Across Europe, it is becoming ever more difficult to reconcile the EU’s commitment to free movement of labour with public hostility to immigration. The UK’s vote for Brexit has alerted politicians to the dangers of ignoring the widespread perception that foreign workers undercut locals and take jobs. The issue is especially charged in France, where Marine Le Pen’s anti-immigrant, anti-EU National Front is gaining ground in the run-up to next year’s presidential elections.
This is the backdrop to the commission’s decision to press ahead with an overhaul of rules on the employment of temporary expat workers. Under existing rules, companies that post workers in another EU member state must pay the host country’s minimum wage, and meet minimum welfare standards. But “posted workers”, who continue to pay social security charges at home, can still prove cheaper than locals.
France has led demands to amend the rules, setting a two-year limit on postings and making employers meet all national standards - including industry wage agreements. Prime minister Manuel Valls threatens to boycott the law entirely unless it is tightened. Many eastern European governments want better enforcement of existing rules, to ensure their citizens are fairly treated, but oppose the changes, viewing them as yet another instance of rich countries using migrant workers as scapegoats for domestic problems.
The debate has assumed a political importance out of proportion with the proposals’ practical effect. The number of posted workers has risen rapidly in recent years, to some 1.9m, but still represents only 1 per cent of the EU’s workforce. Many come from the EU’s richest countries. It is true that eastern European companies compete in part on lower wages - but the gap is narrowing, partly because some workers are able to earn more abroad than they would at home.
There are also valid objections to the principle of equal pay for equal work in a particular location. Wages reflect the performance of a worker and the financial position of a company as well as national living standards. In many countries, collective bargaining rules allow for differences in pay even within a company.
Nonetheless, taking too purist a view on free movement of labour may simply play into the hands of populists. Ms Le Pen has for years blamed the posted workers system for putting French workers in construction and agriculture out of jobs. She is finding a ready audience. Pierre Moscovici, the EU’s commissioner for economic affairs, is right to argue that the EU must act to defuse voters’ anger and distrust of globalisation. The changes under debate could help to counter suspicion of migrants and signal that the EU is prepared to defend social standards.
Unless the EU recognises these pressures, governments will be increasingly inclined to defy the commission and take matters into their own hands. That would be a risky development, damaging the EU’s cohesion.
Mr Valls’ threats of a boycott were irresponsible - especially given the existing resentment small member states feel against the more powerful ones who continually break the bloc’s rules with apparent impunity. Yet the thrust of France’s proposals may be sensible. This reform follows a series of judgments by the European Court of Justice that go in a similar direction, supporting member states that wish to limit migrants’ access to benefits.
These represent small but significant limits on free movement of labour, gradually chipping away at a principle on which the EU’s institutions have previously taken a more absolute view.
