A Eurozone Reinsurance Union to tackle inequality? SURE as a pathway through fiscal solidarity hurdles

How to explain the resurgence of fiscal solidarity in the EU amidst the pandemic? After the Euro Area debt crisis, moral hazard concerns seemed to preclude any form of cross-border fiscal solidarity in the EU. The creation of SURE, an EU financial tool to support national short-time work schemes however showed that innovative solutions could be found to not only reduce the asymmetric impact of different risk exposure across EU countries, but also mitigate within-countries’ inequalities in job loss risks. Drawing from document analyses and 17 interviews with EU and national policymakers, this study explores the politics underpinning SURE’s adoption following a decade of heated and unsuccessful debates on the European Unemployment Reinsurance Scheme (EURS). Through the lens of ‘purposeful opportunism’, the article illustrates how the Commission leveraged on prior EURS insights and an emerging consensus on short-time work schemes to craft a politically acceptable solution. Overall, SURE helped position the Eurozone as a Reinsurance Union or a holding environment for national welfare states. Looking ahead, exploring ways to propel the Union as a more permanent ‘second line of defence’ against macroeconomic shocks could contribute to further substantiating new, EU-wide, social rights codified in the European Pillar of Social Rights.