risk Sharing and Moral Hazard: A Vaccination Metaphor, Intereconomics, Vol. 52, May/June 2017, Number 3, pp. 154-159.
Vandenbroucke, F. (2017b), The idea of a European Social Union: a normative introduction, in: Vandenbroucke, F., Barnard, C., De Baere, G. (eds.), A European Social Union After the Crisis, Cambridge: Cambridge University Press, 2017, pp. 3-46.
Vandenbroucke, F., Burgoon, B., Kuhn, Th., Nicoli, Fr., Sacchi, S., van der Duin, D., Hegewald, S. (2018), Risk Sharing When Unemployment Hits: How Policy Design Influences Citizen Support For European Unemployment Risk Sharing (EURS), Policy Report 1 (December).
