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Business

Macron lobbying against labor dumping

Emmanuel Macron is on tour in Eastern Europe trying to drum up support to curtail companies from posting workers in other EU countries for long periods. Such new rules are seen to protect Western European workers.

On the first of three stops, French President Emmanuel Macron arrived in Salzburg on Wednesday to shore up support for stricter European Union guidelines that could curb the export of cheap labor from Eastern and Central Europe to richer neighbors in the West.

In Austria, Macron will meet like-minded Austrian Chancellor Christian Kern, as well as the Czech and Slovak prime ministers, Bohuslav Sobotka and Robert Fico. Afterwards Macron, who has only been in office a little over 100 days, is set to visit Romania and Bulgaria.

The EU policy that governs the temporary posting of workers across the bloc is an especially hot topic in France, where unemployment runs high and the far-right National Front party has called for scrapping the current European Union rules.

Macron won the recent French elections with a pro-EU platform, but he also promised voters to tackle problems within the EU and not just focus on domestic problems.

By the rule book

The current EU directive allows companies to post workers in other EU countries for a limited amount of time. Western European countries have been concerned that this leads to labor dumping, because employers must only pay minimum wage in the host country, and because they can save additional costs by paying social insurance in the workers' home countries, allowing employers to hire workers for less where welfare costs are higher.

Posting workers is especially common in the construction and manufacturing industries. Although they don't account for more than a small fraction of the EU's total workforce, they are perceived as pricing out local workers in Western Europe, putting downward pressure on wages and exacerbating inequalities in wealth.

This concern was one of the factors behind Brexit, Britain's decision to leave the EU.

Critics of the current regulations, which took effect in 1996, years before a large chunk of the former communist bloc joined the EU, say it gives eastern European service providers an unfair advantage because their wage and social security costs are lower. Many have also called it "social dumping."

Change in the air

The European Commission has proposed to limit posted work to 24 months, but France and Austria want the maximum timeframe to be shorter. The most important change would be to require companies to pay posted and local workers the same wages.

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In addition, the prevailing labor laws of the host country on such things as overtime, bonuses and vacations days would be applied if a posting lasts longer than two years.

However, the proposals haven't won the support of 11 EU countries, including Poland, which is the largest source of posted workers, with around 300,000 to 400,000 a year.

Nine other former communist member states have also voiced their opposition, as has Denmark, which says the proposals don't go far enough to protect Danish collective bargaining.

The EU member nations will debate the changes this fall before eventually voting on them.

Poland's government has hinted it could retaliate if the new rules pass. Pointedly, Macron is bypassing Poland and Hungary, both of which are perceived by many in Brussels as backsliding on democratic norms.

tr/hg (AP, dpa)

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