Yesterday, Minister Robert Habeck was in Brussels to meet some of the new Commissioners. In an interview with journalists, he also explained why he had supported the relatively strict German position at the time of the negotiations on the EU debt rules. At the end of November, Habeck suddenly judged these rules to be a “security risk,” which was met with particular anger in the Federal Ministry of Finance.
“Yes, because the pressure to reach an agreement was then there,” said Habeck, explaining his support for the German negotiating position at the time. Since the fall of the coalition government, these constraints on agreement are clearly no longer there. Habeck spoke openly of the “contradiction” between the debt rules and the goal of higher defense spending.
Habeck sees a further problem with the EU debt rules in terms of their effect on competitiveness. He cited the Draghi report, according to which additional investments in the three-digit billion range are necessary every year. “And on the other hand, there is the Fiscal Structural Plan, which basically does not provide for this and makes it impossible,” he said.
The economy minister speculated that the EU debt rules might have turned out differently if these findings had been known beforehand. The catch with this argument is that the majority of Draghi’s findings – especially those relating to investment needs – were already known long before his report was published.
Have a nice day, hopefully without any security risks.
The Minimum Wage Directive was the most important social policy project in Ursula von der Leyen’s first mandate. In her second term of office, the head of the Commission must now ensure that the directive is implemented by the member states – as the deadline for this expired on Nov. 15. And the debates on this are already underway.
The Commission does not yet know which countries have already fully implemented the directive by the deadline. The review is starting now, it says. If it is found that the directive has not been implemented or not fully implemented, infringement proceedings could be initiated. Labor Commissioner Roxana Mînzatu made it clear in the hearing before the European Parliament that monitoring the implementation of the Minimum Wage Directive is a priority for her.
The aim of the directive is for countries with statutory minimum wages to set criteria in order to achieve an “appropriate” minimum wage level that also protects against in-work poverty. It is also intended to help increase collective bargaining coverage. To this end, the directive sets out three requirements:
But how binding are these requirements? That is controversial. Thorsten Schulten, Head of the Collective Bargaining Archive at the Hans Böckler Foundation’s Institute of Economic and Social Research (WSI), which is close to the workforce, believes that the directive is a kind of “soft hard law.” “The law is more than a recommendation, but is less binding than other directives due to its scope of application on wages and collective bargaining autonomy.” Wages and social partnership are the responsibility of the member states, but in his opinion, the four criteria for determining wage levels should be explicitly laid down.
It is also clear to many trade unionists that the directive is only fulfilled when these three requirements are fully applied. Minimum wages are only appropriate “if they correspond to at least 60 percent of the average overall economic wage of full-time employees (median wage),” according to the German Trade Union Confederation. In Germany, for example, this would entail an increase in the minimum wage to €15.27 for 2025, the DGB calculates. By way of comparison, the Minimum Wage Commission decided to increase the minimum wage by 41 cents to €12.82 for the coming year, citing the development of collectively agreed wages.
Employers, on the other hand, point out that these are only recommendations because the Union has no powers to force the states to do so.
The European Trade Union Confederation (ETUC) concludes that the member states are not implementing the minimum wage directive. In an evaluation at the end of October, the ETUC came to the conclusion that only six countries had so far launched a legislative initiative, namely: Belgium, Hungary, Latvia, Luxembourg, Poland, and Romania. However, ETUC also includes Austria among the countries in which the debate is still ongoing – although the country does not have a statutory minimum wage and the collective bargaining rate is over 80 percent.
Christina Hießl, who teaches European labor law at the KU Leuven, states: “We see that many states do not see themselves covered by the directive at all and do not make any changes to their laws.” Following an amendment by the Council, the directive now only has a very narrow definition of what constitutes a statutory minimum wage: When its level is determined directly by the legislator. According to this view, a minimum wage that is negotiated by social partners, as is the case in Germany, and then declared binding by the responsible ministry, for example, is not covered.
