Eurozone finance ministers are set to approve a series of proposals regarding economic policies to be followed by members of the single currency during the 2024-2025 period, including the reduction of public debt, an increase in “green” and digital investments, and wage increases, along with reforms in the labor market.
According to the document under consideration at the Ecofin agenda, member-states are urged to support wages to mitigate the losses in purchasing power, especially for low-income citizens. However, the Commission emphasized that wage increases should not lead to inflation pressures, or negatively impact competitiveness.
The Commission also advocates increased development of workforce skills, improvements in working conditions and measures to facilitate the management of legal migration of workers from third countries.
While nominal wages in the Eurozone experienced a 4.8% surge in 2022, concerns arise as this increase did not align with real wages, showing a 3.7% decline due to inflation.
Projections anticipate a growth in nominal wages in 2024, with a moderate rise in real wages expected to stimulate domestic demand. However, the Commission warns about the need for balance, emphasizing that substantial wage hikes, without parallel productivity gains, could adversely impact competitiveness across Europe.