The EU needs to be changed!

Collective agreement We cannot accept an EU where we compete with wages and working conditions. Instead, we must fight to ensure that everyone who works in Sweden is treated equally. This is why we demand that a social progress protocol be incorporated in the EU treaties. A social progress protocol that strengthens member states’ control over the labour market. A social progress protocol that guarantees that Swedish wages and working conditions will apply to all who work in Sweden.

Swedish collective agreements must apply to all who work in the Swedish labour market

The Swedish labour market model is based on collective agreements between trade unions and employers. An important feature in the Swedish model is that the unions can force a collective agreement through union blockade.

In its ruling in the Laval case in 2007 the European Court of Justice laid down that Swedish trade union organisations are not allowed to take industrial action in order to achieve equal treatment of workers from other EU countries.

The ruling put the Swedish model at risk. Equal treatment should apply to all who work in Sweden, according to LO. Swedish collective agreements must apply to all in the Swedish labour market, including those who are posted to Sweden on a temporary basis.

LO’s demand is therefore that a social progress protocol must be introduced in the EU Treaties. A social progress protocol that defines what can be considered as acceptable obstacles to the EU’s free movement of services.

The EU must be based on fundamental human rights

What obstacles to the free movement can be accepted? This is an important question for the EU to decide on. Today it is in the power of the European Court of Justice to define whether an obstacle to free movement can be accepted or not.

The EU Court of Justice is however not a democratically elected institution. The question of which obstacles should be regarded as acceptable is an important redistribution policy issue that politicians cannot leave to lawyers. If we are to regain political and democratic control, the delimitations in the EU treaties must be clearer.

The demand for a social progress protocol means that the EU must first and foremost be based on fundamental human rights. The right to organise in trade unions is a human right. All restrictions on these rights must be justified – and not vice versa. Fundamental rights should not be restricted because a company wishes to compete with lower wages and poor working conditions.

Without the right to strike, the right to collective bargaining is no more than the right to collective begging

The right to form and join trade unions for the protection of one’s interests is part of the UN Universal Declaration of Human Rights of 1948. LO can never accept restrictions of these rights.

The ruling of the European Court of Justice in the Laval case – laying down that the Swedish trade union organisations may not take industrial action – meant an infringement of fundamental human rights. And a breach of the right to organise puts democracy at risk.

LO’s demand on an amendment of the EU treaties is therefore not only about fighting wage dumping and ensuring competition on equal terms. It is also about defending fundamental rights; a fight that is pursued daily in democratic societies worldwide.

To quote the Belgian labour law professor Roger Blanpain: the right to negotiate without the right to take industrial action is just the right to collective begging.

Swedish collective agreements and equal treatment must apply to all

Many people believe that low-wage competition in the EU only affects the construction and transport sectors. Nevertheless, the number of sectors affected by unfair competition is growing.

In 2016 we could read about the temporary work agency Orange that hired out staff to municipalities and county councils in Sweden. The pay for the staff could be as low as SEK 18 per hour and no taxes or social security contributions were paid in Sweden.

The forestry industry is a sector where more than 10 per cent of the workforce are posted workers from other countries. Posting of workers is also common in several other sectors, such as hotels, restaurants and cleaning. In the manufacturing industry there are examples of companies engaging Polish workers as “self-employed” with a remuneration of SEK 70 000 per year.

LO demands that Swedish collective agreements and equal treatment must apply to everyone who works in Sweden, even those who are posted to Sweden on a temporary basis.

LO proposes a social progress protocol to be incorporated in the EU treaties, in order to ensure that Swedish wages and working conditions apply to all who work in Sweden. Moreover, we need to change both the Swedish legislation and the EU legislation.

The transport sector is extremely vulnerable

Transport companies that pay wages according to collective agreements and do not commit tax fraud find it more and more difficult to survive. Many large companies and forwarding agents buy in services for SEK 70 per 10 kilometres – whereas with Swedish wages and working conditions, the double is needed if the business is to be successful.