In Germany, the reaction to the directive has been contradictory. Labor Minister Hubertus Heil (SPD) emphasized in a letter to the Minimum Wage Commission that he would see the directive implemented if the Minimum Wage Commission took the reference value of 60 percent into account in its upcoming decision. Only a short time later, on Oct. 23, the BMAS declared in the Federal Law Gazette: “The Directive […] on adequate minimum wages in the European Union is implemented by the Minimum Wage Act.” In other words, the ministry sees no need for legal action. There is no need to present an action plan to increase collective bargaining coverage at this time, it says.
The Commission is likely to wait and see what the European Court of Justice decides. The ECJ is currently examining whether the EU has sufficient powers for the directive. Denmark has filed an action for annulment and the Advocate General’s opinion is expected on Jan. 14. “Only then will the Commission start its assessment,” says Hießl. Like the labor lawyer, many experts assume that the directive will pass largely unscathed.
Despite the dispute over implementation, collective bargaining expert Schulten has observed positive developments: “We are seeing that countries in Central and Eastern Europe in particular have begun to introduce systems for determining the minimum wage.” In Bulgaria, for example, there is a draft law on the table that explicitly includes the 50 percent mark. Slovakia is also aiming for a minimum wage of 60 percent of the average wage. Cyprus even introduced a statutory minimum wage for the first time in 2022.
The EU agency Eurofound also came to a positive conclusion in the middle of the year: The directive had triggered “significant increases“, as more and more countries were striving to align their national minimum wage with certain target percentages of actual wages. However, there are still major differences between countries.
The fact that an EU Commissioner is flexing his muscles in public in a dialog with Elon Musk on X is something that will probably not happen again in the new legislature. Not only because it cost Thierry Breton his job. His successor, Henna Virkkunen, has adopted a different tone. However, she has already made it clear that she will not let up when it comes to enforcing European digital legislation.
However, it is questionable whether she can keep this up. There is a risk that digital regulation will become a maneuvering tool in the restructuring of economic relations between the incoming Trump administration and the EU Commission.
With the Digital Services Act (DSA) in particular, the Commission finds it difficult to explain that the law is not about interfering with content. Instead, it is about combating systemic risks in order to maintain the integrity of the information space. “It is dangerous when the owner of platform X retweets people who say that the EU is ‘undemocratic’ and it seems that more attacks on the DSA are coming from the US,” wrote MEP Andreas Schwab (CDU) on Bluesky.
Elon Musk and Mark Zuckerberg aren’t the only ones talking about censorship when it comes to DSA. These accusations also exist in Europe. However, behind the scenes, X and Meta continue to cooperate with the Commission. During the election campaign in Romania, for example, X took part in a virtual round table on the Code of Practice on Disinformation – even though the platform under Musk withdrew from the voluntary commitment that had been in place since 2018. The Commission found this remarkable. Of course, the European side is willing to continue cooperating transatlantically in as many areas as possible. So far, there has been no indication from Meta, for example, that this could change.
However, the Commission is currently deliberately holding back in some areas. For example, it does not want to escalate the proceedings against X any further at present. As a regulator, you have to be wise, according to the authority. However, this does not mean that the proceedings have been stopped. The investigations are still ongoing. X has provided a large amount of data, which the authority is analyzing. The Commission will now take its time. After all, it also has other construction sites, TikTok for example.
Would the Commission go so far as to trade a more lax approach to implementing the DSA for low tariffs, for example? “I don’t think it will have that relevance,” is the assessment of a Commission official in an interview with Table.Briefings.
In principle, the Commission is self-confident: “Nobody wants a trade war, but we can certainly parry.” However, the negotiations are likely to remain limited to trade flows. The Commission does not currently believe that the DSA could be included in the talks. However, it cannot be ruled out either, “because there is a certain erratic streak around Mr. Trump.” Nevertheless, Donald Trump says a lot. But “we first have to see what really happens”.
