THE STATE OF THE EUROPEAN UNION REPORT. Europe in a period of transition

THE STATE OF THE EUROPEAN UNION 78 guments to ensure adequate incomes in the low-wage sector.These include provisions across the Union for each Member State to define clear criteria at a national level for the scope and adjustment of statutory minimum wa- ges, as well as for the involvement of the social partners. Countries that do not have a statutory minimum wage, such as the Scandinavian countries, Austria and Italy, where minimum wage rates are stipulated in collective agreements, are not affected by this. However, the other measures aimed at regulated monitoring of minimum wage development and implementation, as well as those promoting collective bargaining apply to all EU Member States. The latter criterion specifies a lower limit of at least 70 percent collective bargaining coverage rate of workers, whereas the Commission rejects a quantitative minimum wage standard of 60 percent of the national median wage, as demanded by the European Trade Union Confederation (Schulten et al ., 2015, pp. 345–348). The reasons for this are that, firstly, many Member States have reservations about the EU interfering in the collec- tive agreement sovereignty of national social partners and wage-setting mechanisms; secondly, it is certainly a key factor in this regard that only four Member States – France, Portugal, Slovenia and Romania – would exceed a minimum target of 60 percent of the median wage at all (2018 data). An agreement is to be reached in the Council by the end of 2021. At the EU Social Summit in Porto on 7 May 2021, the European institutions and Member States pledged their commitment to the action plan for the European Pillar of Social Rights proposed by the Commission. The Commission is expected to underpin the Pillar’s social rights, thus far vague as they are not legally binding, with quantitative target values to be achieved by 2030. Three headline EU targets were agreed: (1) an employment rate of at least 78 percent among 20- to 64-year-olds; (2) the annual participation of at least 60 percent of all adults in training courses; (3) a reduction of at least 15 million in the number of people at risk of social exclusion or po- verty. Very much in line with previous ten-year strategies (Lisbon, Europe 2020), Member States are urged to set their own national targets in the areas of employment, further training and poverty reduction, which are moni- tored within the framework of the European Semester.To improve policy coordination, the European Pillar of Social Rights is accompanied by a Social Scoreboard, which has now been expanded to include additional indicators (Eu- ropean Commission, 2021c). The Porto Declaration recognises the Pillar and its targets as a central component both in the recovery from the pandemic and in the imminent green and digital tran- sitions (European Council, 2021). The Commission the- refore very much draws upon it in its social projects, for example in the creation of a European Platform on Com- bating Homelessness and a recommendation to Member States to tackle child poverty, which was adopted by the Council in June 2021 and requires Member States most affected to allocate at least 5 percent of their European Social Fund Plus (ESF+) resources to address these issues. At least a quarter of its overall budget of €99.3 billion for the next seven years is to be used in measures to advance equal opportunities for disadvantaged groups and 12.5 percent to combat youth unemployment – both areas of importance to the European Parliament (2021). Conclusion An examination of socioeconomic indicators over time clearly shows how strongly the economic and so- cial consequences of misguided crisis management con- tribute to persisting inequality and deepening divisions within the EU. Austerity policies have set some Member States back excessively and damaged others through economic stagnation across the continent. A decade has been lost not only in terms of economic growth, but also with regard to social cohesion. The lessons learned from this decade of crisis seem to be gaining ground as a result of the pandemic: policies to tackle the coro- navirus crisis, with the €750 billion NextGenerationEU recovery fund as the core instrument, can be viewed as a unique opportunity to exit the economic downturn,