A new path for Europe?

Urged by trade unions, tens of thousands of people from 21 countries took part in a rally in Brussels recently, calling for a “new path for Europe, a more social one.

Corina Cristea, 02.05.2014, 13:40

As Bernadette Segol, secretary general of the European Trade Union Confederation put it, their message “is simple, and one which EU leaders do not want to hear — that their policies for dealing with the financial crisis are not enough and have caused a mounting social and economic crisis.” Pleading for substantial investments needed for sustainable development and high-quality jobs, the protesters spoke about the need for a “Marshall Plan” to restart the European economy. At present, over 26 million Europeans are unemployed, which is 10 million more than in 2008, and in 18 out of the 28 EU member states salaries have plummeted, trade union warns. As for Europe’s youth, things are even worse. Segol mentioned that 7.5 million young Europeans are not in work, education or training, and that “Europe risks a lost generation — lost to unemployment, lost to migration and lost hope.”

The number of European workers seeking employment in Member States that pay higher wages was also criticised by protesters—most of them from France, Poland, Denmark and Greece—who argued that the salaries paid to all workers should be similar, so as to ensure equal employment opportunities. A minimum EU-wide salary of 1,500 Euro was mentioned as an essential measure to boost the European economy.

According to an IMF report, in Romania, the minimum salary remains low compared to other countries in the region, in spite of an increase expected this year. The minimum wages will be raised from around 180 euros in 2013 to a rough 200 euros this year, in two phases. In Romania, the minimum salary is the second smallest in the region, after the one in Bulgaria — 158 euros — half salary from other emergent EU countries such as Croatia, Poland and Slovakia. Economic analyst Aurelian Dochia says that Romania’s level of development is still way below the one in other European countries, in spite of the average income per capita having reached 50% of the European average, from only 26% in 2000. This can be explained by the fact that Romanians spend a large share of their budget on basic necessities.

Aurelian Dochia: “This tendency it unlikely to change in a predictable future. If things go well, we could reach 75% of the European average in the next 10 or 15 years or it could take us longer than this. It’s only when we reach this level that we can see some structural changes in terms of consumption.”

According to the latest report made public by the National Institute of Statistics, Romanians have smaller salaries than their monthly needs. The ratio between income and expenditure for each household shows that Romania’s 3.5% economic growth is not mirrored, for the time being, in the population’s living standards. The statistics also show that Romanians allot almost three quarters of their revenues to consumption, while over 15% of Romanians’ expenses go into taxes, duties and other contributions.

Romanians spend over 40% of their money on food and non-alcoholic beverages, the rest going into bills for running water, electrical and thermal energy, natural gas, fuel, furniture and housekeeping. Only 0.5% of the money is spent on education. Economic analysts say that an abrupt increase in the minimum salary might endanger the employment options of those poorly trained, of those who have short-term labour contracts and of young employees. All these could make many of them migrate towards the black labour.

László Andor, EU Commissioner for Employment, Social Affairs and Inclusion, has warned that black labour does not only expose workers to dangerous working conditions and to small salaries, but it also deprives governments of revenues and undermines social protection systems. In order to counteract this phenomenon, the European Commission has issued a collaboration platform for the prevention and discouraging of black labour.

This project is aimed at boosting cooperation among member states so as to more efficiently fight illegal work. The platform brings together national authorities, labour inspectors as well as social security, taxes and migration authorities, to exchange good practices in the field. Latvia, the Netherlands and Estonia, with 11% each, have the biggest number of people working without legal documents.