#EUFridays by JEF Hungary #27
Richard Benussi
Jun-11-2022
Agreement is reached between the European Parliament and the member states regarding an EU-wide minimum wage
In what has been labeled as a hug win for progressives, the European Parliament and the member states have agreed to introduce a minimum wage across the bloc in order to ameliorate the lives of each citizen. This new plan will not make one single minimum wage for all the 27 member states, but instead each member state will have its own minimum wage which will represent the living costs within that country. This new initiative is aiming to reduce poverty and ensure that every citizen can maintain a certain standard of living while earning a minimum wage.
Although most of the member states already have a minimum wage, 6 countries (Austria, Cyprus, Denmark, Finland, Italy, and Sweden) do not. However, the brains of this initiative mentioned that they would not force countries, such as Denmark and Sweden, to adopt this as these countries are historically known for having strong trade unions that use a “collective pay bargaining” in order to ensure better wages for its members. Alongside skyrocketing prices due to inflation, this initiative seeks to help over 24 million European citizens who earn minimum wage in their respective countries to live a better lifestyle.
BBC (https://www.bbc.com/news/world-europe-61719554)
Inflation causes the Eurozone to increase its interest rate
On the 9th of June, President of the European Central Bank, Christine Lagard, announced that the Eurozone will increase its interest rate by 0.25 percentage points starting from July first. This has been the first interest rate increase in over 11 years as inflation has been rapidly escalating, in part due to the war in Ukraine, but as well due to the effects caused by the pandemic on the economy of the member states.
Although this is being presented as a temporary solution, the interest rates could be further increased starting in September. The war in Ukraine has caused heavy increases in gas and oil, which many EU member states are highly dependent on, causing sharp price increases. This is also a result of an increase in food products as well since the EU receives a tangible amount from Ukraine. According to EUROSTAT, last month saw the Eurozone inflation increase to “8.1%, a new record”, this has caused problems for the member states which is why the ECB is attempting to curb the inflation by increasing the interests’ rates until the Eurozone’s economy is more stable.
CNN (https://edition.cnn.com/2022/06/09/economy/ecb-interest-rates/index.html)
MEPs disgruntled by the Commission’s decision to approve Poland’s recovery plan
In this week’s plenary session in Strasbourg, MEPs voiced their deep concerns about the European Commission’s decision to approve Poland’s €35.4 Billion recovery fund to President Von der Leyen as she attempted to defend her actions, even though there are still serious concerns about Poland’s judicial reforms and rule of law. The President of the Commission tried to reassure MEPs that no funds will be given to Warsaw if reforms are not taken and deemed acceptable by EU Law.
This did not seem to comfort the MEPs as they considered this as the Commission reneging on their promise to ensure that these funds will only be given to the member states that fulfill all the criteria. Most representatives of the Political Groups agreed that this was simply “watering down” the strict rules that were agreed upon for this special fund. This disagreement between Poland and the EU stems from the fact that Poland created a disciplinary chamber of the country’s Supreme Court which was found by the European Court of Justice to be in confliction with EU Law. This escalated so far, that three high-ranking MEPs tried initiate a vote of no-confidence against the President herself, although it did not receive the minimum number of MEPs to trigger it.
DW (https://www.dw.com/en/poland-european-commission-unlocks-covid-funding/a-62002660)
Picture link (https://www.businesstoday.com.my/2022/05/23/supply-chain-disruptions-could-cost-7-7-of-eurozone-gdp-in-2023/)