Mr. Nicolas Schmit:

The issue of fair play is an important one. That is the reason we made the proposal on minimum wages. Comparing minimum wages in the European Union, Ireland has the second highest minimum wage. There is one country that has a higher minimum wage, which is the country I know quite well. This is one aspect on minimum wages. The Senator touched on another issue. The directive is a directive not a recommendation. It also addresses the issue of collective bargaining. The Commission as a whole and, in particular, the President of the Commission, are very much attached to the idea of a social market economy. It is not just a market economy; it is a social market economy. This means that collective bargaining and a fair relationship between employers and employees, are important in the context of this social market economy. The idea of promoting collective social dialogue but also collective agreements is one of the objectives of the directive.

The point is the Commission does not have large powers on this issue. The treaty does not give us such powers. There are good reasons for that. I do not want to put this into question, rather I am reflecting the treaty position on this point. For instance, we cannot impose a collective bargaining system or the role of trade unions or employers organisations in the different member states. It is possible for us to make proposals which interfere in industrial relations but this can only be done by unanimity. As the Senator will know, unanimity is not easy to achieve. Sometimes, we achieve it, but it is not easy. In this directive we also wanted to address the issue of collective agreements and collective bargaining. We have many different cultures. The Nordic countries want only collective bargaining and nothing to do with a statutory minimum wage. I had some difficulties with them on the statutory minimum wage issue because the Nordic system is built on collective agreements. In other countries, collective agreements are very low, especially in central Europe, where we at under 20% or sometimes even less.

However, we consider that for the social market economy, we need better systems of industrial relations and also a stronger collective bargaining system. How can we achieve that? Certainly, we leave it to social partners and member states to organise that. We have now asked member states to have a plan negotiated with their social partners on improving social dialogue and the collective bargain system. We cannot prescribe member states to do this, but we invite them through this plan. The plan is an obligation, it is not just on a voluntary basis that every member state should have this kind of plan. For the Austrians it is easy because they are at 95% of coverage by collective agreements - one cannot be better. On those where collective bargaining is low, there may be some reasons for that also, such as the structure of the economy and so on. However, they should work out a plan to gather with their social partners on how they can improve the system of collective bargaining. That is maximum we can do in terms of our legal competence for the treaty. We will certainly, once this directive is adopted and I hope it will be adopted with this element, follow up on this. We will ask member states to work on this plan together with their social partners and obviously in the objective context they have. Some have very strong unions and others not. We have a difficult situation in some central European countries but we are inviting member states to work on this according to their traditions and legal systems.