MEP Alexandra Geese (Greens), who was recently in the US for talks, warns: “I believe that this time the Trump administration will be able to act from day one, and it is not well-disposed towards Europe.” But what exactly that means for Europe is difficult to predict. “I hear that Elon Musk is actually not interested in tariffs because he naturally exports a lot to Europe,” says Geese. There may be a difference of opinion here between the otherwise harmonious team.
At the same time, things could get uncomfortable between Trump and Silicon Valley. Not all US tech entrepreneurs are of the same opinion as Musk or tech billionaire Marc Andreessen, says Geese. Vice President-elect J.D. Vance is an avowed opponent of the big tech companies, which he considers either too liberal or too powerful. He has called Google “the most dangerous company in the world,” and Vance would like to break it up.
Parliamentarian Tiemo Wölken (SPD) assumes that Elon Musk wants to see something in return for his massive investment in the Trump campaign. This could mean less regulation in the USA, but also in the EU. But Europe must not allow itself to be blackmailed. “Horse-trading – less tech regulation, but fewer tariffs on cars – must not happen at this point. If we leave the rules-based world order, we will only have disadvantages.”
The Commission is confident that things will run a little more smoothly in the second term of office. For example, in the area of cybersecurity, which was also discussed in the Trade and Technology Council (TTC), the trade and technology council between the EU and the USA. It is quite conceivable that the Trump administration would be interested in continuing to work with the EU on these issues.
EU Trade Commissioner Maroš Šefčovič announced – before he knew the outcome of the US election – that he wanted to continue the TTC. However, it is unlikely that Trump will stick to the construct chosen under the Biden administration. However, this does not mean the end of cooperation. After all, the EU also maintains digital partnerships with other countries such as Japan, Singapore, and Korea.
In any case, the Commission considers itself better equipped today for a Trump administration than during his first term in office. The key Directorates-General are in close contact, says a member of the authority. “Eight years ago, we were completely unprepared, and this time the preparation is different. This is the case at national level, at EU level, and with the member states, who recently discussed this at the informal Council in Budapest.”
Yesterday, Minister Robert Habeck was in Brussels to meet some of the new Commissioners. In an interview with journalists, he also explained why he had supported the relatively strict German position at the time of the negotiations on the EU debt rules. At the end of November, Habeck suddenly judged these rules to be a “security risk,” which was met with particular anger in the Federal Ministry of Finance.
“Yes, because the pressure to reach an agreement was then there,” said Habeck, explaining his support for the German negotiating position at the time. Since the fall of the coalition government, these constraints on agreement are clearly no longer there. Habeck spoke openly of the “contradiction” between the debt rules and the goal of higher defense spending.
Habeck sees a further problem with the EU debt rules in terms of their effect on competitiveness. He cited the Draghi report, according to which additional investments in the three-digit billion range are necessary every year. “And on the other hand, there is the Fiscal Structural Plan, which basically does not provide for this and makes it impossible,” he said.
The economy minister speculated that the EU debt rules might have turned out differently if these findings had been known beforehand. The catch with this argument is that the majority of Draghi’s findings – especially those relating to investment needs – were already known long before his report was published.
Have a nice day, hopefully without any security risks.
The Minimum Wage Directive was the most important social policy project in Ursula von der Leyen’s first mandate. In her second term of office, the head of the Commission must now ensure that the directive is implemented by the member states – as the deadline for this expired on Nov. 15. And the debates on this are already underway.
The Commission does not yet know which countries have already fully implemented the directive by the deadline. The review is starting now, it says. If it is found that the directive has not been implemented or not fully implemented, infringement proceedings could be initiated. Labor Commissioner Roxana Mînzatu made it clear in the hearing before the European Parliament that monitoring the implementation of the Minimum Wage Directive is a priority for her.
