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Labour Market Reform and Visegrad Countries: Deep Rooted Concerns and How to Address Them

on 20.02.2018

Alena Kudzko, in the framework of the Think Visegrad project, developed a policy brief, in which she focused on the issues of labour market reforms in the European Union and their impact on the Visegrad group. She proposes a number of recommendations for the Central European states not to find themselves on the political and economic periphery of Europe.
The paper was originally published by the Think Visegrad Network.

Issues of labour mobility and labour markets have been among the most contentious discussions on the crowded EU agenda of the past couple years. Proposals calling for reform of the regulations on posted workers and for the enhancement of social rights, advocated primarily by Western countries - including most notably France - and the EU Commission, have been accompanied by both domestic and EU-wide squabbling. Visegrad countries (the Czech Republic, Hungary, Poland, and Slovakia) have often found themselves on the defensive, seeking at once to both fend off accusations of “social dumping” and foil the undesired reforms. They fear that some of the proposals on labour reform fail to coincide with their economic interests and the principle of the free market, or perceive them as an encroachment of the EU Commission on national competencies.

The fact that these reforms have featured prominently on national and European political agendas does however not make their debate the one with the greatest potential economic impact. The envisioned reform of the Eurozone, fiscal rules, investment packages, the Brexit deal, and discussion on the next Multiannual Financial Framework (MFF) are all likely to have more significant consequences for the economic performance of the entire EU and of individual countries than the labour market reforms.

Nonetheless, although the reform of the rules on posting and transport and the proposal enhancing the social dimension of the EU are, in their current formulation, neither fundamental nor detrimental to the economic performance of the EU or individual countries, they are reflective of broader trends and of the future that many fear is to follow. As part of a broader economic reform package, they run parallel to deeper uncertainties about the future of Central European economies and their position in the EU. Furthermore, the political symbolism of the debate on posted workers and social rights has been perceived – often diametrically – differently in various parts of Europe, keeping these issues in the media and political spotlight.

This paper aims to explain economic concerns behind the Visegrad countries’ positioning on the ongoing labour market reforms in the EU, and recommends steps to be taken at the EU and national level to avert the type of future that they fear – the shattering of the current economic model without a viable substitute and a slipping away of CEE countries to the political and economic periphery of Europe...

You can read the full text of the paper Labour market reform and Visegrad countries: Deep rooted concerns and how to address them here.