Published: Thu, August 24, 2017
Global News | By Stacy Ballard

European Union risks breakup without social dumping reform: Macron

European Union risks breakup without social dumping reform: Macron

The so-called Posted Workers Directive allows firms to send temporary workers from low-wage countries to other member states without paying local social charges.

While overseas, posted workers continue to pay into the tax and social security systems of their home countries, allowing employers to hire them for less than in Western countries where welfare costs are higher.

Macron made the remarks on the second leg of a three-day tour through Austria, Romania and Bulgaria, as he seeks to drum up support for his ambitious reform proposals.

"It is clear the directive needs to be clarified and improved".

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Mr Macron stressed, "The single European market and the free movement of workers simply has the aim of favouring countries which promote the least form of social protection".

France and Austria want to fight against the erosion of labour standards within the European Union, the leaders of both countries made clear after meeting Wednesday in Salzburg.

"Austria and France are on the same wavelength", Macron added.

It is a top priority for the Commission "not to hinder the process and instead make sure that we make headway with the aim of bridging divides between standards of workers in central and eastern Europe and those in place in western Europe", said Slovak EU Commissioner Maroš Šefčovič as quoted by the TASR newswire.

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Under the current rules, employers only have to pay minimum wage if they send workers overseas, and they pay social security in the workers' home country rather than the host country. In addition, they don't have to pay into the host nation's social system.

Although the posted workers issue affects less than 1% of the EU's workforce, experts say the trend is on the rise.

Macron is also demanding greater efforts to fight abuse of the directive, under which 286,000 people were employed in France in 2015.

Backed by Germany and Austria, France now wants the duration of these job postings to be limited to 12 months, half the period proposed by the European Commission.

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However, there were signs of a breakthrough after discussions with the heads of state of Slovakia and the Czech Republic in Salzburg on Wednesday.

Poland is the country that benefits most from the Posted Workers Directive. An estimated 500,000 of Polish nationals are employed by Polish companies in other European Union member states.

Top officials in Brussels on Wednesday welcomed Macron's reform push.

Eastern European EU members are concerned that the plan by the EU executive body would discriminate against its citizens.

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