Universal basic income: An option for Europe?

Views on a guaranteed basic income vary drastically across Europe — some see it as a springboard, while others call it a hammock. Now, an EU citizens' initiative is urging the European Commission to take up the issue.

What if people no longer had to worry about their income? Marwa Fatafta has often asked herself that question. "So much anxiety and stress would simply vanish," said Fatafta, who came to Germany as a Palestinian migrant and made a life for herself in Berlin.

"To me, it was clear quite early on that freedom also means being financially independent," Fatafta told DW. At first, she had hoped to live from her art, but when she realized it would not give her a regular income she gave up that dream. Today, Fatafta works for Access Now, an organization that promotes digital personal rights.

Fatafta is one of about 2 million people in Germany who has applied to the Basic Income Pilot Project. Starting next spring, 122 of the applicants will receive €1,200 ($1,422) per month for three years. No strings attached.

The study initiated by the German Institute for Economic Research (DIW) and My Basic Income, a Berlin-based nonprofit, hopes to determine the effects of an unconditional universal basic income (UBI) on society.

Read more: Money for nothing: Germany starts basic income experiment

Different financing plans

"The study is a major opportunity to transfer the theoretical debate on unconditional basic income that has been ongoing for years into social reality," said Jürgen Schupp of DIW, who heads the survey. "We want to find out whether paying out an unconditional basic income over a longer period of time leads to statistically significant changes in actions and perceptions."

The concept of a basic income guarantee is quite simple: The state gives everyone a set amount of money every month, no matter who they are or what they do. The income cannot be reduced, nor do the recipients have to earn the money in any way. They may, of course, work to earn more money.

To ensure that the state has enough money to give its citizens a monthly basic income, various financing plans have been suggested, including higher income taxes, inheritance taxes or financial transaction taxes. Depending on the financing plan, people with a low income would have more money at their disposal, the so-called middle class would have about the same amount and the very rich would have a bit less.

Citizens' initiative on UBI aims to strengthen EU unity

Many European countries are debating the idea of a basic income, and a citizens' initiative has now called on the European Commission to present a proposal for unconditional basic income throughout the bloc. The idea is to reduce regional differences, while strengthening economic and social cohesion across the continent.

If the initiative manages to find at least 1 million EU voters who are willing to sign it by September 25, 2021, from at least seven different EU member states, the Commission will consider the idea.

Read more: Universal income gains traction on the right

At the moment, though, such a task appears to be an uphill struggle. Just over 75,000 EU citizens had signed up by the end of November, two months after the initiative was launched. But despite the slow start, the activists have already reached a milestone in Slovenia, which has become the first country to pass its country threshold of 5,640 signatures. Ronald Blaschke, coordinator of the campaign in Germany, gave credit to "a young, dynamic group [that] managed to reach a lot of youth on Facebook, Twitter and Instagram."

Supporters in France, however, are more heterogeneous and include members of the environmental movement, people dedicated to fighting poverty and other liberal thinkers, Blaschke told DW. "You can already see that the debate in France is much broader than in other countries." But in Poland or Malta, countries that according to Blaschke have no major civic movements or citizens' groups, public debate on the issue is almost non-existent.

Switzerland was the first European country to vote on an unconditional basic income in 2016. But the popular initiative failed miserably, with almost 77% of the Swiss rejecting the idea.

Finland tries 2-year experiment

Despite such setbacks, the idea of a universal basic income has played out over and over again, most recently in Finland. In 2017 and 2018, 2,000 randomly chosen unemployed Finns received a monthly basic income of €560 instead of the usual unemployment benefits — with no applications, no forms and no bureaucracy. They were allowed to earn as much money on the side as they wanted.

According to the study, the participants were happier and more relaxed because of the basic income. The financial security offered them the opportunity to attempt new projects, without the risk of possibly going bankrupt. But the study didn't record any negative effects on the country's labor market: On average, the participants worked just six days more per year than the people in the control group without a basic income.

Would people still work?

The effect on the labor market is one of the most controversial issues surrounding the introduction of a basic income. Critics have feared that the majority of citizens would prefer not to work at all, if given the chance.

However, a study by Splendid Research, a market research institute based in Hamburg, has shown that three out of four Germans would continue to work, regardless of the level of a basic income. "Instead, people would rather just reduce their working hours in order to have more time for family or volunteer work," said Blaschke.

Marwa Fatafta, too, said she wouldn't quit her job if granted a basic income. "I like my job," she said, but admitted that an unconditional income would reduce the pressure. "It would be nice if people could make professional decisions not out of fear but out of a positive feeling," she said. "And if we could do things because they have a meaning for society and for us — and not just market value."