Facts: Minimum wages in the EU
In October 2020, the European Commission presented a proposal for a directive on minimum wages in the EU, with two main points.
One is the minimum wage itself. Countries that have systems where wages are set by law are urged to have clear criteria for how wages are calculated and updated. However, no figure or level is proposed centrally by the European Commission.
The second is about increased support for the system of wage setting through collective bargaining between the social partners. In the agreement reached, countries where less than 80 percent of the workforce is covered by collective bargaining are urged to develop plans to actively support negotiations.
The first paragraph of the proposal already emphasizes that it is not a matter of forcing on countries a system with statutory minimum wages. Above all, however, Sweden and Denmark have warned of the risk that the European Court of Justice will ultimately rule that the rules must be followed by all.
A compromise agreement was reached between negotiators from the European Parliament and the Council of Ministers on 7 June. A final approval is expected later this summer or this autumn.
Negotiators from the European Parliament and the EU Council of Ministers agreed last week on a compromise on the European Commission’s proposal on how a minimum wage can be guaranteed throughout the EU.
– A historic text, says Olivier Dussopt, newly appointed Minister of Labor in the French Presidency, when the Council of Ministers reviews the compromise at a meeting in Luxembourg on Thursday.
– A good result for Europe, a good result for European workers and something that shows that the EU works. This directive is balanced, ambitious and establishes a stable European framework, in turn claims Labor Commissioner Nicolas Schmit.
Nordic resistance
However, the agreement is rejected in principle by Sweden, where both the government, the opposition, trade unions and the business community have constantly fought for no directive to be created at all.
From the very beginning, Sweden has stated that wage setting should take place as close to those affected as possible, nationally and in Sweden exclusively by the social partners. We can not support a directive on minimum wages, the Swedish representative stated at Thursday’s meeting, State Secretary Rasmus Cruce.
Denmark also votes no, for the same reasons of principle.
– We are concerned about the significance of this binding directive for our labor market and the independence of the parties in the future, says Minister of Labor Peter Hummelgaard.
Does not change anything
The opposition is partly due to concerns that a directive could ultimately threaten the Nordic wage setting models – something which the European Commission has stated, however, is not the case. As the final compromise looks, Sweden does not expect to have to do anything again.
– The directive does not require member states with well-functioning collective bargaining systems to change their models. We will not change our system, Cruce emphasizes inside the meeting.
Formally, the new directive is expected to be nailed down by the Council of Ministers and the European Parliament later this summer or this autumn. Sweden and Denmark will vote no – which, however, does not change anything in substance.