The EU Minimum Wage Directive and the Battle for Social Europe
Social Europe—the idea that economic integration must go hand-in-hand with social protections— has been central to the European project since its inception. From the founding treaties of the European Coal and Steel Community (1951) and the European Economic Community (1957), European integration was never simply about market integration. It was about rebuilding a continent ravaged by war by embedding economic cooperation within a political framework that could ensure rising living standards.
Though the Social Europe agenda has waxed and waned over the decades, it has remained a vital source of legitimacy for the EU. Following a period of austerity and market liberalisation that undermined worker protections, the adoption of the European Pillar of Social Rights (EPSR) in 2017 marked a significant turning point. Arguably the most ambitious legislative initiative to emerge from this renewed agenda is the Adequate Minimum Wages Directive (AMWD).
Adopted in 2022, the AMWD sets out a framework to ensure minimum wages are adequate and promotes collective bargaining across the EU. It does not mandate a specific wage level but establishes clear procedural standards for wage-setting, and introduces obligations to promote collective bargaining, in particular in countries where collective bargaining coverage is below 80%. It aims to reduce in-work poverty, foster upward convergence in living standards, and reinforce the legitimacy of the EU project.
This directive represents a milestone in the development of Social Europe. As legal scholars have noted, it is “light years” ahead of earlier efforts—an unprecedented move by the EU to support national collective bargaining systems and strengthen wage adequacy without directly setting wages.
The directive has already had measurable effects. Many EU countries have increased their minimum wages significantly and aligned national frameworks with the directive’s principles. In Ireland, the minimum wage has increased by 34% from 2020 to 2025, and the government committed to meeting the 60% of median wage benchmark by 2026. However, collective bargaining coverage remains low (approximately 34%), and the directive’s required national action plan on collective bargaining has yet to be published.
However, this progressive directive now faces an existential threat. In January 2025, Advocate General Nicholas Emiliou of the European Court of Justice (ECJ) issued an opinion in the case Kingdom of Denmark v. European Parliament and Council of the EU, recommending that the AMWD be annulled in full. His core argument is that the directive exceeds EU legislative competence, violating the “pay” exclusion in Article 153(5) of the Treaty on the Functioning of the European Union (TFEU).
Emiliou’s argument hinges on the claim that because the “object” of the directive concerns wages, it falls outside the EU’s legal competence—even though the directive neither sets pay nor mandates specific wage levels. His interpretation dismisses decades of case law that understand the pay exclusion restrictively, and overlooks longstanding EU legislation that regulates pay-related aspects of working conditions, including maternity benefits, paid leave, and equal pay.
The Court’s upcoming decision will have profound consequences: a ruling against the AMWD could severely curtail the EU’s ability to address poverty, inequality, and labour market insecurity—key drivers of discontent that are fuelling far-right populism and eroding trust in European integration. At stake is far more than one directive. The ECJ’s upcoming decision will determine whether Social Europe remains a meaningful pillar of European integration or becomes an empty promise. The AMWD is a vital tool in the effort to restore trust, fairness, and social progress within the EU. Upholding it is essential for preserving the Union’s credibility as a force for social justice and democratic legitimacy