LO welcomes foreign companies and workers who offer transport services in the Swedish labour market. A condition for this support is however that the competition between foreign and domestic transport companies is sound. Lower wages and poor working conditions for drivers from other countries must not be accepted. If a company conducts road transport in Sweden, the vehicle must be registered and taxes must be paid in Sweden. Swedish wages and working conditions in accordance with collective agreements must apply to the drivers employed.

We know that the consequences of low-wage competition can be grave. There are companies having people working in Sweden for a few thousand Swedish crowns a month and living in the vehicle. A study from Lund University shows that there are many foreign vehicles conducting illegal transports in Sweden.

The situation in the transport market is unsustainable. LO wants a social progress protocol to be incorporated in the EU treaties, in order to ensure that Swedish wages and working conditions apply to everyone who works in Sweden. In addition, the Swedish legislation and the EU legislation need to be changed.

The EU Treaty needs to be changed

To handle the problems that have arisen through the European Court of Justice’s ruling in the Laval case, among others, LO demands that a social progress protocol should be incoporated in the EU treaties. Fundamentally it is a matter of regulating what should be considered acceptable obstacles to the EU’s free movement of services. Our demand is that equal treatment should apply to everyone working in the Swedish labour market, even those who are posted to Sweden temporarily. Such a demand is an obstacle to companies that want to compete with poor wages and working conditions. But this is an obstacle that must be allowed if EU cooperation is to be socially acceptable.

Some of the problems with the EU rules have been made worse through decisions made in the Swedish Parlia-ment, and the current Government is now taking action that will improve our chances of bringing good order in the labour market. The amendments to our Swedish Lex-Laval legislation that have made it possible to take industrial action to force collective agreements with companies posting workers is one example. Some improvements can also be achieved through amendments to EU legislation.

Equal treatment of workers

The ongoing renegotiation of EU legislation that specifically regulates the issue of posted workers could lead, for example, to a situation in which the difference between demands that can be made of a Swedish company and a company that posts workers from another EU country decreases. LO’s affiliates also work daily to ensure equal treatment of workers in the Swedish labour market.

But in the long term the EU treaties must be amended to deal with the conflict between the EU’s economic free-doms and the Member States’ ability to regulate the labour market, for example. Respect for the social partners’ pos-sibility to independently regulate wages and working conditions in collective agreements is also a matter of respect for basic human rights.

The right to form and join trade unions for the protection of one’s interests is part of the UN Universal Declara-tion of Human Rights of 1948. These rights may not be restricted because the EU and its Member States want to increase trade in services in the EU internal market. A restriction on the freedom of organisation is a restriction on democracy.

Fundamentally it is a question of democracy

The EU political institutions have left it to the European Court of Justice to decide on the question of which obstacles to free movement are to be accepted.

We now have a situation in which all measures that actually, potentially, directly or indirectly may hinder free movement must be possible to justify as appropriate and proportional. Ultimately it is the European Court of Justice that determines whether an obstacle is to be accepted or not. That is a position of power that is not acceptable for a non-elected institution.

The question of which obstacles should be regarded as acceptable is an important redistribution policy issue that politics cannot leave to lawyers. If we are to regain political and thus democratic control over which obstacles are regarded as acceptable, the delimitations in the EU treaties must be clearer.

The proposal put forward by LO along with the rest of the European trade union movement is the social progress protocol.

Fundamental rights should not be restricted

Our proposed social progress protocol does not mean a ban on all restrictions on the right to strike. What we propose is that the EU, just as all other functioning legal systems, must be based on fundamental human rights and that all restrictions on these rights must be justified. Fundamental rights should not be restricted because a company wishes to compete with wages and working conditions.

