This paper analyzes the stabilizing properties of a European Unemployment Insurance (EUI) scheme, inspired by the SURE scheme introduced during the COVID-19 crisis. The EUI is designed to complement national unemployment insurance schemes, providing support during severe recessions without replacing them. The study uses the NiGEM macroeconometric model to simulate the impact of an EUI on consumption, GDP, and unemployment in eleven euro area Member States from 2000Q1 to 2021Q4. The results show that a relatively small EUI could significantly contribute to stabilizing economic developments, cushioning part of the disruptions during crises. The EUI would help lower the amplitude of national cycles and increase the synchronization of cycles across member countries. The paper also highlights the importance of a common stabilization function in the euro area, as the current lack of automatic fiscal stabilizers limits the resilience of the monetary union to economic shocks. The analysis supports the idea that a European unemployment insurance system could be an important step towards macroeconomic smoothing within the euro area, helping to mitigate the economic and social impact of large economic shocks. The study also discusses the design and modeling of the EUI, including the triggering mechanisms, the size and financing of the scheme, and the scenarios under which it would activate. The results show that the EUI could provide significant support during periods of severe economic downturn, particularly in countries with high unemployment rates. The paper concludes that a European unemployment insurance system could be an important tool for stabilizing the euro area economy.This paper analyzes the stabilizing properties of a European Unemployment Insurance (EUI) scheme, inspired by the SURE scheme introduced during the COVID-19 crisis. The EUI is designed to complement national unemployment insurance schemes, providing support during severe recessions without replacing them. The study uses the NiGEM macroeconometric model to simulate the impact of an EUI on consumption, GDP, and unemployment in eleven euro area Member States from 2000Q1 to 2021Q4. The results show that a relatively small EUI could significantly contribute to stabilizing economic developments, cushioning part of the disruptions during crises. The EUI would help lower the amplitude of national cycles and increase the synchronization of cycles across member countries. The paper also highlights the importance of a common stabilization function in the euro area, as the current lack of automatic fiscal stabilizers limits the resilience of the monetary union to economic shocks. The analysis supports the idea that a European unemployment insurance system could be an important step towards macroeconomic smoothing within the euro area, helping to mitigate the economic and social impact of large economic shocks. The study also discusses the design and modeling of the EUI, including the triggering mechanisms, the size and financing of the scheme, and the scenarios under which it would activate. The results show that the EUI could provide significant support during periods of severe economic downturn, particularly in countries with high unemployment rates. The paper concludes that a European unemployment insurance system could be an important tool for stabilizing the euro area economy.