Berlin to crack down on lowwage East European workers

13th April 2005, Comments 0 comments

13 April 2005 , BERLIN - A government crackdown was promised on Wednesday for low-wage Eastern European workers who are circumventing EU labour laws by becoming 'self-employed contractors' in Germany.

13 April 2005

BERLIN - A government crackdown was promised on Wednesday for low-wage Eastern European workers who are circumventing EU labour laws by becoming 'self-employed contractors' in Germany.

Gerd Andres, a deputy economics minister, said after a cabinet meeting that the government planned to better police the labour market and come down hard on "cheats", with heavy fines for labour agents who supply illegal workers.

A government task force was being set up to investigate "bogus firms and bogus contracts", he said, referring to workers who undercut prevailing wages by declaring themselves companies, which are regulated by a different set of laws.

The issue has moved centre-stage in Germany since last year's accession of eight Eastern European members to the European Union.

With his support among blue-collar workers plunging as a key state election nears in late May - and unemployment at a record level - Chancellor Gerhard Schroeder is striving to keep out an influx of eastern workers who are perceived as taking jobs away from Germans.

The free movement of labour is one of the basics of the European Union, but Andres said the government would stick to the letter of EU laws as it tackled the shadow economy.

"We can't allow people to bring in workers from foreign countries in Europe who work for peanuts and drive healthy German companies to ruin," said Schroeder at an election rally in North Rhine-Westphalia state earlier this week.

Schroeder's Social Democrats (SPD), who have ruled North Rhine- Westphalia - Germany's most populous state - for almost four decades are trailing in polls in the run-up to the 22 May vote. The opposition has demanded a crackdown on low-wage immigrants.

Andres said his ministry favoured expanding a rule in place since 1996 requiring construction workers coming to Germany from abroad to be paid at German wage levels.

Although citizens of the eight new EU states in central and eastern Europe are technically barred from working in Germany for a transition period lasting several more years, a number of loopholes have already been found.

Butchers from eastern Europe, for example, declare they are self- employed and thousands have arrived in Germany over the past year to work in slaughterhouses. They are paid EUR 9.50 an hour as opposed to the EUR 25 that German nationals get for the dirty, dangerous work.

With 20,000 German butchers abruptly forced into unemployment the government is under intense pressure to take action.

Schroeder has slammed such labour standards as "work without dignity" and warned the situation threatened to destroy what he termed the EU ideal.

Germany's official unemployment is currently 12.5 percent with 5.2 million people jobless - the highest number since the early 1930s.

But the head of the Federal German Labour Agency last week admitted the real jobless level is far higher and that 6.5 million people are unemployed if those in state-funded make-work projects and those who have stopped looking for work are counted.

German business leaders reject Schroeder's bid to keep out east European workers and warn that maintaining high wages in Germany will lead to hundreds of thousands of job losses by encouraging illegal employment and by forcing companies to move to low-wage east European states.

DPA

Subject: German news

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