Reviving the 'country of origin' controversy?

27 Feb '08

4 min read

Earlier this month, Danish opposition Social Democrats asked the country's government to seek guarantees on its collective bargaining rights system before the EU's new treaty is ratified.

In Nordic countries, the Luxembourg court's judgements are viewed as undermining the countries' social model, frequently praised as providing a good balance of flexible labour law and security provisions for workers.

"With the Vaxholm case, the EU runs over the union right to place a company in blockade when Eastern workers get too little in their wage bags," Danish centre-left MEP Ole Christensen said a separate meeting in Brussels on Monday.

Swedish Social democrat MEP Jan Andersson questioned the political role of unelected judges in Luxembourg. "The Court takes decisions which have political consequences, but they [the judges] are never held politically accountable."

Reviving the 'country of origin' controversy? Some experts argue that the verdict on Vaxholm case has practically reaffirmed the rejected and most controversial element of the hugely controversial EU service law, held partially responsible for the French rejection of the EU constitution. The law was later strongly watered down.

Its core tenet was the country of origin principle under which firms could provide services in other EU member states under the same pay and social rules as in the country where they are based.

According to Jonas Malmberg, Professor of Law at Uppsala university, the EU court has re-introduced the controversial provision through its Vaxholm judgement by referring to a "principle of minimum protection."

"The host state - the state or the social partners - may not require anything more than the nucleus of mandatory rules," he explained.

Swedish MEP Jan Andersson echoed similar concerns. "If it becomes common that a country can go in and compete with much lower salaries, all hell will break loose," he said, pointing out that the next EU enlargements could bring in countries with even lower salaries than the 2004 newcomers.

But the European Commission dismissed such arguments. EU social policy commissioner Vladimir Spidla said that the verdict on Vaxholm case is "a balanced judgment that fully respects the member states' choice of organisation of industrial relations, including the Nordic social model."

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