Macron tours Central and Eastern Europe in push for labour reform

French President Emmanuel Macron began three days of visits with Central and Eastern European leaders on Wednesday in hopes of building support for politically sensitive labour reforms. By endorsing limits to the European Union’s posted workers scheme, the pro-free-market Macron is championing is a protectionist measure to push for greater European integration.

French President Emmanuel Macron tours Austria, where he was to meet Slovak and Czech leaders, 23 August 2017. Reuters/Bertrand Guay/Pool

The EU directive on posted labour – not to be confused with the freedom of movement rules of the European single market – allows companies to send employees from one member state to work in another as long as they guarantee they earn the minimum wage of the host countries.

Minimum wages tend to be higher in Western member states, who complain the scheme translates to low-paid workers from Eastern countries taking local jobs and eroding labour protections.

“It is indeed a small part of the European workforce, but, for some countries and sectors, this is really an important niche,” says Magdalena Bernaciak, senior researcher with the European Trade Union Institute in Brussels, of the rift between east and west.

“However, the number became so big that concerns were raised in the West in relation to potential job losses or market niche loss. And, according to Central and Eastern European states, this is really the problem: not the posting itself, but the fact that it poses competition to Western European enterprises. And this is why Western European countries raised this initiative seeking to limit it.”

Benefits on par with host countries

Following complaints from France and others, the European Commission is proposing to alter the rules to oblige companies to also provide benefits on par with host countries and to put limits on the lengths of contracts.

“There is real expertise to be exported and shared across Europe,” French member of European Parliament Elisabeth Morin-Chartier, who helped draft the new plans, told RFI.

“Much has been done at the European level to fight unemployment through worker mobility, so posted labour is both normal and necessary. But it has to be regulated, so that it does not become a matter of unfair competition.”

For Emmanuel Macron to seek to bring reluctant Central and Eastern member states on board with the tightening of the rules marks a seeming break from his own liberal, free-market convictions.

On the one hand, it reflects a concern with support of workers at home in France.

“The issue of detached workers is shocking for millions of French workers, and Emmanuel Macron seems to be ready to have a more protectionist and pro-regulation stance,” says Thomas Guénolé, an associate researcher with France’s Institute for International and Strategic Relations, who notes Macron has taken a similar turn before.

“We already saw Macron take a stance against his pro-market, pro-deregulation ideology on the STX naval industry file, because he decided that the state would buy shares of the company to save it,” Guénolé notes. “So, when there is very strong discontent on this or that topic, Macron is ready to get rid of his usual convictions to do something that would be appreciated by the population.”

On the other hand, Macron is also in the middle of a drive to deepen integration of the EU, and his choice of leaders to meet reflects careful calculations of the European political landscape. He met Slovak and Czech leaders in Austria on Wednesday and was to head to Romania and Bulgaria on Thursday and Friday. But he is bypassing Poland and Hungary.

“Poland is the biggest sender of posted workers in the region and is also a very active and opponent of the current version of the proposals, but at the moment it has a quite weakened negotiating position given problems it faces on other fronts, with rule of law, in the EU,” Magdalena Bernaciak says. “And Hungary also has quite a bad record in terms of rule of law.

“But then we have the Czech Republic and Slovakia, who at the moment seem to be trying to distance themselves from Poland and Hungary given the authoritarian nature of the two regimes, and to highlight their attachment to Europe, they may be willing to change their view on the posting revision.”

Bernaciak also notes Macron may be looking to persuade Romania and Bulgaria to get on board with the reforms.

“The idea may be to lure them into compensatory deals,” she says. “We don’t know, but I think the idea basically is to look and use cracks in this Central and Eastern European anti-revision front.”