The long-term alignment of the living standards of EU citizens and the economic performance of the member states is a goal enshrined in the treaties establishing the European Union. However, considerable social and economic inequalities still exist between and within the member states.The COVID-19 crisis has exacerbated some of these inequalities yet further. Germany therefore wants to work during its Presidency of the Council of the EU to limit the social impact of the crisis and to strengthen upward economic and social convergence in Europe. Economic recovery and reducing social inequalities in the EU must go hand in hand.

To achieve these goals, Germany advocates the development of an EU framework for national minimum wages and a European framework for national minimum income protection systems in the EU member states. In addition, we intend to consider the Commission’s forthcoming proposal for a European Unemployment Reinsurance Scheme in the Council.

Why does the EU need fair minimum wages?

Roughly every sixth employee in the EU works for a low wage. Most member states already have statutory minimum wages to protect such people. All other member states rely on collectively agreed wage floors. But the differences between the member states are still too high and the minimum wages currently in force do not provide full protection for workers everywhere.

What are the priorities of the German Presidency?

  • Given the persistent social inequalities in Europe, Germany espouses the development of a European framework for fair national minimum wages. The aim is not a uniform European minimum wage for everyone, but the creation of an EU framework for national minimum wages that strengthens the protection of employees, bolsters the social partnership and its prominent role in shaping working conditions, and supports income stabilisation also in times of crisis.
  • Moreover, Germany wants to develop a European framework for national minimum income protection systems, in order to effectively combat poverty and social exclusion across Europe. We must make sure that the COVID-19 pandemic does not lead to greater risks of poverty, as it so easily could do.
  • We intend to evaluate the proposal for a European Unemployment Reinsurance Scheme, announced by the Commission, in the Council. This is mentioned in the Trio Presidency Programme as a key step for the further implementation of the European Pillar of Social Rights.
  • Germany will also seek to improve conditions for seasonal workers. The COVID-19 pandemic has drawn further attention to existing shortcomings.

What are the next steps?

On 16 January 2020, the European Commission launched a two-stage consultation with European social partners (trade unions and employers’ organisations) on a potential EU initiative for fair minimum wages. The second-stage consultations are taking place from 3 June to 4 September 2020. The Commission plans to present a proposal for a legislative instrument in the fourth quarter of 2020, taking into account the input from the social partners.

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