It is the EU’s duty to adopt a wage union

Article of Csaba Mohi, international law expert in Hungarian daily newspaper Magyar Nemzet on September 15, 2017

Exercising a right laid out in the Treaty of Lisbon, Jobbik has launched a European Citizens’ Initiative for a Wage Union to invite the European Commission to eliminate the huge wage inequalities within the EU. Of all Hungarian political parties, Jobbik was the only one to exercise this guaranteed right. After evaluating Jobbik’s motion, the Commission judged it to be legitimate and registered it, considering the fact that the party had fulfilled the relevant EU requirements. Persistent lobbying activities helped the party to win all affected member states for the cause. The EU Treaties require collecting at least one million statements of support from several member states so that the new mandatory EU legislation could be developed to eliminate the existing anomalies. The collection process has already started. Notably enough, the Orbán government rejects Jobbik’s proposal. Politicians in charge of economic and financial affairs have unanimously declared the concept to be “nonsense”. Below we provide an overview how the commission responsible for the execution of EU law violates certain provisions by ignoring them (even though they bind the commission) and failing to do anything for the elimination of the shocking wage inequalities between the EU’s western and eastern regions.

The wage inequalities between the Union’s rich and poor member states (i.e., the lack of a wage union) violate fundamental rights guaranteed by the European Union and block the successful functioning of its economic-political institutions. The very first provisions of the EU Treaty include: “The Union shall have exclusive competence and be responsible for establishing such competition rules necessary for the functioning of the internal market that guarantee fair competition and prevent its distortion. The Union shall establish an internal market without internal frontiers in which the free movement of goods, services, persons, labour and capital is ensured.” The requirement of a “free competition without any distortion” first appears in the protocol (laying out equally binding provisions) attached to the Treaty of Lisbon, in order to guarantee the efficient functioning of the internal market.  The protocol points out that the single internal market must be based on a practice that prevents any distortion of competition. Undoubtedly enough, the enormous wage inequalities currently existing between the member states exert a huge distortion effect. In the protocol, the member states unanimously assumed responsibility to make EU bodies (especially the Commission) adopt new mandatory regulations and measures to allow for the elimination of any factors blocking or distorting free competition, if need be. Jobbik’s proposal for a wage union wishes to exercise this fundamental right, and remedy this omission.

Among the EU’s declared objectives and fundamental functions, the Treaty of Lisbon also lists “combating social exclusion and discrimination” and promoting “social market economy” as key elements of the European economic model. These requirements were pinpointed by various organizations of EU citizens, claiming that “the Union is not social enough; it does not provide sufficient protection for workers; it promotes deregulation too much, thus serving monopolistic interests”. Listed among the “generally applicable provisions”, the guarantees related to the functioning of the internal market, the prevention of distorted competition as well as the social and labour law provisions were rendered into the competency of the Court of Justice of the European Union. So any lawsuit on this subject must be filed to this body, too.

Consequently, if Jobbik’s proposal for a wage union fails because the Commission rejects it, then the party can file a so-called “omission suit” before the Court of Justice of the European Union. The Treaty of Lisbon provides that “if the European Parliament, the European Council or the European Commission omits mandatory decision making, thus violating the EU Treaties, member states, natural or legal persons may file a suit to the Court of Justice of the European Union to establish whether there was a violation of law”. As for the execution, the Treaty provides: “The institution whose omission is declared contrary to the Treaties by the Court of Justice of the European Union shall take the necessary measures to comply with the court decision.”

Even during the legislative work aiming to provide for the free movement of workers and capital, representative organizations, member states and economic politicians have all pointed out that if such free movement across the EU were allowed without eliminating the intolerable differences between the economic-social conditions and wage levels of certain member states, then workers would migrate to member states offering higher wages while capital would flow to EU countries with lower social and payroll costs. It is clear that the omissions caused by this short-sightedness have led to the largest crisis of the internal economic development of an integrated Europe so far. The wage union initiative aims to solve this crisis and it is supported by several Eastern European countries.

