The European Policy Center, based in Freiburg, Germany, looked at the new posting regulations. The conclusions could have surprised many Western politicians. The organization points out to many disadvantages of the new law.
The Center for European Policy is a German non-governmental organization that monitors and analyzes legislative processes at the level of the European Union on an ongoing basis. CEP shares its analyzes and research in the form of reports with the media, politicians, scientists. All the data is public and can be accessed on the official website. Its director is a German economist, Ph.D. Lüder Gerken.
The Foundation has also decided to focus on the topic of EU posted workers directive, which is a hot topic in Europe. Recently, CEP has published a report analyzing the effects of these regulations.
Its conclusions coincide with those presented in the report „Posting of workers in transport – opinions and concerns of European entrepreneurs” prepared by the editors of TransINFO.
It will be more expensive
As we read in the CEP assessment regarding the economic consequences of the posting provisions, they will limit price competition and the freedom to provide services on the transport market, in breach of Article 56 of the Treaty on the Functioning of the European Union.
The European Commission wants to provide drivers with „equal pay for equal work”. However, according to CEP, this will lead to the fact that posting from countries with the lower level of remuneration to those richer will be much more expensive. This in turn will make the prices of transport services clearly increase and the efficiency of the internal market will decrease. This, in turn, may cause price increases for products, so higher labor costs will ultimately be transferred directly to consumers and businesses throughout the Union.
Transport costs will also increase
Most representatives of the European transport industry also expect the price of services to increase as one of the main effects of the new posting legislation. This is the result of the Trans.INFO report, based on a survey
How will the directive affect the prices of transport services?
Infographic: Trans.INFO
Regulations deprive truckers of work
„Restriction of the freedom to provide services, that could be justified by the objectives of combating distortions of competition or protecting workers” – The Center refers to the Opinion of the Advocate General Court of Justice of the European Union in 2015. However, the inclusion of posted drivers in the host country’s salary regulations (including collective agreements), serves only the local workers not all employees – emphasizes CEP. The costs of posting will increase significantly, which will reduce the demand for transport services from countries with lower wages and „they will be removed from the western market”. Drivers employed in these companies „will not take advantage of the new regulations, but will probably lose their jobs” – summarized the authors of the CEP report.
Benefits arising from the provisions on posting
Apart from the negative effects of EU law on posting, CEP also sees positive sides. The new directive precisely clarifies the issue of the Member States’ control powers regarding the posting of workers.
Currently, the host country can carry out all the controls necessary to enforce the provisions on posting. The new directive provides for specific control activities and clearly defines a number of formalities and documentation required from the company posting the employee and the delegate himself.
Photo: Flickr.com/Cédric Puisney CC BY 2.0