The aim of the directive is for countries with statutory minimum wages to set criteria in order to achieve an “appropriate” minimum wage level that also protects against in-work poverty. It is also intended to help increase collective bargaining coverage. To this end, the directive sets out three requirements:
But how binding are these requirements? That is controversial. Thorsten Schulten, Head of the Collective Bargaining Archive at the Hans Böckler Foundation’s Institute of Economic and Social Research (WSI), which is close to the workforce, believes that the directive is a kind of “soft hard law.” “The law is more than a recommendation, but is less binding than other directives due to its scope of application on wages and collective bargaining autonomy.” Wages and social partnership are the responsibility of the member states, but in his opinion, the four criteria for determining wage levels should be explicitly laid down.
It is also clear to many trade unionists that the directive is only fulfilled when these three requirements are fully applied. Minimum wages are only appropriate “if they correspond to at least 60 percent of the average overall economic wage of full-time employees (median wage),” according to the German Trade Union Confederation. In Germany, for example, this would entail an increase in the minimum wage to €15.27 for 2025, the DGB calculates. By way of comparison, the Minimum Wage Commission decided to increase the minimum wage by 41 cents to €12.82 for the coming year, citing the development of collectively agreed wages.
Employers, on the other hand, point out that these are only recommendations because the Union has no powers to force the states to do so.
The European Trade Union Confederation (ETUC) concludes that the member states are not implementing the minimum wage directive. In an evaluation at the end of October, the ETUC came to the conclusion that only six countries had so far launched a legislative initiative, namely: Belgium, Hungary, Latvia, Luxembourg, Poland, and Romania. However, ETUC also includes Austria among the countries in which the debate is still ongoing – although the country does not have a statutory minimum wage and the collective bargaining rate is over 80 percent.
Christina Hießl, who teaches European labor law at the KU Leuven, states: “We see that many states do not see themselves covered by the directive at all and do not make any changes to their laws.” Following an amendment by the Council, the directive now only has a very narrow definition of what constitutes a statutory minimum wage: When its level is determined directly by the legislator. According to this view, a minimum wage that is negotiated by social partners, as is the case in Germany, and then declared binding by the responsible ministry, for example, is not covered.
In Germany, the reaction to the directive has been contradictory. Labor Minister Hubertus Heil (SPD) emphasized in a letter to the Minimum Wage Commission that he would see the directive implemented if the Minimum Wage Commission took the reference value of 60 percent into account in its upcoming decision. Only a short time later, on Oct. 23, the BMAS declared in the Federal Law Gazette: “The Directive […] on adequate minimum wages in the European Union is implemented by the Minimum Wage Act.” In other words, the ministry sees no need for legal action. There is no need to present an action plan to increase collective bargaining coverage at this time, it says.
The Commission is likely to wait and see what the European Court of Justice decides. The ECJ is currently examining whether the EU has sufficient powers for the directive. Denmark has filed an action for annulment and the Advocate General’s opinion is expected on Jan. 14. “Only then will the Commission start its assessment,” says Hießl. Like the labor lawyer, many experts assume that the directive will pass largely unscathed.
Despite the dispute over implementation, collective bargaining expert Schulten has observed positive developments: “We are seeing that countries in Central and Eastern Europe in particular have begun to introduce systems for determining the minimum wage.” In Bulgaria, for example, there is a draft law on the table that explicitly includes the 50 percent mark. Slovakia is also aiming for a minimum wage of 60 percent of the average wage. Cyprus even introduced a statutory minimum wage for the first time in 2022.
The EU agency Eurofound also came to a positive conclusion in the middle of the year: The directive had triggered “significant increases“, as more and more countries were striving to align their national minimum wage with certain target percentages of actual wages. However, there are still major differences between countries.
The fact that an EU Commissioner is flexing his muscles in public in a dialog with Elon Musk on X is something that will probably not happen again in the new legislature. Not only because it cost Thierry Breton his job. His successor, Henna Virkkunen, has adopted a different tone. However, she has already made it clear that she will not let up when it comes to enforcing European digital legislation.
However, it is questionable whether she can keep this up. There is a risk that digital regulation will become a maneuvering tool in the restructuring of economic relations between the incoming Trump administration and the EU Commission.