The demand for a social progress protocol is a priority for LO, but the conflict between the EU’s economic free-doms and the Member States’ right of regulation can arise in areas other than the labour market. Which restrictions regarding tax-funded medical care, public housing or the sale of alcohol can be regarded as acceptable obstacles? To prevent the European Court of Justice from limiting policy discretion in more areas it would therefore be reasonable from LO’s perspective to have a broader review of the EU treaties, aimed at creating clearer delimitation of the respec-tive competence of the EU and the Member States.

Several industries are vulnerable

Many people believe that low-wage competition in the EU only affects the construction and transport industries. This is not true. The number of sectors affected by unfair competition is growing. In 2016 we could read about the staff agency Orange that hired out staff to municipalities and county councils in Sweden. The pay for their employees could be as low as SEK 18 per hour and no taxes or social security contributions were paid in Sweden.

The proportion of posted workers in the forestry industry is relatively high, at more than 10 per cent of the labour force. The examples of abuse are many. One example is the company Baltic Trio, which in 2012–2013 had almost all its operations in Sweden and performed forest clearing for a large Swedish customer. The wages paid were half the minimum wage in the collective agreement. Taxes and contributions were probably not paid either in Sweden or in Estonia, but when the Swedish tax authority performed an audit the Estonian authorities issued retroactive attesting documents.

Thousands of foreign vehicles conducting illegal transport services

In the private service sector the problem is constantly present in several industries, such as hotels, restaurants and cleaning. One example is the Bulgarian company FIN which cleaned at Piteå Havsbad resort and itself reported payroll expenses to the tax authorities for 2013 equivalent to SEK 18 per hour. Nor is the manufacturing industry immune. There are examples of companies engaging Polish workers as “self-employed” for remuneration of SEK 70 000 per year.

An industry often used to exemplify the problem of competing with wage and working conditions in the EU is the road transport market. It is a telling example when EU regulations, as they are today, contribute to unfair competition and social dumping in the European transport market on a scale that is impossible to ignore. Companies bus drivers to Sweden, where they work for months at a time for a few thousand a month while living in the vehicle.

A study from Lund University shows that every day there are thousands of foreign vehicles in Sweden conducting illegal transport services. There are several reasons for this situation and, apart from an amendment to the EU treaties, the solution must be a change in both Swedish and European legislation.

This is by no means a comprehensive review of the extent of the problem, but rather an attempt to briefly illustrate how the problem is spreading.

How LO is working on the question

Achieving an amendment to the EU treaties is a long-term project that LO has pursued ever since the ruling in the Laval case in 2007. The proposal for a social progress protocol was prepared by the European trade union movement after the Laval case and a number of similar legal cases in the European Court of Justice. The proposal aims to prevent competition with wages and working conditions by ensuring that fundamental trade union rights and freedoms take priority over the economic freedoms of the EU internal market.

The trade union proposal for a social progress protocol was also part of the final negotiations ahead of the second Irish referendum on the Lisbon Treaty in 2009. However, at the decisive summit meeting, the British government imposed an absolute requirement that the protocol be removed. Thus we were a hair’s breadth from a social progress protocol in the EU in 2009.

LO and the Socialdemocrats together

Three years later, in 2012, the LO Congress decided that LO should intensify its work on the question. As a direct consequence of the decision, a joint working group was set up, with representatives from LO and the Swedish Social Democratic Party, to try and find a common approach in future amendments to the EU treaties.

An agreement was presented at the end of 2013. The conclusion was that in future EU treaty amendments, the support of the Swedish labour movement would be conditional on the introduction of a social progress protocol.

This was followed up after the 2014 parliamentary election, when Prime Minister Stefan Löfven affirmed in the Statement of Government Policy that “equal pay for equal work in accordance with laws and agreements in the coun-try of work is a principle that must apply throughout Europe. The Government will initiate efforts to bring about a change to the EU treaties, establishing that the free movement of companies cannot be used to circumvent national laws and collective agreements.”

Sweden, Germany and Austria

The next step in the process was to try and broaden the work and seek support from political parties in other Member States. Consequently, LO, together with the Social Democratic Party, took the initiative for a joint effort with the social democratic parties in Germany and Austria and the trade union confederations DGB and ÖGB.

