The Brief: Same pay for the same work in the same place?

The Brief is EURACTIV's evening newsletter.

The truth is that Jean-Claude Juncker is siding with the wealthy EU countries that fear competition from workers from Eastern Europe, who accept more modest pay.

He has often been heard saying that workers should receive equal pay for equal work in the same place. Once he made a mistake and said “the same pay for the same work everywhere in the EU”, but his services corrected him.

Let’s see if the proposed mantra can work both sides. In Bulgaria, the country I know best, there are three electricity utilities that divide the country, all owned by foreign companies.

Czech firm CEZ has the western part, Austria’s EVN has the southern part, and Energo-Pro, another Czech company, controls the north-east. Each one has a full monopoly and many suspect the three of running a cartel.

According to credible press reports, the CEO of CEZ Bulgaria earns over €100,000 per month. The salaries of the CEOs of EVN and Energo-Pro are also reportedly very high.

But the CEOs of Bulgarian-owned companies do not earn such sums. I just spoke to the head of a business association in Bulgaria, who mentioned a figure of well under €5,000 as a normal monthly salary for the CEO of a multi-million euro company.

If Juncker’s rule were to apply, the Czech boss of CEZ Bulgaria should agree to work for twenty times less. And all Western experts working in companies in Bulgaria should be paid several times less, if their salaries were to be equal to their Bulgarian colleagues doing the same job. (A highly qualified accountant earns €1,000 per month or even less.) This would cause an exodus of Western professionals from Bulgaria, and possibly other Eastern European countries too.

You don’t need to go as far as Bulgaria to see the inconsistency of Juncker’s mantra. Even in the Berlaymont building, where the Commission’ president works, there are huge differences in the pay of workers who are doing the same job.

For example, MEPs have highlighted that contract agents earn a fraction of the salary of administrators, even though the former may be doing exactly the same job.

And any private company in any EU city negotiates salaries in full confidentiality. Enforcing equal pay for equal work would not only create chaos, it would hurt companies’ competitiveness and could even trigger bankruptcies.

Commissioners Dombrovskis and Moscovici, Juncker’s right-hand men on eurozone issues, yesterday proposed “real convergence”, meaning living standards, to complement the “nominal convergence” of the Maastricht criteria for joining the euro.

If this comes to pass, Bulgaria’s eurozone ambitions would be set back 50 years… But why alienate a pro-European country, which may be poor but never causes trouble, at a time when the eurozone is in crisis?

Same pay for the same work in the same place? Mr. Juncker must be kidding.

The Roundup

Post-Brexit GDP losses in the UK’s services sector could outweigh Britain’s EU budget contributions by three to one, according to a new study. Britain’s resilience has so far surprised economists but falling investment is storing up trouble for the future. Britain has already slipped to the bottom of the G7 for economic growth.

Billionaire George Soros claimed the UK could rejoin the EU before Brexit is completed.

China-EU’s President Luigi Gambardella told that EU investors should learn to get along without preferential treatment in China.

Donald Trump’s reported decision to leave the Paris Agreement could fall victim to one major factor: maths. By some calculations America’s withdrawal would only take effect in November 2020, just as the US is electing its next president. Donald Tusk implored his namesake not to leave the agreement.

Jean-Claude Juncker raised a number of issues during a visit to Berlin yesterday, including US attempts to broker trade deals bilaterally and confirmation that Turkey’s EU bid would be terminated if it brings back the death penalty.

The man favourite to be the Czech Republic’s next prime minister doesn’t want his country to join the euro.

The Commission and Italy have agreed on a rescue deal for the world’s oldest bank, Monte dei Paschi di Siena

Serbia’s president wants to open a dialogue over Kosovo but there is political uncertainty in his own country as a new prime minister is yet to be named.

The EU’s top court could put the final nail in the coffin of Uber’s European dreams. The ride-sharing app will likely be labelled a “traditional transport service” and regulated like any other taxi company.

Microsoft co-founder Paul Allen today unveiled the world’s biggest ever aeroplane. Designed as an aerial launch pad for rockets, the 117-metre-wide Stratolaunch will slash the cost of sending supplies into space.

Sam Morgan and Samuel White contributed to this Brief.

Look out for…

Donald Trump’s decision on the Paris Agreement, due at 21:00 this evening. The EU-China summit closes tomorrow, with leaders expected to promise closer cooperation and higher climate ambition.

Views are the author’s

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