There should not be anarchy in the European labour market, a suggestion for a new directive from the EU commission, published in March this year, states. It demands that wages for foreign and local workers should be the same.

The proposal sets out that posted workers will generally benefit from the same rules governing pay and working conditions as local workers. This will be done in full respect of the principle of subsidiarity and the way these conditions are set by the public authorities and/or social partners in the Member State in question. Currently, posted workers are already subject to the same rules as host Member State employees in certain fields, such as health and safety. However, the employer is not obliged to pay a posted worker more than the minimum rate of pay set by the host country. This can create wage differences between posted and local workers and potentially lead to unfair competition between companies. This means that posted workers are often remunerated less than other workers for the same job.

Today, workers who are sent by agencies or on commission to other countries within the European Union have the right to the minimum wages there. In Sweden and Germany, who doesn’t use minimum wages, the lowest clauses in the countries’ collective bargaining agreements apply.

In the suggestion for the new directive, the principle of “wages and other benefits” should instead apply. That means, not only should the wages be the same for foreign workers, but travel expenses and per diems should be the same too.

The suggestion split Europe in two halves. Particularly Eastern European countries resist it, while northern manufacturing countries such as Sweden and The Netherlands press hard for it. Sweden’s government is one of the fiercest proponents.

“I am optimistic. One has to ensure progress, and then one can’t sit on one’s backside. Then one must be around and argue”, says Ylva Johansson, Labour Market minister from the Swedish Social Democratic Party, to the Swedish broadcaster SVT.

Eastern European countries see the new directive as a way to block agency workers and contractors from those countries.

“Then it becomes cheaper to hire someone from Sweden instead. Why take someone from Bulgaria if the wages are the same?” Peter Ganev, national economist at the independent think-tank Institute for Market Economy in Sofia.