By Krassen Nikolov
To fight for the enforcement of equal minimum wages and pensions for all countries in the EU is one of the big promises that the Bulgarian Socialist Party (BSP) made to the voters for the forthcoming European elections. The commitment was made by the leader of the BSP election list Elena Yoncheva on 11 May to the citizens of Varna – the third largest Bulgarian city.
BSP will fight for a Europe-wide minimum wage and pension, economic development, and will fight against youth unemployment, and the demographic catastrophe that hits Bulgaria, Yoncheva said, quoted by the BSP press center.
Check by this website shows that Yoncheva’s promise about a EU-wide minimum wage and pension cannot be kept: it is misleading the voters and is not part of the EU debate.
Earlier in May, European Commission First Vice-president and lead candidate of the Party of European Socialists (PES) for President of the European Commission Frans Timmermans called the EU countries to introduce a European minimum wage standard. He made it clear that this is not a common European minimum wage that would artificially equalize the standard of living in the member states. The European debate is about introducing a common standard for the minimum wage, which is 60% of the average wage in the country. This idea of the group of Socialists and Democrats in the European Parliament has been discussed in the EU for several years.
Timmermans is in fact putting pressure on the six EU members without an official minimum, namely Austria, Cyprus, Denmark, Finland, Italy and Sweden. Opponents of the minimum wage see the policy as dragging down competitiveness, sovereignty as well as leveling down salaries – some sort of race to the bottom.
For example, the gross average salary in Bulgaria is €616. If the EU minimum wage standard is adopted, the minimum wage in Bulgaria should be €370. Even if this happens, the minimum wage in Bulgaria will still be the lowest in the EU. At present, the minimum wage in the EU countries that have similar living standard to Bulgaria (Latvia and Romania) is approximately €440.
At present, the minimum wage in Bulgaria is €286 or 45% of the average salary. Since the beginning of last year, the largest trade unions in Bulgaria have insisted on raising the minimum wage to €460 from 2020, but the government does not support these ideas.
The BSP promise creates false expectations for voters. The introduction of a minimum wage across the EU cannot level the standard of living in Bulgaria and the countries with a more developed economy.
The highest minimum wages are in Luxembourg – just over €2000. In the richest EU countries, the minimum wage varies from €1100 to €1680. Citizens of these countries would not support the introduction of an equal minimum wage standard, if such idea was aver to be discussed at EU level. That would bring them closer to the poorer countries where the normal salary is two times lower than their minimum wage.
The same economic logic applies to pensions. From the summer of 2019 the average pension in Bulgaria will be €200. A double increase of the average pension to €400 would cost Bulgaria about 18% of its GDP, which would undoubtedly lead the state to bankruptcy.