Danish And Swedish Socialists Fight Against Minimum Wage Directive

By János Ammann

(EurActiv) — The minimum wage directive is a key policy goal for European Social Democrats, but leftist parties and trade unions in Denmark and Sweden see it as a danger for their labour market model. They have collected enough signatures to force a vote in November’s European Parliament plenary, potentially delaying the directive for months.

When the Parliament’s employment and social affairs committee voted overwhelmingly in favour of a report aimed at consolidating the Parliament’s position on the EU’s minimum wage directive, European Social Democrats celebrated a preliminary win for their political agenda.

“A raise of minimum wages all over Europe is part of our election manifesto,” Agnes Jongerius,  the co-rapporteur of the report and an MEP for the Socialists and Democrats (S&D), told EURACTIV.

The Nordic model

For Social Democrats from Denmark and Sweden, however, it was a dark day.

“We are afraid that our model in the Nordic countries will disappear,” Danish EU lawmaker Marianne Vind told EURACTIV.

The Danish and the Swedish labour markets are almost exclusively organised around collective bargaining. Trade unions and employers negotiate working conditions directly with each other with close to no involvement of the state.

The minimum wage directive as proposed by the European Parliament’s employment committee would force member states who have a collective bargaining coverage of less than 80% to draw up national action plans to bring coverage above this level.

“The Directive as a whole seeks to politically impact wage setting. This is incompatible with the Nordic wage setting systems relying on social partners bargaining autonomously without political interference,” Johan Danielsson from the Swedish Social Democrats told EURACTIV.

EU meddling

Jongerius, however, found that there are multiple safeguards for the Swedish and Danish model to remain unharmed. “There is nothing in this directive that is posing an obligation on Sweden and Denmark to introduce a statutory minimum wage,” she said.

The Danish and Swedish politicians remain unconvinced by these safeguards. They fear that the text will allow a future EU Commission or the EU Court of Justice to impose obligations on Denmark and Sweden based on this directive.

“This is really frustrating,” said Heidi Rønne of the Danish Trade Union Confederation, who represents them in the European Social and Economic Committee.

“There has always been some skepticism towards the EU on the left and in trade unions in Denmark. But we were always confident and could tell people there would be no EU meddling with our labour market. That is no longer the case,” she told EURACTIV.

Jongerius, herself a former trade unionist, said that she understood the fears.

“But how do you counter fears with a legal text? If they are afraid, it is difficult to convince people,” she argued.

A small window of opportunity

The large majority in favour of the report drafted by Jongerius and her co-rapporteur Dennis Radtke in the Parliament’s employment committee would allow the report to be used as a basis for negotiations with member state ministers, without further approval from the European Parliament.

The EU Council of ministers is expected to consolidate the member states’ position in early December.

This means that the negotiations between parliament and the council can start under the French council presidency in the first half of 2022.

“We know that the French really want to do business on this directive. So, there is a window of opportunity for the directive to pass before the French presidential elections in April 2022,” Jongerius explained.

Danish and Swedish members of the European parliament, however, have gathered enough signatures to force a vote in the European Parliament plenary on whether to open the report to amendments or not.

If the Parliament votes in favour of opening the report to amendments, supporters of the current version fear the directive will be bogged down in a flood of amendment proposals, leading to a delay of several months, thus missing the “window of opportunity” under the French presidency.