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Mr Scholz also underlined his determination to introduce a financial transaction tax in Europe.

Berlin

GERMANY has suggested the creation of a Europe-wide unemployment insurance system to make the eurozone more resilient to future economic shocks, Finance Minister Olaf Scholz said in an interview published on Saturday.

The proposal, outlined in an interview with Der Spiegel magazine, is part of Germany’s efforts to seal a reform package together with France ahead of a summit of European Union leaders later this month.

“I’m in favour of supplementing national systems for unemployment insurance with a reinsurance for the overall eurozone,” Mr Scholz said in the interview. If a eurozone member faces an economic crisis that leads to massive job losses and a heavy burden on its social-security system, the country could borrow from this joint reinsurance fund,” he said. “Once the recession is over, the country would pay back the funds it borrowed.”

Asked if Germany would bear the risk of this new scheme, he replied: “No, Germany profits. The German Federal Employment Agency’s reserves would remain untouched, and no debts will be communitised.”

The minister said the step would strengthen the financial stability of the eurozone as…