Sester: Posted workers agreement won't affect Estonia's competitive edge

Sven Sester (IRL).
Sven Sester (IRL). Source: (Siim Lõvi/ERR)

Chairman of the Riigikogu’s Economic Affairs Committee Sven Sester (IRL) finds that the EU’s revised posted workers agreement will mean that Estonia’s economy is less competitive in the future. But Estonia still had a competitive advance over other European countries.

On Monday the council of the EU’s social affairs ministers reached an agreement on a revised version of the union’s so-called Posted Workers Directive. This directive regulates how workers employed in one EU country and temporarily working in another get paid, and what their legal standing is compared to local employees in comparable jobs.

Monday’s agreement broadens the rights of employees, giving them equal rights in terms of pay compared to the locals. Estonia’s employers criticized the revised directive, saying that requiring a much higher income in plenty of cases would increase the cost to businesses and negatively affect the competitiveness of Estonia’s economy.

Sester said that Estonia had been sceptical towards the proposed changes. The current EU council presidency, which meant that Minister of Health and Labour Jevgeni Ossinovski (SDE) needed to work towards a consensus on the council of ministers, had increased the pressure on Estonia to go along with the proposals, as the presiding minister couldn’t simply push his own country’s interests.

“Our competitive advantage in terms of salaries, labor tax, and social benefits have constantly shrunk compared to the rich European countries, but they are still there,” Sester said.

The changes to the directive would mean higher costs for companies in countries with a smaller per-capita GDP sending workers to richer countries, as they would have to spend more on salaries and social benefits there. But while this would affect some companies, the fact that Estonia was one of the Eastern European countries with the highest incomes meant that it would remain competitive compared to countries where salaries were lower, Sester said.

Editor: Dario Cavegn

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