The entry of 10 new eastern countries in the European Union on 1 May 2004 raised several debates in Europe regarding the maintenance of national wage and labour standards in the EU 15. The significant wage differentials between ‘old’ and ‘new’ member states were believed to potentially give rise to important migration flows that individual member states would not be able to control if the rules of the Single Market, and especially freedom of movement, were directly extended to the EU 10. Among ‘old’ member states, many governments were especially afraid that Eastern European workers, once they would have gained access to the Single European Market and its four freedoms, would move massively to more affluent countries and exert great pressure on wages, labour standards and welfare states (Boeri and Brücker 2000; Kvist 2004). This was believed to be possible either through independent migration or through the use of posted workers from low-wage countries (Menz 2005). The fear of the ‘Polish plumber’ raised during the ratification of the European Constitution in France in 2005 mainly revolved around this latter issue.
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- 1.
Ireland, along with the UK and the USA, is traditionally classified among liberal market economies. However, its patterns of economic governance diverge significantly from these countries in the sense that coordinated economic governance (centralized wage bargaining, institutionalized involvement of social partners in policymaking), such as that encountered in other small European states, prevails (Hardiman 2002, 2006).
- 2.
A high-profile example of this issue was the case of Laval, a Latvian company contracted to renovate a school in Sweden. Laval posted its Latvian workers to Sweden and reportedly paid them 40% less than the terms set by the collective agreement for the construction sector in Sweden. Concerned with issues of social dumping, Swedish trade unions prompted Laval to comply with the local terms and conditions of employment laid down in the collective agreement, which was refused by Laval. Following industrial action led by trade unions, the case ended up in the European court of Justice which ruled that Swedish unions had conducted illegal action that distorted competition in the EU, thereby causing concerns with regard to social dumping (EIRO 2008).
- 3.
Whereas GDP pps accounted for 139% and 130% of the EU 25 average in Ireland and Switzerland, respectively, it accounted for 47% and 43% in Poland and Latvia (Eurostat 2005).
- 4.
Besides free movement of workers, the other bilaterals agreements concerned road transport, technical barriers to trade, public procurement markets, agriculture, civil aviation and research. See Dupont and Sciarini (2006).
- 5.
These included the taxation of savings, cooperation on fight against fraud, adhesion to Schengen/Dublin, processed agricultural products, media, education, pensions, environment and statistics. See Afonso and Maggetti (2006).
- 6.
It is also particularly interesting to note that the number of extended collective labour agreement has increased as a result of labour market opening: even in economic sectors in which no extended collective labour agreement existed and in which companies were weakly organized in employer associations, companies have organized in order to make local rules enforceable vis-à-vis foreign companies and protect local standards (Oesch 2007).
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Acknowledgments
The author would like to thank the editors and contributors of this volume, as well as André Mach and Yannis Papadopoulos for their helpful comments on earlier drafts of this chapter. Funding by the Swiss National for Scientific Research is gratefully acknowledged.
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Editors and Affiliations
Appendices
List of Interviews
Switzerland
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1.
Member of Direction Council, Swiss Employers Union, Bern, 11.05.2007;
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2.
Central Secretary, Swiss Federation of Trade Unions, Bern, 03.04.07;
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3.
Former Federal Councillor and Head of Federal Department for Economy, Fribourg, 02.04.07;
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4.
Vice Director of the Swiss Union of Crafts and SMES, Bern, 26.03.07;
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5.
President of Special Commission “Flanking Measures” of National Council, Social Democratic Party, Bern, 20.03.07;
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6.
President, Swiss Trade Union Federation, Bern, 20.03.07;
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7.
Former Head of Sector Labour Relations, State Secretariat for Economics, Neuchatel, 09.03.07;
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MP Council of States, Member of special commission “flanking measures”, Social Democratic Party, Geneva, 01.03.07;
Ireland
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9.
Social Policy Analyst, National Economic and Social Council, Dublin, 17.01.08;
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10.
Secretary General, Department of Enterprise, Trade and Employment, Dublin, 29.01.08;
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11.
Social Affairs Officer, Irish Congress of Trade Unions, Dublin, 25.01.08;
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Director of Industrial Relations and Research Officer (joint interview), Construction Industry Federation, Dublin, 08.02.2008;
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Senior Social Policy Executive, Irish Business and Employers Confederation, Dublin, 28.01.2008;
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Legislation Policy Officer, Irish Congress of Trade Unions, Dublin, 21.01.2008;
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15.
Regional Secretary – Dublin Region, Services, Industrial, Professional & Technical Union (SIPTU), Dublin, 07.02.2008;
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16.
Director of Industrial Relations, Irish Business and Employers Confederation, Dublin, 05.02.2008;
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17.
Director, National Economic and Social Council, Dublin, 18.01.2008.
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Afonso, A. (2009). The Domestic Regulation of Transnational Labour Markets: EU Enlargement and the Politics of Labour Migration in Switzerland and Ireland. In: Bruszt, L., Holzhacker, R. (eds) The Transnationalization of Economies, States, and Civil Societies. Springer, New York, NY. https://doi.org/10.1007/978-0-387-89339-6_4
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