The new EU legislation on road transport, limiting East European companies’ access to Western European markets, is perceived by many in the East as yet another attempt to prevent citizens of new EU members states from reaping the benefits of the single market.
“Today we are witnessing a huge tragedy.” Peter Lundgren, a Swedish member of the European parliament, was not speaking about Brexit, the EU’s current blockbuster drama. Nor was his statement provoked by Europe’s inability to prevent the bloody civil war in Syria. Lundgren’s disenchantment was related to the so-called ‘mobility package’, a set of EU measures regulating lorry drivers’ working time and remuneration among other aspects of road transport.
At first glance, the topic wouldn’t seem to be worth such a dramatic tone. However, the package has been one of the most controversial pieces of EU legislation in recent times. It hasn’t attracted the attention received by the EU copyright reform, since that involved Brussels’s attempt to rein in global giants like Google and Facebook, and the dispute has never reached the tones of the migration debate. But in the last two years, since the European Commission proposed them, the new rules for road haulage have pitted East against West.
What the mobility package is all about
In a nutshell, the new legislation aims to make road traffic safer, reduce CO2 emissions and air pollution, and ensure proper conditions for workers. In fact, measures on employment and social conditions limit East European companies’ access to well-paying West European markets. Hauliers will need to make sure that their drivers return home and get rest at least once every four weeks (the European parliament supported an amendment that requires lorries to return back to their home-base as well), which means that companies from peripheral countries like Bulgaria or Latvia can operate continuously for no more than two weeks in the profitable French or Dutch markets.
In addition, drivers need to be paid the local minimum wage (if it is higher than the one in their native countries) as soon as they cross the border, depriving East European haulers and drivers of their cost advantage. East European companies have the benefit of employees who are relatively cheap, mainly because they require lower social security payments in their home countries and are willing to spend long hours on the road, sometimes up to three months.
The cost advantage of course comes with an unpleasant twist. Lorry drivers rarely spend the night in a hotel. They rather sleep in their truck cabins and often go back to their families only once in three months as required under the current legislation. But many employees take these jobs because they pay well, at least by the standards of their home countries.
The question is, should anyone stop workers who willingly take tougher jobs?
Western European governments, trade unions and companies say ‘yes’. According to them, drivers are exploited by their employers who refuse to abide by the higher social standards in the West. Eastern European governments and transport companies say ’no’, maintaining that the free market allows everybody to pursue their best interests, giving East European drivers the chance to earn wages on par with their West European peers.
For the so-called ‘European Road Alliance‘ (Austria, Belgium, Denmark, France, Germany, Italy, Luxemburg, Sweden and Norway), the mobility package will prevent unfair competition caused by social dumping, i.e. by companies based in countries with lower salaries and social standards. In his recent letter to European citizens, Emmanuel Macron painted a picture of a stronger, re-energized European Union, but played down the importance of the bloc’s single market. “A market is quite useful, but it must not make us forget the need for protective boundaries and unifying values,” wrote the French President.
The alliance of so-called “like minded countries” (a floating coalition led by Poland, Bulgaria, Latvia, Lithuania, Estonia, Hungary and Romania) takes the opposite view. In their opinion, the new legislation is another example of protectionist policies disguised as social rights concerns, aiming to stop East European companies competing on equal terms with their West European peers. “I have the feeling that if companies from big countries do business in Eastern Europe, it is called a free market. If East European companies do business in the West, it is unfair competition and social dumping,” said Bulgarian Socialist MEP Peter Kouroumbashev, voicing sentiments that are shared by many East Europeans.
The package has passed the first reading in the European parliament and European Council. Both institutions need to find a compromise after the elections in May, when the new European parliament will be elected.
West vs East
Passions, however, refuse to settle. Disputes will continue to cast a shadow over relations between the West and East European members of the EU.
The European Commission proposed the package in 2017 as a response to several countries – France and Germany among them – introducing legislation to restrict East European companies from operating in their markets. The Commission, as guardian of the treaties, initially responded by taking legal action against both countries. In 2016 it claimed that “the systematic application of the minimum wage legislation by France and Germany to all transport operations touching their respective territories restricts in a disproportionate manner the freedom to provide services and the free movement of goods”.
Later, however, the European Commission sided to a large extent with the “Road Alliance”, and adopted all the measures proposed by the nine member states. The European Commission’s change of heart was largely driven by Brexit. The UK’s vote to leave the EU, held just weeks after infringement procedures were initiated against France and Germany, was a wake-up call for the Brussels institutions, which scrambled to thwart any real or perceived sources of the UK’s discontent with the EU. One of those issues was immigration, the other was competition from East European labour.
Faced with growing anti-European sentiment in France and Germany, the European Commission rushed to dampen any rumour of “Frexit” by handing Macron a strong weapon against his opponents in the 2017 presidential elections. Instead of fighting the provisions in the so called Loi Macron, which introduced a number of measures that may be perceived as contrary to the letter and spirit of the single market, the European Commission embraced them.
This turn of events has not been greeted with any pleasure in Eastern Europe. Currently, the more or less liberal rules of the EU’s single market have allowed Romania’s GDP per capita to rise by more than 60% since 2006, while the Czech Republic is already richer than Portugal. Any measure that prevents this catch-up process is regarded as an affront by most East European governments. While policies like the mobility package may help to soothe tempers in the West, they give rise to anti-EU sentiment in the East.
Over the last decade, more affluent countries have increasingly blamed new member states of a form of social dumping for their lower taxes and salaries. Governments in new member states fear that a new string of legislative proposals on issues such as tax harmonization and minimum wages, which might seem fine in theory, will follow the mobility package stifling their growth potential and producing another wave of emigration by skilled workers.
This article by Ilin Stanev was originally published by the Bulgarian weekly Capital. It was made available through the European Data Journalism Network (EDJNet) and is republished here with adjustments under the Creative Commons license 4.0 International (CC BY 4.0). Photo by Erich Westendarp via Pixabay.