EU Commissioner Charlie McCreevy attacks minimum wages

Special report from David Cronin, a Brussels based Irish journalist, on McCreevy's attack on minimum wage policies. This article originally appeared on the Guardian website.

Sometimes I wonder if politicians opposed to setting minimum wages view huge swaths of humanity with contempt. Few things can be more unsavoury than a well-paid elite plotting to deprive the average worker of basic protection.

Take Charlie McCreevy, the man in charge of the EU's single market. As a European commissioner, he commands an annual salary of roughly €250,000 (plus a variety of perks). Yet he thinks that a mandatory wage of less than €10 per hour is excessive.

In March, McCreevy wrote to the German government, arguing that the "introduction of unsuitably high minimum wages" in the country's postal service could "hinder competition".

Since that letter was sent, his officials have announced they are investigating a formal complaint by the Dutch mail firm TNT, which is eager to gain a foothold in the German market. More than likely, this probe will be a charade. Judging by his letter, McCreevy is already on the side of TNT, rather than the trade unions who negotiated a €9.80 minimum hourly rate. Because that is €2.30 above what TNT is willing to fork out, there must be a hidden agenda of shielding Deutsche Post from foreign rivals, the argument goes.

This onslaught on pay deals is not isolated.

In December, the European court of justice ruled in favour (pdf) of Laval, a Latvian construction firm, which won a contract to build a school in Vaxholm, Sweden. Its attempt to pay Latvian wages - between one-tenth and one-fifth of those applying in Sweden - on that project sparked a bitter dispute in Scandinavia. But the Luxembourg court found that efforts by Swedish unions to make a company from another EU state negotiate on pay curbed the freedom to provide services.

John Monks, the general-secretary of the European Trade Union Confederation, has warned (pdf) that the Laval verdict could turn workers against the EU's Lisbon treaty. That may well eventually happen. Unfortunately, though, it will not be as a result of parties traditionally sympathetic to the trade union movement campaigning for the treaty's rejection.

The socialist grouping in the European parliament, which includes Britain's Labour MEPs, recently published a brochure (pdf) lamenting how the gulf between the rich and the poor is widening. One factor behind this polarisation, the socialists suggest, is how the right has gained control of many EU governments. Yet the same paper offers support for the Lisbon treaty, even though it was cobbled together by the very governments it excoriates.

The socialists' claim that the treaty will strengthen Europe's social dimension is devoid of substance. Thanks to the position taken by Tony Blair - supposedly a centre-left leader - the charter of fundamental rights, including the right to strike, will not apply to all the EU's member states once the treaty comes into effect. But provisions stating that competition must not be "distorted" will be mandatory.

No doubt, the subordination of economic and social rights to free market principles will gladden McCreevy, as this will strengthen his hand each time he tries to undermine minimum wages and other social measures considered anathema to competition. It may even encourage him to campaign more energetically than he otherwise would have for a Yes vote in his native Ireland, the only EU country that is putting the treaty to a referendum.

McCreevy, one of his country's most right-wing politicians, has a dishonourable history of promoting policies that would increase hardship. As a minister for social welfare in the 1990s, he achieved notoriety for his "dirty dozen" cutbacks on unemployment assistance.

Despite his reputation for plain-speaking, I suspect that he won't be bragging about his latest attempt to dismantle what bureaucrats call Social Europe when he visits Ireland ahead of the referendum. It is tragic that - for the most part - the left is willing to collude with this demolition.