Trade unions are warning that the ‘wait and see’ approach being taken by the European Central Bank (ECB) is not enough to help Europe escape economic stagnation.
Following the 0.25% cut in interest rates announced today by the ECB, the European Trade Union Confederation (ETUC) is calling for more decisive monetary easing and increased collective bargaining to support strong wage growth and restore purchasing power.
The ECB has published data showing a slowdown in negotiated wages is underway, with a sharp fall from 5.4% in Q3 2024 to 2.4% in the first quarter of 2025 and further weakening expected by the end of the year.
Despite easing inflation, essential costs like food and services remain high, with food, alcohol, and tobacco prices rising by 3.3% and services by 3.2% in May. Wage increases are necessary to ensure workers' purchasing power keeps pace with living costs.
ETUC General Secretary Esther Lynch said:
“The ECB’s wait and see approach is just not up to the scale of economic slowdown that Europe is facing, the price of which is already being paid by working people through fewer jobs and wages that don’t go as far as they used to.
“The ECB needs to take decisive action to get the economy growing again by making investment easier and incentivising spending. Reviving domestic demand has been made even more important in light of the US government's protectionist trade policy which is undermining demand for European exports.
“Of course, the best way to put money into the economy is to put it into the pockets of working people, who will spend it rather than hoarding it in offshore accounts. That is why we need to see policymakers go further in supporting collective bargaining as the most effective way of arresting the alarming fall in wages and restoring people’s purchasing power.”
