On Wednesday morning, the president of the European Commission, Ursula von der Leyen, gave her state of the union speech in the European Parliament in Brussels. Von der Leyen announced that the Commission will put forward a legal proposal on minimum wages. The Swedish Confederation of Professional Employees’ (TCO) analysis is that this could pose a severe threat to collective bargaining and the Swedish wage formation model. Apart from that, the EU does not have the legal competence to regulate wages. TCO urges the Swedish government to remain firm in its opposition.
– It is very distressing that the Commission still leaves the door open to putting forward legislation on minimum wages. The Treaty on the Functioning of the European Union clearly states that the EU does not have the competence to regulate wages. A legally binding measure would be unlawful and amount to a significant extension of EU powers. It is extremely important that the Swedish government keeps pressing its position, along with opposing any sort of legally binding measures that would risk to harm the Swedish model of industrial relations, says Therese Svanström, President of TCO.
Instead of legislation, TCO wants the EU to play a more active role in strengthening the social partners in the Member States, as it is crucial for improving labour markets across Europe.
– I am well aware of and respect the great differences in legislations and industrial relations between Member States. But an EU minimum wage is not the solution for the challenges we are facing. What Europe needs is stronger social partners – and the EU could do a lot to strengthen social dialogue where it is needed. The Swedish wage formation model, which is built upon strong social partners, has provided real wage increases for decades as well as successfully preventing very low wages. The European Commission’s ambitions risk making great harm, says Therese Svanström, President of TCO.