EU risks breakup without social dumping reform

The EU risks breakup if it fails to overhaul a rule that lets firms send temporary workers from low-wage countries to rich economies without paying local social charges, French President Emmanuel Macron said Thursday.

"Some political or business circles seek to use the EU's funds while at the same time developing a system of social and fiscal dumping," Macron said in Bucharest.

Without reform, "this will lead to the dismantling of the European Union," he said.

"Public opinion in more developed countries with higher salaries will not accept the system in its current format," he warned.

Macron made the remarks alongside Romanian President Klaus Iohannis on the second leg of a three-day blitz through Austria, Romania and Bulgaria.

He is seeking to drum up support for revamping the rule at a European Union summit in Brussels on October 19-20.

The so-called Posted Workers Directive is under fire from wealthy EU nations.

The rule allows businesses to send workers from low-cost countries in central and eastern EU countries on short-term assignments to western Europe.

In doing so, firms do not have to make contributions to the host country's health and welfare systems -- something that critics call "social dumping."

Backed by Vienna and Berlin, Paris wants the job duration of detached employees to be limited to 12 months -- half the period proposed by the EU's executive Commission.

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

The topic is pitting high-cost western EU members against their poorer neighbours in the former communist bloc, where most of the cheap labour comes from.

Eastern and central European governments say Macron's proposals go too far and will undercut their competitiveness.

However, there were signs of progress after discussions with the leaders of Slovakia and the Czech Republic in Salzburg on Wednesday.

Slovak Prime Minister Robert Fico acknowledged that finding a solution would be "good news for the EU" but said any such pact should have the support of Budapest and Warsaw -- two staunch opponents of France's plan.

Romania's president on Thursday also underlined the "strong discontent" in his region over the issue.

The directive needs to be "improved," he said, but without "eliminating competition or the free market".

Macron will discuss the issue with Bulgarian leaders on Friday.

source: AFP