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Welcome to EU-Club! Minimum Wages for All to Boost Competitiveness

European workers and employees want money. No matter how unbelievable it sounds, workers in EU member states want to get paid for the work they do. Independently of how good or bad their work performance is. EU’s workers, employees, part-timers, one-day labourers claim, that the moment they leave home, go to work place and stay there for several hours, they need to have a monetary compensation. The same claims are risen also from those who work at home for third parties. This bottomless and unprecedented impertinence is heard more and more from workers all over Europe. And thus in times of crisis of all kinds: euro-crisis, debt-crisis, After-Easter-crisis, holidays-crisis, revenues-crisis, income-crisis, pension-crisis, identity-crisis, etcetera-crisis.

To tame all these revoltersin spe, the European Commission decided to introduce a minimum wage memorandum for all EU citizens who can call themselves lucky to have a work.  According to the prepared draft, minimum wages will be introduced in Germany where they do not exist, and wages will be raised in those countries, where the minimum wage is considered to tbe too low.

European news portal EurActiv stresses that “having a job is not a recipe against poverty in Europe. Indeed, more than 8% of European workers live with salaries that keep them below the poverty threshold, EU figures show.”

“The risk of in-work poverty is high, particularly in countries with uneven earnings distribution and low minimum wages, among people with temporary contracts and in low work intensity and single parent households,” reads the Commission communication, ‘Towards a job-rich recovery’, which the EU executive will publish on Wednesday. The draft has been prepared by EU commissioner in charge of social affairs, László Andor. He notes on the draft:

“Setting minimum wages help prevent a destructive race to the bottom in the cost of labour, and are an important factor in ensuring decent job quality.”

Minimum Wages across Europe

Most EU countries have already introduced a minimum wage but these often vary significantly. In Romania, it can be as low as one-fourth of the average wage. In Ireland, it is over half the normal wage, according to figures provided by the European Industrial Relations Observatory.

What’s more, an important group of countries, comprising Germany, Italy, Austria and the Scandinavian states, have no minimum wage at all. While Italy and Austria have a minimum salary through collectively agreed sector contracts, nearly one-third of workers in Germany have no right to a minimum salary.

The Commission can urge member states to review their employment and social policies, but the ultimate decision lies with national governments.

“Wage developments should take account of the competitive position of member states,” says the EU paper. In any case, the priority of the Commission remains to “establish wages that ensure competitiveness and provide income security.

Greece? Oh, No!

“Obviously we are not saying so to Greece,” the EU official explained to EurActiv. Indeed, Athens has already very generous social schemes, with minimum wages accounting for around half the average gross wage, peaking at almost 100% in the retail sector. In this case, minimum wages should even be lowered, as it is indeed happening.

Through promoting self-employemnt, combating undeclared work, reducing employer social security contributions would help reduce the high unemployment which reached 10% in the Euro area and more than 20% in Greece and Spain, says the draft. (Full Article Brussels to push for EU-wide minimum wage/EurActiv)

Every Greek citizen owes €33,000

President of the European Commission, Jose Manuel Barroso, will reveal today at the European Parliament his proposal on how to combat the economic crisis, how to boost growth and create jobs in Greece. German Sueddeutsche Zeitung acquired Barroso’s paper. According to Barroso’s genuine ideas, European Commission will propose Greece that wages undergo further cuts up to 15 percent.

The plans of EC president come too late. Employers started already before Easter to cut salaries up to 15 percent. That’s the second wave of wages cuts, the first was about 20%, for young employees under 25, it was 32 percent.

Unfortunately neither the EU minimum wages draft nor Barroso’s paper include any amendments that could enforce employers to pay the full salary/minimum wage as agreed. The practice of paying just a part, maybe a 25% instead of the full monthly salary has become very trendy in the Greek private sector in the last six months. People work, full or part-time, and see no full salary.

At the same time, Barroso’s paper mentions, that every Greek citizen owes 33,000 euro due to the debt crisis.  

Full list of minimum wages across Europe HERE.

 PS How will the states with humiliating minimum wages (Esthonia €290, Bulgaria €148, Latvia €280, Albania €143, Croatia €375) will manage to increase them, that’s another question. As to the question why there is no investment in these countries despite the minimum wages, there is no answer too. EU theories made by EU bureaucrats living in EU bubbles. Business as usual….

 

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2 comments

  1. The more I read of what the EU/troika are doing the Greek people the more convinced I become that they’re using it as an experiment, to see just how far they can go without a full frontal backlash against the EU itself, before using the same tactics on others.

    • keeptalkinggreece

      While I was suspicious about this idea at the beginning, I believe now that too. It’s a “war” and we’re not allowed to fight back.