Don't estimate "output gaps." Such estimates always, always, always underestimate the true need for fiscal expansion. (Both for structural, methodological reasons and because they are trivial to manipulate for partisan political advantage, and those who have access to make such manipulations are normally biased toward deflation.)

Simply pay out a percentage of EU nominal GDP per capita equal to the higher of the EU overall unemployment rate or the simple, unweighted average of the national unemployment rates.

It should be a wholly separate facility from the rest of the EU budget, so as to protect it from partisan tampering and the temptation to divert the funds for other purposes.

Your proposed funding scheme would have made Charles Ponzi balk, but then again the rules it is designed to circumvent are the kind of transparently bad-faith nonsense that invites this sort of Rube Goldberg solutions.

- Jake

Friends come and go. Enemies accumulate.