CSB Working Paper, 2012, 5: The EU and Minimum Income Protection: Clarifying the Policy Conundrum

Should the EU be involved in the governance of minimum income protection, and if it should, in which role precisely? This question raises a complex policy conundrum. We focus on a proposal by the European AntiPoverty Network (EAPN) for an EU Framework Directive on Minimum Income Protection, in order to examine three aspects of that policy conundrum: (1) the instrumental relevance of minimum income protection; (2) the unequal burden of the redistributive effort that would be required across the E…

Should the EU be involved in the governance of minimum income protection, and if it should, in which role precisely? This question raises a complex policy conundrum. We focus on a proposal by the European AntiPoverty Network (EAPN) for an EU Framework Directive on Minimum Income Protection, in order to examine three aspects of that policy conundrum: (1) the instrumental relevance of minimum income protection; (2) the unequal burden of the redistributive effort that would be required across the EU if the Union were to impose hic et nunc a minimum income guarantee of 60% or 40% of the median national income in all Member States; and (3) the impact on dependency traps, under the same hypothesis. We illustrate each of these observations empirically, using cross-nationally comparable data on income and living conditions (EU-SILC) and minimum income protection levels (CSB-MIPI). Since a harmonised minimum income scheme requires a significantly greater budgetary effort on behalf of some of the poorer Member States in Eastern and Southern Europe, it raises a complex question about the meaning of solidarity within the EU. Enhanced solidarity within Member States cannot be decoupled from enhanced solidarity among Member States – and vice versa. Simultaneously, the EU should put positive pressure on poorer and richer Member States to gradually improve the overall quality and efficiency of their welfare regimes. In this context, the prospect of gradually and flexibly introducing a more binding EU framework on minimum income protection may become realistic.