The move by the European Commission to introduce “fair minimum wages” has cleared another hurdle.

After the European Parliament, the Council of Ministers, the body of the member states, also supported the proposal on Monday.

The EU thus defines uniform criteria according to which the member states are to set their minimum wages.

This includes the general development of wages, the development of productivity, but also the purchasing power of minimum wages with a view to the cost of living.

Hendrik Kafsack

Business correspondent in Brussels.

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There is no provision for a general lower limit for national minimum wages, for example in relation to the median income in a country. It is mentioned only as a non-binding guideline that a fair wage should exceed 60 percent of the median income or median wage.

The European Commission originally wanted to make this more stringent.

In doing so, however, it would have exceeded the EU's competences anchored in the EU treaties.

There is also no obligation to introduce minimum wages.

There is currently a statutory minimum wage in 21 Member States.

Austria, the Scandinavian countries and Italy are not included.

Germany would have to adapt its rules.

So far, the German minimum wage commission has been oriented towards the rise in collectively agreed wages, criteria such as purchasing power or productivity play a secondary role in their procedures.

The minimum wage of 12 euros agreed by the coalition of the SPD, FDP and the Greens, however, exceeds the threshold of 60 percent of the median wage.

Collective bargaining coverage should increase

In the end, the second aspect of the new law is likely to have greater effects - also for Germany - the stipulations that collective bargaining agreements should apply to at least 70 percent of employees in the states. The Commission had proposed this because the states with high collective bargaining coverage pay higher wages. If the states do not reach this threshold, they have to submit an action plan to the Commission on how they want to change this. In Germany the proportion is currently only 50 percent.

There is also a risk of a dispute over this point with the European Parliament, with which the Council of Ministers still has to agree on a common position so that the new EU law can come into force.

The parliament wants to oblige the states to a collective wage bond of 80 percent.

Only a few countries exceed the threshold: Austria, France, Italy, Belgium, Finland, Denmark and Sweden.

With the exception of France and Belgium, however, these are all countries with no statutory minimum wage.

The ministers of Denmark and Hungary voted against the proposal.

Germany and Austria abstained - in the case of Germany because of the change of government.

State Secretary Rolf Schmachtenberg, who represented the incumbent Labor Minister Hubertus Heil (SPD), made it clear that Germany basically supported the text.