Social dumping or veiled protectionism?

14.09.2016 | European Parliament , economy , European Union
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Social dumping or veiled protectionism?

Eastern and Central European companies may be forced out of the western market should their competitive advantage related to cheaper labour cease. In the opinion of MEP Csaba Sógor, Romanian companies that conduct business abroad could be adversely impacted by recent efforts to level services prices, which are becoming increasingly visible within the European Union and in some Member States.

On Wednesday, the 14th of September the European Parliament adopted a report entitled Social Dumping in the European Union. RMDSZ MEP Csaba Sógor voted against it, as it does not favour the interests of Romanian companies that conduct business abroad or of their employees. 

One percent of the European labour market, nearly 2 million people work in a different Member State than where they are from, most of them in the construction industry, in agriculture, transport and the financial sector. According to Csaba Sógor, many Romanian or other Eastern European companies obtain contracts from outside the country because of labour costs that are more competitive than in western European countries. With recent moves, however, the EU aims to eliminate these differences. 

In the opinion of MEP Csaba Sógor all European states agree that the EU should step up the fight against illegal labour and other infringements but fundamental values of the common market should nevertheless be respected:

 „Back in the 2000s Central and Eastern European countries joined a European Union based on an open market economy with free competition and on a single market with four freedoms, opening up their economy for fierce competition from companies that had far more capital and far more technological advantage than theirs. What we see today, however, are attempts by older Member States to introduce a pick and choose variety of competition and single market, depending on what suits perceived interests or populist political approaches better” – stated Csaba Sógor during the debate.