In September 2015 the leaders of the organisations met in Vienna to adopt a joint agreement. In the agreement, the six organisations establish that they are to work together to strengthen trade union rights in the EU treaties as soon as possible. This must be through the addition of a social progress protocol to the treaties. Whether such a protocol is included in a coming amendment to the treaties should also be a decisive criterion, when the parties included in the agreement decide if they are to support the amendment in their respective national parliaments.

Get a majority to join the agreement

The next step in the work is to get more political leaders to join the agreement. The ambition of the LO Executive Council is to announce during the Congress period that political parties from a majority of the EU Member States have joined the agreement. In the opinion of LO, this would make it impossible to ignore the issue in future amend-ments to the treaties.

Representatives of some Swedish parties have stated that they are against a social progress protocol since it would give the EU “decision-making authority over the Swedish collective agreement model”. This is quite simply not true. On the contrary, our demand for a social progress protocol is to ensure national autonomy over the labour market, by strengthening the social partners’ ability to independently regulate conditions in the labour market.

When will the EU treaties be amended?

It is impossible to say for certain when the next amendment to the EU treaties will be. One assessment based on the information available today, is that the next amendment to the treaties will probably be to enable consolidation of the Economic and Monetary Union. In June 2015 the chairs of the European Council, the European Commission, the European Parliament, the Eurogroup and the ECB presented a joint report on the future of the EMU, which proposes changes to the treaties in the period 2017-2025. The LO Executive Council will not accept such an amendment with-out a social progress protocol. In addition, in April 2017 the European Commission presented a White Paper on the future of the EU. The purpose is to initiate a discussion that will result in concrete reform proposals before the election to the European Parliament in 2019. In view of this, LO will continue its advocacy work for a social progress protocol.

Agreements with Germany and Austria

Agreement for a social progress protocol

At a meeting in Vienna in September 2015, the leaders of the social democratic parties of Germany, Austria and Sweden, jointly with the leaders of the trade union confederations LO, DGB and ÖGB, adopted this agreement on joint action to strengthen trade union rights in the EU as soon as possible.

Pact for social progress

The success of Sweden’s economic model is based on strong trade union organisations that safeguard wage-earners’ interests. We cannot accept a competition with lower wages and less advantageous working conditions – neither in Sweden, nor in the EU. LO and the social democrats therefore demand the introduction of a social progress protocol in the EU Treaty, to ensure better balance between economic freedoms and workers’ fundamental rights in the EU internal market. LO and the social democrats, together with our equivalents in Germany and Austria, have agreed on a ten-point programme with the aim of influencing the EU.

EU and low wage competition

The Member States have empowered the EU to create a common market with free movement of goods, services, capital and people. At the same time, the Member States have essentially retained control over what constitutes the core of national democracy. It is still States that tax, redistribute and regulate the labour market; in addition in Sweden it is the social partners that are responsible for wage formation.

National regulation often constitutes an obstacle to free movement. This has created an ever present conflict about what should take precedence. About which national laws and rules should be regarded as acceptable obstacles to free movement.

For trade union organisations, this is about the right to constitute an obstacle. Trade union demands for collective agreements and equal treatment are an obstacle to companies that want to compete with low wages and poor working conditions. That is the purpose of a trade union. The question is whether this should be an acceptable obstacle in the EU internal market or not? The question of which obstacles are to be considered acceptable is the fundamental political conflict of the EU project. This is not just a matter of labour market regulation. The tension is also present in principle in other political areas, such as tax-funded healthcare, rent controls and the sale of alcohol.

Today it is ultimately the European Court of Justice that determines whether an obstacle is to be regarded as ac-ceptable or not. It was this review that the Swedish trade union movement lost in the Laval case when the European Court of Justice found that demanding equal treatment was an unacceptable obstacle to the free movement of services.

