Green light from 27 to European framework

The 27 member states of the European Union on Monday adopted a common position on new European rules aimed at improving low wages in Europe, seen as a step forward against social dumping.

“Work must pay. We cannot accept that people who fully invest in their work still live in poverty,” the newspaper quoted Slovenian Minister of Social Affairs Janez Siegler Kralje as saying in a statement.

The European Commission’s legislative proposal, introduced in October 2020, provides binding rules for the 21 EU countries that already have a minimum wage in order to promote their increase, but does not set a uniform minimum for Europe.

The text does not require the introduction of a minimum wage in the six countries that do not have one (Austria, Cyprus, Denmark, Finland, Italy, Sweden).

The 27 are very divided

The common position of the Member States, confirming the correctness of most of this text, will allow to start negotiations with the European Parliament, which adopted its position at the end of November. Once an agreement is reached, member states will have two years to convert the legislation into their national law.

Historically, the 27 countries are deeply divided on the subject due to the diversity of national wage-setting systems and minimum wages vary widely within the European Union, ranging from €312 in Bulgaria to €2,142 in Luxembourg, according to figures released last year.

If countries, such as France, push for a “convergence” in low wages as quickly as possible, others are slowing down. Eastern Europe fears a rapid catch-up that will reduce its competitiveness. The Scandinavian countries oppose any state interference and question their social model based on well-proven collective agreements.

compromise

Monday’s compromise finally had “wide support” among member states “but a strong message not to deviate from the text was sent to the French” who will hold the EU’s six-month rotating presidency from January. A European diplomat expects “difficult negotiations” with Parliament.

The proposal encourages collective bargaining on wages and calls for a plan of action in member states where less than 70% of employees are covered by a collective agreement. It also obligates the 27 states to submit annual reports on their wage-setting mechanisms.

For countries with minimum wages, the text will impose greater transparency and better governance in its context, with “clear and stable benchmarks” dependent in particular on the level of wealth and productivity. It will require a “regular reassessment” of the minimum wage with the participation of the social partners.