The Charter of Fundamental Rights of the European Union and the European Social Charter guarantee that workers cannot be discriminated against in terms of their wages, equal opportunities and social rights. The Treaty of Lisbon states that both Charters have equivalent legal binding force to that of the Treaties. Consequently, if rights are violated in areas belonging to the competency of the Union, natural and legal persons may file lawsuits at the Court of Justice of the European Union. The essence of this philosophy is that the EU must constantly converge the national labour regulations affecting the price of labour  (EU harmonization), otherwise the capital moving freely within the single EU market will abuse the wage inequalities and unfairly profit from the lower guarantees provided for the workers of particular member states.

Without such EU harmonization, competitive neutrality cannot be ensured and the current grave social problems caused by “social and wage dumping” cannot be eliminated, either. As laid out in the two Charters, the key guarantees for workers are as follows: ensure the equality of workers; prohibit any discrimination among them; and ensure their rights for economic and social equality as well as for honest, just and fair conditions of work and wages. In addition to the above guarantees, the Treaty of Lisbon also clarifies the regulation further in the special chapter titled Workers. It says: “Workers’ freedom of movement within the union shall entail the abolition of any discrimination based on nationality between workers of the Member States as regards remuneration (wages) and other conditions of work and employment.”

Finally, we must raise the question whether you can build an integrated Europe as long as there are such significant economic, economy-related, social, cultural and other differences among the particular member states and regions. It is a generally accepted premise that “our consciousness is determined by our existence”. An individual thrown into misery may not be expected to evaluate life’s most fundamental issues the same way as a wealthy person does. The various social groups living in different conditions cannot form a single identity. The per capita GDP of the countries joining the EU during its “eastern enlargement” (including Hungary) is significantly below the EU average. According to Eurostat’s classification, the member states failing to reach 75 per cent of said average are referred to as the “poor countries”. Four Hungarian regions are ranked among the EU’s “especially poor and underdeveloped” 20 regions.

When you look at the so-called “liveability” index, which was introduced in addition to the GDP figure to indicate the quality of healthcare and education, social security and cultural opportunities, the picture is even more grim. The EU’s richest region with the highest liveability index is „Inner-City London Westminster”, while the two most miserable areas are Romania’s Dobruja and Bulgaria’s Rodope. As far as their liveability index is concerned, London’s is 600 times higher than those of the two above. Consequently, there is no such thing in today’s EU as an “all-European identity” or an “economic and social cohesion”. All the above still prevent the creation of a European unity, even though the EU Treaty itself already recognized this threat: “In order to promote its progress, the EU must conduct a policy to reinforce economic and social cohesion.”

The EU’s legislative bodies seem to have recognized the obstacles of progress (including the wage inequalities), and the Treaty of Lisbon laid out sophisticated and comprehensive guarantees to eliminate them. Unfortunately however, Brussels’ enormous bureaucratic machine operates with a very low efficiency, while rich member states, selfishly enough, subjugate the identified requirements and objectives to their own national interests. Our responsible Hungarian politicians must realize that the EU in itself is not a miracle drug or a cornucopia but a cruel battleground of highly diverse and often opposing interests. The EU membership of a country simply means that the particular states were admitted to this “battleground”, in other words, were given a seat at the table where joint decisions are made.

Equality can only be reached if you fight for it yourself. As a minimum for accomplishing your goals, you need two things: an in-depth knowledge of all available options and the ability to fight hard. Both domestically and at EU level, Hungary needs such politicians who are able to fight for and exercise the rights they already have on paper. Those who are unable to do so will be put to the end of the line. To use an analogy from the Bible: when the trumpeters were sent to the walls of Jericho, they were not instructed to “blow your trumpets as you like”. The command went like this: “Blow your trumpets until the walls of Jericho collapse!” This is the approach we must adopt in our work.