Anyone who vaguely follows EU politics may have heard of the so-called Vaxholm case, a dispute between 2 Swedish trade unions and a Latvian firm that was carrying out work in Sweden and not respecting collective wage bargaining agreements there. The issue cuts at the heart of the Nordic labour market model, where agreements between employers and trade unions form the basis of how wages are set. Unlike most of Europe, there is no minimum wage set by law. The problem is however that this approach is in stark contrast to how the EU works – it’s a very law and rule based community (although some would say that adherence to those rules is lousy at times – but that’s another story). I very much suggest reading this overview by Eric Sundstr√∂m, explaining why this matter is important.
If the ECJ case goes against the Swedish unions, the implications for the labour markets in Denmark, Finland and Sweden will be huge, and this at a time when the Nordic model is being used as an example in other European countries of how to combine an efficient economy and social protection.