The Swedish labour market

The Swedish labour market model is based on collective agreements between trade unions and employers. It is a successful model. Collective agreements regulate conditions for pay, working hours, holidays and overtime. The agreements also in-clude important insurance schemes that supplement the national pension and provide extra cover for occupational injury, illness and unemployment, for example.

The collective agreements provide security for workers. The agreement is binding on the employer, who cannot threaten an employee with lower pay or poorer conditions. The collective agreements create stability for employers. There is an obligation to keep industrial peace during the period of the agreement and the parties in a sector or industry can negotiate practical solutions to specific problems for that particular industry. Collective agreements contribute to Sweden being one of the countries in Europe that has the least number of days of industrial conflict.

Collective agreements are good for the economy. Through central, nationwide collective agreements the trade union movement takes responsibility for growth and jobs. If the Swedish labour market model with collective agree-ments is to work, lower wages and poorer conditions of employment cannot be an instrument of competition in the labour market. An important part of the Swedish model is therefore that trade unions are to be able to force collective agreements and ensure competitive neutrality.

The Laval case

In 2004, when the Latvian company Laval was engaged to renovate school premises in Vaxholm, the company refused to sign a collective agreement, on the grounds that it already had an agreement with the Latvian trade union. The conditions in the Latvian agreement were, however, clearly worse than those that apply to employees in Sweden. The Latvian building workers received about SEK 35 per hour, in some cases even less.

Since the Building Workers’ Union, together with the entire Swedish Trade Union Confederation, consider that employees who work in Sweden should receive the same wages and working conditions, regardless of whether they are employed by a Swedish or a foreign company, or of whether they are in Sweden temporarily or permanently, they blockaded the work.

Laval brought an action against the Building Workers’ Union before the Swedish Labour Court. The Labour Court had no objections to the Building Workers’ Union blockade, but found that the measure was in compliance with Swedish legislation. The European Court of Justice, however, found that Swedish legislation in this area was not compatible with EU law and the Labour Court therefore decided that the trade unions should pay damages. This was despite the fact that the Building Workers’ Union had complied with Swedish law.

The EU ruling meant a serious obstacle to equal treatment of workers in the Swedish labour market. The European Court of Justice restricted the number of conditions that may be imposed and the level of these conditions was limited to the absolute minimum in the country of work. For example, as regards wages, this gives a clear competitive advantage to the foreign company, as the lowest wages in many collective agreements are considerably lower than the normal wage in the industry.

After the ruling in the Laval case, trade union organisations may continue to demand more favourable conditions to achieve equal treatment, but we may not take industrial action to push through these demands. This is unacceptable. Ultimately, the right of negotiation without the right to take industrial action is just a right to collective begging.

The ETUC proposal for a social progress protocol

Brussels, 18/03/2008

Protocol on the relation between economic freedoms and fundamental social rights in the light of social progress

THE HIGH CONTRACTING PARTIES,

HAVING REGARD to Article 3(3) of the Treaty on the European Union,

CONFIRMING their attachment to fundamental social rights as defined in the European Social Charter signed at Turin on 18 October 1961 and in the 1989 Community Charter of the Fundamental Social Rights of Workers,

RECALLING that the Union shall work for a highly competitive social market economy, aiming at full employment and social progress, (Article 3(3) sub par. 1 of the TEU)

RECALLING that the single market is a fundamental aspect of Union construction but that it is not an end in itself, as it should be used to serve the welfare of all, in accordance with the tradition of social progress established in the history of Europe;

WHEREAS, in accordance with Article 6(1) of the Treaty on the European Union, the Union recognises the rights, freedoms and principles set out in the Charter of Fundamental Rights and in particular the fundamental social rights enshrined in this Charter,

BEARING IN MIND that, according to Article 9 (new horizontal social clause)
of the Treaty on the Functioning of the EU, in defining and implementing its policies and activities, the Union shall take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and protection of human health,