With the Digital Services Act (DSA) in particular, the Commission finds it difficult to explain that the law is not about interfering with content. Instead, it is about combating systemic risks in order to maintain the integrity of the information space. “It is dangerous when the owner of platform X retweets people who say that the EU is ‘undemocratic’ and it seems that more attacks on the DSA are coming from the US,” wrote MEP Andreas Schwab (CDU) on Bluesky.
Elon Musk and Mark Zuckerberg aren’t the only ones talking about censorship when it comes to DSA. These accusations also exist in Europe. However, behind the scenes, X and Meta continue to cooperate with the Commission. During the election campaign in Romania, for example, X took part in a virtual round table on the Code of Practice on Disinformation – even though the platform under Musk withdrew from the voluntary commitment that had been in place since 2018. The Commission found this remarkable. Of course, the European side is willing to continue cooperating transatlantically in as many areas as possible. So far, there has been no indication from Meta, for example, that this could change.
However, the Commission is currently deliberately holding back in some areas. For example, it does not want to escalate the proceedings against X any further at present. As a regulator, you have to be wise, according to the authority. However, this does not mean that the proceedings have been stopped. The investigations are still ongoing. X has provided a large amount of data, which the authority is analyzing. The Commission will now take its time. After all, it also has other construction sites, TikTok for example.
Would the Commission go so far as to trade a more lax approach to implementing the DSA for low tariffs, for example? “I don’t think it will have that relevance,” is the assessment of a Commission official in an interview with Table.Briefings.
In principle, the Commission is self-confident: “Nobody wants a trade war, but we can certainly parry.” However, the negotiations are likely to remain limited to trade flows. The Commission does not currently believe that the DSA could be included in the talks. However, it cannot be ruled out either, “because there is a certain erratic streak around Mr. Trump.” Nevertheless, Donald Trump says a lot. But “we first have to see what really happens”.
MEP Alexandra Geese (Greens), who was recently in the US for talks, warns: “I believe that this time the Trump administration will be able to act from day one, and it is not well-disposed towards Europe.” But what exactly that means for Europe is difficult to predict. “I hear that Elon Musk is actually not interested in tariffs because he naturally exports a lot to Europe,” says Geese. There may be a difference of opinion here between the otherwise harmonious team.
At the same time, things could get uncomfortable between Trump and Silicon Valley. Not all US tech entrepreneurs are of the same opinion as Musk or tech billionaire Marc Andreessen, says Geese. Vice President-elect J.D. Vance is an avowed opponent of the big tech companies, which he considers either too liberal or too powerful. He has called Google “the most dangerous company in the world,” and Vance would like to break it up.
Parliamentarian Tiemo Wölken (SPD) assumes that Elon Musk wants to see something in return for his massive investment in the Trump campaign. This could mean less regulation in the USA, but also in the EU. But Europe must not allow itself to be blackmailed. “Horse-trading – less tech regulation, but fewer tariffs on cars – must not happen at this point. If we leave the rules-based world order, we will only have disadvantages.”
The Commission is confident that things will run a little more smoothly in the second term of office. For example, in the area of cybersecurity, which was also discussed in the Trade and Technology Council (TTC), the trade and technology council between the EU and the USA. It is quite conceivable that the Trump administration would be interested in continuing to work with the EU on these issues.
EU Trade Commissioner Maroš Šefčovič announced – before he knew the outcome of the US election – that he wanted to continue the TTC. However, it is unlikely that Trump will stick to the construct chosen under the Biden administration. However, this does not mean the end of cooperation. After all, the EU also maintains digital partnerships with other countries such as Japan, Singapore, and Korea.
In any case, the Commission considers itself better equipped today for a Trump administration than during his first term in office. The key Directorates-General are in close contact, says a member of the authority. “Eight years ago, we were completely unprepared, and this time the preparation is different. This is the case at national level, at EU level, and with the member states, who recently discussed this at the informal Council in Budapest.”
