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Charlemagne: the row over “posted workers”

AS SUMMERS go, Marek Miesikowski’s wasn’t bad: a fortnight in Aix-en-Provence, a hop across to Corsica, then winding down in Marseille for a few weeks. Mr Miesikowski, a student from Poland, was hauling ventilation pipes across construction sites rather than sunning himself on the Riviera, but he is not complaining. Two months working in France earned him enough to support an entire year of his physiotherapy studies in Poznan.

Like almost half a million of his compatriots, Mr Miesikowski was taking advantage of the European Union’s rules on “posted workers”, designed to govern pay and benefits when a citizen from one European country takes temporary work in another. The Polish agency that employed him arranged his work with French clients, covered his transport and housing costs and organised a three-week language course before he left. Posted workers pay social security at home rather than in their country of work. Their employers are obliged to pay them only the basic minimum wage in the host country, rather than the often higher “sectoral” wage. By most estimates they make up less than 1% of the EU labour force (far more Europeans choose to work abroad permanently). The rules covering their employment are complex, arcane and tedious. Yet they have become the subject of a bitter row among Europe’s leaders.

To simplify a little, a coalition of wealthy EU countries, led by France, believes the current rules encourage “social dumping” (cheap foreign workers undercutting local ones), and wants to tighten the conditions of posted work. “Equal pay for equal work in the same place” is their mantra. The poorer countries of eastern Europe retort that these pious words are a cover for old-fashioned protectionism. On joining the EU they had to open up to western European goods and capital; why should their service providers now be locked out of high-wage markets?

On inspection, most “east-west” conflicts inside the EU turn out to be rather more variegated. But this one cleaves the continent more or less in two, and has been inflamed by the odd decision of Emmanuel Macron, France’s new president, to place reform of posted work at the heart of his EU policy. Last month, during a tour of eastern Europe, he called the rules “a betrayal of the fundamental aspects of the spirit of European legislation”. He scuppered a proposal to revise the law in June, and insiders say his approach has made striking a compromise harder. (Some in Britain not yet reconciled to Brexit wonder if common cause can be made with Mr Macron to limit immigration by EU workers. Fat chance: in 2015 Britain registered barely 50,000 posted workers, so little relief would be available that way.)

Rows over social standards have a long history inside the EU, but were bound to intensify when the club expanded to ten poorer countries in the 2000s. Incomes in the east and west have not converged as quickly as some hoped, and the incentives for workers like Mr Miesikowski are no puzzle: France’s minimum wage is three times as high as Poland’s. Some sectors are highly exposed. By one estimate, posted workers account for one-third of the labour force on construction sites in Belgium (where labour taxes are eye-watering). Kris Peeters, the deputy prime minister, says that Belgian workers have been locked out of local jobs and that smaller firms, which cannot easily hire posted workers, struggle to compete. But legitimately employed posted workers are greatly outnumbered by the unregistered or fraudulent sort. If social dumping is a problem, attacking posted workers does not look like much of a solution.

Latest updates Norway’s sovereign-wealth fund passes the $1trn mark Graphic detail an hour ago A an hour ago Retail 10 10 12 21 hours ago See all updates So why all the fuss? Some argue that voters aghast at seeing their legal protections supposedly undercut by foreigners will be tempted by political extremism. “Some parties are very anti-European, and one reason is that so far we have no solution for the posting of workers,” says Mr Peeters. Mr Macron shares this view. He has pinned the blame for Britain’s vote to leave the EU on “workers from eastern Europe who came to take British jobs”. Rich countries that choose to erect barriers to cheaper workers from foreign countries might simply end up importing more of their goods or offshoring production, points out Bruegel, a Brussels-based think-tank. But a manufacturing plant in a faraway country is less visible than foreign workers on local construction sites or meat-processing lines.

Single market for me but not for thee

For the easterners, threats to the posted-worker regime get at a niggle that has worried them for years. Mr Macron’s tough line reminds some of the “Polish plumber” panic that helped turn French voters against a proposed EU constitution in a referendum in 2005. Some accuse the president of making scapegoats of foreign workers to help smooth the passage of a contentious labour reform he is pushing at home. Why else would a newly minted head of state with a long to-do list devote so much energy to an issue that should be the preserve of middle-ranking ministers?

The EU’s governments are hoping to reach a compromise in October. Two French proposals remain as sticking-points: to reduce the time limit for posting to 12 months, and to include lorry drivers in the new legislation. Mr Macron has the backing of Germany, Italy and others. Poland remains an implacable foe, but its irascible government has few friends in the EU; Mr Macron’s diplomatic efforts with more conciliatory governments, like those of Slovakia and the Czech Republic, may bear fruit.

Any changes to the law will be symbolic, not least because the average posted worker toils for well under a year. But having dedicated himself to this obscure fight, Mr Macron needs a win as he prepares for the bigger battle to come, over reform of the euro zone. His calls for a “Europe that protects” resonate with those who blame an excess of Anglo-American deregulatory zeal for fuelling populism in the EU. But they risk alienating those Europeans who consider themselves workers, not aggressors.

This article appeared in the Europe section of the print edition under the headline "Going postal"