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AbstractHow should the European Union cope with Member States that no longer respect the basic values of the Union? This article reviews the responses of the major European Union institutions to Poland and Hungary as their governments removed checks on their power, eliminated the independence of judiciaries and failed to honour their European commitments. As the article demonstrates, the responses of EU institutions have so far been ineffective in bringing these Member States back into line with European values. We examine the various proposals that have been made to do better, concluding that there is promise in some legal strategies that are available now, but have yet to be tried.

Purpose – In this paper, we introduce firm heterogeneity in the context of a model of non-compliance with minimum wage legislation. Design/methodology/approach – Theoretical modeling under government compliance policy and wages & employment under non compliance. Findings – The introduction of heterogeneity in the ease with which firms can be monitored for non compliance allows us to show that non-compliance will persist in sectors which are relatively difficult to monitor, despite the government implementing non stochastic monitoring. Moreover, we show that the incentive not to comply is an increasing function of the level of the minimum wage and increasing function of the gap between the minimum wage and the competitive wage rate. Originality/value – We have shown why non compliance persists in certain sectors of activity despite frequent inspection by government agencies.