Towards Minimum Income Protection in Europe: Budgetary and Political Obstacles to Overcome

Abstract

A commonly heard proposal in academic and policy circles alike is for the introduction of an obligation for all Member States to guarantee a dignified minimum income to their citizens. The accelerated integration that has taken place over the past two decades, the consistent and repeated presence of the necessity of adequate minimum income protection in European political discourse, and the EU2020 poverty targets strongly suggest that, if a decisive step is ever made towards binding measures in the field of social security, then it is quite likely to involve arrangements regarding minimum incomes. In this article we consider the impact of the introduction of such an arrangement at the European level. We identify four obstacles to overcome. First is the uncertainty over the most appropriate way of defining an adequate minimum income. Secondly, the budgetary burden of raising social assistance benefits would be quite substantial, especially in the poorer Member States. Thirdly, improving minimum income protection for the unemployed would generate significant unemployment traps. Finally, it is argued that the legal, and especially the political, feasibility of a Directive on Minimum Income that would be legally binding for the Member States remains highly uncertain. We therefore conclude that, given the great heterogeneity between countries, any binding instrument on minimum income will have to be worded flexibly, introduced gradually, and implemented in unison with a convergence in activation measures and minimum wages. Arguably, in this context, priority should be given to measures aimed at covering the minimum costs of child-rearing, restricted in an initial phase to guaranteeing to all families with children an income equal to 40 per cent of median standardised income.