Swexit warning: EU faces rebellion from two member states over major wage plans for bloc

Sweden slams EU on call for states to determine minimum wage

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EU leaders have been locking horns on Brussels’ plan to introduce a standardised minimum wage across all member states. The proposal, introduced at the latest EU social summit in Porto, was promptly rejected by Austria and Hungary as ill-advised due to large differences in the level of development between EU states.

Now Danish and Swedish union leaders are threatening to bring the EU before the European Court of Justice as they fear Brussels’ imposition would have serious consequences on their taxpayers.

Speaking to French daily Le Monde, Torbjörn Johansson, responsible for collective agreements at the Swedish trade union center LO, said the issue also risks sparking a debate on his country’s membership of the bloc.

He said: “Swedish unions must start to question whether joining the European Union was a good decision.”

Therese Guovelin, vice-president of LO, said Swedish workers were reluctant to approve the draft European directive on minimum wages.

She said: “We are, of course, in favour of a social Europe and we are convinced that the agenda has good intentions in this regard. But the only way for us to accept this directive is for us to be completely excluded.”

She added: “This will inevitably weaken our model of parity negotiation.

“We risk seeing an increasing intervention of the State which, according to the directive, must monitor its application and report to Brussels.”

For months, the Danish and Swedish social partners have campaigned against what they see as a threat to the Scandinavian economic and social model.

In the two countries, there is no minimum income registered in the law: the level of wages is regulated within the framework of collective agreements, negotiated by the social partners, without political intervention.

In Sweden and Denmark, respectively 90 percent and 80 percent of jobs are covered by these agreements.

EU heads of state and government met in Portugal at the beginning of May to discuss the bloc’s social affairs strategy for the next decade.

Speaking after talks with Austrian Labour Minister Martin Kocher, Hungarian minister Laszlo Palkovics said the two countries will “accept the basic principles and will take the methods into consideration, but will not accept this area being taken away from member states”.

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A few days ahead of the summit, Mr Kocher of the Austrian People’s Party said the EU lacks competence in the area of labour policy and therefore his government could not accept giving away its sovereign powers to decide on such an issue.

Mr Palkovics also noted Hungary was opposed to a unified European tax system.

According to the Hungarian stance, control over raising certain types of tax should stay with member states to accommodate “diverse levels of development and economic structures”, he said.

Should, however, the EU decide to unify the system, “a number of adjustment tools are available”, he added.

At the summit, leaders ended up adopting a joint declaration to strengthen social Europe, but the text is not binding.

Speaking to Le Monde, French Minister for European Affairs Clement Beaune said: “The Porto summit took place at this pivotal moment when we are beginning to project ourselves into the post-crisis period, to study how to strengthen the European model to respond to the anxieties of citizens, especially young people.

“It is not technocratic or distant.

“The declaration strengthens the basis of social rights adopted in Gothenburg in 2017 and rolled out across Europe, such as parental leave and, soon, European minimum wages.

“It was supported by the significant involvement of the social partners.

“The object is to demonstrate that Europe is not a competitive jungle that pulls down to the detriment of citizens: on the contrary, it can and must protect.”

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