Posting of Workers Directive Reform: Protection Against Social and Wage Dumping or Internal Market Restriction?

The same wage for the same work done in the same location: in the future employees from other EU countries will not only receive the valid minimum wage, but also the valid collectively-agreed wages applicable if they work in another EU country. Their work stays will also be limited initially and should not last longer than a year, with the option of applying for a special extension to 18 months. Will this rule provide better protection from wage and social dumping for employees? Or will the free offering of services in the EU be hindered by labour market isolation? According to Matthias Dauner, cep – Centrum für Europäische Politik, Freiburg, the reform proposal amounts to a "declaration of war" on the liberal defenders of the internal market and an attack on the business model of many companies from member states in Central and Eastern Europe, whose competitive advantage depends heavily on their relatively low wage and associated costs. Although the reform appears to strengthen the rights of workers posted abroad, in reality the number of postings abroad can be expected to drop; and companies posting abroad and their employees in the new member states will suffer as a result. Ingo Kramer, Confederation of German Employers' Associations, also sees the reform as an "unnecessary intervention in the internal market." A stricter Posting of Workers Directive would not represent the realisation of a functioning internal market, but protectionism and a massive cost driver for German companies. For Anke Hassel, WSI, and Bettina Wagner, Hertie School of Governance, by contrast, the Posting of Workers Directive reform is a requisite condition for a better internal market. They argue that productive competition can only take place in the presence of legal certainty and regulatory arbitrage.