HAVING IN MIND that the Union and the Member States shall have as their objectives the improved living and working conditions, so as to make possible their harmonisation while the improvement is being maintained (Article 136 (1) EC Treaty = Article 151(1) TF EU),

RECALLING that the Union recognises and promotes the role of social partners, taking into account the diversity of national systems, and will facilitate dialogue between the social partners, respecting their autonomy (Article 136a new = Article 152 TF EU),

WISHING to emphasise the fundamental importance of social progress for obtaining and keeping the support of European citizens and workers for the European project,

DESIRING to lay down more precise provisions on the principle of social progress and its application;

HAVE AGREED UPON the following provisions, which shall be annexed to the Treaty on the European Union and to the Treaty on the Functioning of the European Union:

Article 1 [Principles]

The European social model is characterised by the indissoluble link between economic performance and social progress, in which a highly competitive social market economy is not an end in itself, but should be used to serve the welfare of all, in accordance with the tradition of social progress rooted in the history of Europe and confirmed in the Treaties.

Article 2 [Definition of social progress and its application]

Social progress and its application means in particular:

The Union

improves the living and working conditions of its population as well as any other social condition,

ensures the effective exercise of the fundamental social rights and principles, and in particular the right to negotiate, conclude and enforce collective agreements and to take collective action,

in particular protects workers by recognizing the right of workers and trade unions to strive for the protection of existing standards as well as for the improvement of the living and working conditions of workers in the Union also beyond existing (minimum) standards, in particular to fight unfair competition on wages and working conditions, and to demand equal treatment of workers regardless of nationality or any other ground,

ensures that improvements are being maintained, and avoids any regression in respect of its already existing secondary legislation.

The Member States, and/or the Social Partners,

are not prevented from maintaining or introducing more stringent protective measures compatible with the Treaties,

when implementing Union secondary legislation, avoid any regression in respect of their national law, without prejudice to the right of Member States to develop, in the light of changing circumstances, different legislative, regulatory or contractual provisions that respect Union law and the aim of social progress.

Article 3 [The relation between fundamental rights and economic freedoms]

Nothing in the Treaties, and in particular neither economic freedoms nor competition rules shall have priority over fundamental social rights and social progress as defined in Article 2. In case of conflict fundamental social rights shall take precedence.

Economic freedoms cannot be interpreted as granting undertakings the right to exercise them for the purpose or with the effect of evading or circumventing national social and employment laws and practices or for social dumping.

Economic freedoms, as established in the Treaties, shall be interpreted in such a way as not infringing upon the exercise of fundamental social rights as recognised in the Member States and by Union law, including the right to negotiate, conclude and enforce collective agreements and to take collective action, and as not infringing upon the autonomy of social partners when exercising these fundamental rights in pursuit of social interests and the protection of workers.

Article 4 [Competences]

To the end of ensuring social progress, the Union shall, if necessary, take action under the provisions of the Treaties, including under (Article 308 EC Treaty=)
Article 352 of the Treaty on the Functioning of the European Union.

(See a similar provision in the Protocol on the internal market and competition)

Reports

Democracy as an obstacle for free movement within the EU

This report – through a combination of studying the literature and examining current political and legal decisions within the EU – will endeavour to describe the mechanisms of the EU’s constitutional structure that support a development in which the EU’s deregulation agenda restricts national scope of action in an increasing number of areas.

The report Democracy as an obstacle for free movement within the EU (pdf)

For a Social Europe - introduce a social protocol in the EU Treaty

This report was drawn up by a working group consisting of representatives of the Swedish Trade Union Confederation (LO) and the Swedish Social Democratic Party. It is mainly concerned with how the European Union’s social dimension can be strengthened, in particular through the introduction of a social protocol in the EU treaties. The working group proposes a basic approach that should guide the labour movement’s action in connection to future changes of the EU treaties.

