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The EU members

Community workers in order to avoid possi-

which workers are exposed. Measurement

ble distortions of competition."45 The EU does

shall be carried out in accordance with Point

with the most

2 of Part A or Point 2 of Part B of the Annex

not offer criteria for determining what a com-

rigid labor mar-

to this Directive, as appropriate."40

petitive distortion is or how it plans to legis-

kets are determin-

late without creating market distortions.

The European Commission started to reg-

However, as other EU statements demon-

ulate employment laws, health and safety in

ing the EU's

strate, the EU's understanding of "competi-

the workplace, and equal opportunities in

social agenda.

tive distortion" has less to do with possible

the early 1970s. In 1989 the Social Charter

market failure than with old-fashioned pro-

was adopted. The principles of the charter

tectionism. As the official website of the EU

were then incorporated into the Maastricht

Commission explains: "The EU has estab-

Treaty in 1992. The aim of those measures is

lished a set of conditions for membership

"the development and full implementation

that new member states must fulfill. They

of minimum social standards for the single

market."41 Thus, many aspects of labor law

include the requirement that each new mem-

ber must implement and enforce EU law,

are being "harmonized" at a European level.

which includes key areas of social policy such

The EU has issued directives in the fields of

as limits on working time, minimum stan-

"collective redundancies (i.e., layoffs), safe-

dards of safety in the workplace, gender

guarding of employment rights in case of

equality and other measures to combat dis-

transfer of undertaking, employer obligation

crimination. Thus the risk of `social dump-

to inform employees of the condition applic-

ing' will be avoided."46

able to the employment contract, guarantee

for the employees in case of insolvency of the

From an economic point of view, it would

employer, posting of workers and organiza-

seem that the CEE economies ought to

tion of working time," and minimum health

derive maximum benefits from lower costs of

and safety standards in the workplace.42

production, not least because their produc-

tivity lags behind that of their western coun-

The EU mandates that the CEECs phase

terparts--something that the EU actually rec-

in a body of such directives, with each phase

ognizes. To stay competitive, in other words,

becoming progressively more restrictive as to

the CEECs need to keep the costs of produc-

the freedom of contract between employer

tion down. The alternative to increasing pro-

and employee and more costly with regard to

ductivity is growing unemployment. And the

enforcement. Although the EU claims to

latter is precisely what the EU laws will lead

wish to "avoid imposing administrative,

to. In countries such as Poland and Slovakia,

financial and legal constraints which would

where 20 percent of the working population

hold back the creation and development of

is unemployed, regulations against the pejo-

small and medium sized undertakings," its

policies are likely to have that effect.43

ratively labeled concept of "social dumping"

contribute not to alleviation but to worsen-

The EU explicitly rejects the possibility of

ing of the workers' lot.

different levels of safety and health protection

Here the East German example is most

of labor within the union. Instead, it asserts the

instructive, for it shows how an artificial

need to harmonize health and safety standards

increase in labor costs proved counterproduc-

irrespective of the different needs of the mem-

tive to East German economic development

ber states. Thus, the EU's founding health and

and led to the perpetuation of high unem-

safety legislation directive rejects the idea of tak-

ployment. In 2000, a decade after German

ing the costs of health and safety regulations

into account in business decisionmaking.44

unification and 2 trillion deutsche marks of

financial transfers later, unemployment in

According to the EU, legislation is neces-

the eastern part of the Federal Republic was

sary "not only to ensure the health and safety

more than twice as high as it was in the west.47

of each worker on an individual basis, but also

to create a minimum basis of protection for all

That is exactly what Kadi Parnits, president of

8