A Liberal or a Western Bias of the EU? Explaining (lack of) Cooperation in Third-Country Posting

In the EU, the posting of workers allows employment in host member states to largely follow the rules of the home member state within the freedom of services. As the EU has become economically very heterogeneous after rounds of enlargement, this brings the conflict between capital and labour to the fore as high wages and standards of labour protection in the wealthier member states come under significant pressure. However, to constrain the exploitation of wage differentials in a Union characterised by the four freedoms, where richer member states have multiple means to exploit other elements of these freedoms, amounts to a structural conflict between West and East. In 2019, the reform of the posted workers directive established the principle of ‘same wage in the same place’ to prevent pressure on labour and wage standards. Yet, the posting of third-country nationals via Eastern member states is a growing loophole. Formally, they are posted via their employment in these member states, but the control and implementation of protective rules is even more challenging. This makes it an interesting case to discuss whether the conflict of interest between the economically heterogeneous Western and Eastern member states or whether the liberalising bias of the internal-market regime is more dominant. This paper compares the different cases of Poland and Slovenia, which are major senders of third-country nationals (e.g. from Ukraine or Serbia). Along the lines of these empirical case studies, we analyse the regulation of third-country posting. We then discuss the costs and benefits of cooperation in the EU as well as the question whether the political institutions of the EU are sufficient to handle conflicts of interests that arise from the negative externalities of ever more tightly coupled member state policies.