The report For a Social Europe - introduce a social protocol in the EU Treaty (pdf)

When labour costs squeeze the price

This report analyses three large infrastructure projects in Sweden where the purchasers are the National Rail Administration and the Swedish Road Administration. The National Rail Administration and the Swedish Road Administration have actively and consciously worked to hold down costs of infrastructure projects. This means that main contractors who hire sub-contractors with a large percentage of foreign workers, are awarded a large proportion of the public procurement contracts. The foreign labour comes largely from Poland via Polish or Irish staff agencies. Labour is supplied at a low price and as a consequence the sub-contractors can offer a cheap price.

The report When labour costs squeeze the price (pdf)

Guest in reality - About posted workers in practice

In this report we have tried to give a qualified picture of the incidence of posting of foreign workers in the LO (Swedish Trade Union Confederation) affiliates' industries. The report shows that in construction posted workers make up almost 19 per cent of the total workforce and in forestry about 11 per cent. In other industries the percentage of posted workers is more modest.

The report Guest in reality - About posted workers in practice (pdf)

Beyond dreams and belief

Based on a number of real-life cases the report illustrates some of the most important mechanisms that contribute to dirty competition,i.e. competition with lower wages and worse working conditions, in the Swedish labour market. The circumstances and in many cases tragic human destinies described in the report are not unique to Sweden. Throughout Europe, in the EU internal market, various methods of exploiting the differences in pay and terms of employment have emerged.

The report Beyond dreams and belief (pdf)

An EU where we compete with wages and working conditions has no future

Swedish wages and working conditions must apply in Sweden. This is not the case today. To change this, the EU itself must change, both in terms of legislation and treaties. Consequently, the Swedish Trade Union Confederation (LO) is demanding that a social progress protocol should be incorporated in the EU treaties, establishing that fundamental trade union rights and freedoms are not subsidiary to the economic freedoms on the EU internal market. And in the event of a conflict, fundamental human and trade union rights shall have priority.

There is a consensus today that the EU is facing major challenges. There are several challenges: the euro crisis, the refugee situation and the decision by the United Kingdom to leave the EU. Leading representatives are now open about the EU being in a crisis. And the future structure of the EU is now being discussed.

The European Union is important for Sweden. We need an EU that safeguards democracy and human rights in working life, both within and outside the EU. The goal of European trade union cooperation is to strengthen the position of workers in an internal market with free movement of capital, labour, goods and services. Otherwise there is a risk of an increasing imbalance between capital and labour, leading to more precarious employment contracts and downward pressure on wages.

The fact that LO is fundamentally positive towards the EU does not mean that we unreservedly accept the Union regardless of its structure. The regulation of the EU internal market influences which groups in society will gain or lose. If EU regulations facilitate, or in the worst case force, competition with wages and working conditions, the EU has no future. It will lead to the Union being perceived, with good reason, as a threat by large groups in the labour market. This creates attitudes that make it more difficult to handle common challenges, such as the large groups of people forced to flee for their lives to Europe. Ultimately, this will also undermine support for free movement within the EU.

The basic simple fact is that social acceptance of free movement requires regulated labour markets and equal treatment of workers. Otherwise, people will turn against free movement and in the worst case start pointing the finger at mothers and fathers arriving in Sweden to support their families, instead of at the irresponsible and semi-criminal companies that ruthlessly exploit these people. There can be no free movement without equal treatment!

This is also ultimately a question of democracy. LO cannot accept a situation in which judges in the European Court of Justice determine the requirements that trade union organisations can impose on foreign companies.

If we are to overcome the challenges we are facing there must be brave political representatives that are able to acknowledge the mistakes that have been made. Who acknowledge that the one-sided focus of EU cooperation on deregulation and free movement of services has created a gigantic market for companies that exploit people and compete with poor wages and working conditions. And finally, we need politicians who not only acknowledge these problems, but also propose and implement solutions, despite the difficulties. Otherwise, the problems we are facing will not go away. LO is prepared to take its part in changing the EU.