Geopolitical conflicts and economic uncertainty condition the daily lives of European citizens. The increase in prices in the European Union is close to 4%, the highest level in three years, which could lead to a new inflationary crisis that, if not combated, will erode families' pockets. And one of the main tools of governments to fight against the loss of purchasing power, especially among workers with lower incomes, is the increase in the legal minimum wage of each country. Something for which many of the countries of the Union are already preparing.
In Spain, the early elections will foreseeably accelerate the approval of the increase in the interprofessional minimum wage, the negotiation of which usually lasts, sometimes, well into January of the following year. However, the Ministry of Labor, in the hands of Sumar, is in a hurry to approve the new increase before the appointment with the polls. To this end, the second vice president and Minister of Labor, Yolanda Díaz, has given three weeks to the committee of experts studying the most appropriate increase in the SMI to issue their verdict for 2027. In that race, the top union leaders of CC OO, Unai Sordo, and UGT, Pepe Álvarez, advanced this Tuesday that they will demand that the minimum wage rise by 7% in 2027 to 1,306 euros in 14 payments (just over 1,500 euros, if counted in twelve payments, as is done in the European Union).
In countries such as France, Belgium, Malta, Slovenia or Luxembourg, however, the increase in the minimum wage is automatically indexed to formulas based on the evolution of prices or the cost of living. The same applies to the explicit legal formula applied in Romania, where the annual increase in the minimum wage is equivalent to the sum of expected inflation and labor productivity growth. This is explained in the report Minimum wages in 2026: an annual review, prepared by Eurofound, an agency where the European Commission, governments, employers' associations and unions are represented.
However, the majority of States, as is the case in Spain, increase their minimum wages according to the recommendations of expert committees or government working groups. These take into account several criteria, among which inflation usually has an important weight, but it is not the only one. This is the formula of countries like Germany, Ireland, Greece, Croatia or Lithuania. Therefore, as in Spain, the increase for 2027 in these States has yet to be set, except in Germany and Ireland.
In the German case, in 2025 its committee of experts set a multi-year increase for 2026 and 2027, according to which next year its minimum wage will increase by 5%, going from 13.90 euros per hour worked to 14.60 euros. Likewise in Ireland, according to this Eurofound review, the Executive has confirmed in the budgets for next year that its minimum wage will increase by 5.6% to 14.94 euros per hour. In both cases, the increases exceed the latest advances recorded in September for inflation in these countries (3.3% and 4.1% respectively).
Thus, countries where the formula for updating the minimum wage is not automatic and preset have more room to raise the remuneration floor above inflation and make its recipients gain purchasing power. Other States such as Italy or Austria have the same margin, where there is no general state automaticity to increase this income, but many collective agreements (as is the Italian case for domestic or cleaning employees) do establish automatic increases linked to inflation.
Other countries such as Hungary, Estonia or Lithuania are immersed in progressive increases in their salary floors so that they reach at least 50% of their respective average salaries, according to this analysis. To this end, Hungary initially agreed to a 14% increase in its minimum wage by 2027 (after increases of 9% in 2025 and 13% planned for 2026). Although a slowdown in its economy forced the Hungarian Government to renegotiate these increases. For its part, Portugal is also immersed in a tripartite agreement (Government and social agents) for the period 2025-2028 that established a fixed increase of 50 euros per month per year in the minimum wage, which will be the increase that will be applied. Finally, the Netherlands will also apply a change to its minimum wage in 2027 so that this income in the case of the youngest beneficiaries goes from representing 60% of the state minimum wage to 75%.
In any case, and although it remains to be decided how much the minimum wages will rise in many of the community countries next year, Eurofound experts warn that the rebound in energy prices registered at the beginning of 2026 generates a lot of uncertainty about the behavior of inflation. And, according to this report, this circumstance will determine whether governments will have to activate safeguard clauses or salary reviews to compensate for inflationary spikes in 2027 and thus avoid losses in purchasing power.
