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EU pressure to liberalise the road transport industry

| Text: Kerstin Ahlberg, editor EU & Arbetsrätt

Both Denmark and Finland will have to face the EU Court of Justice if they fail to change rules which they have implemented to prevent social dumping through the abuse of the EU’s so-called cabotage rules, says the European Commission. It is stepping up its work to liberalise the market for road freight transport.

As a rule, transporting goods by road within one country is the privilege of that country’s own haulage firms. But there are plenty of foreign trucks on the roads providing international transport, and when drivers have unloaded their foreign cargo they are allowed to take on some inland transport jobs on their way home – so-called cabotage. The thinking behind this is to avoid trucks driving empty on their return after an international transport job. Thus they are supposed to return to their country of origin and not come back until they next have an international transport job.

This system is covered by an EU regulation that is immediately binding for all member states. The regulation allows for up to three cabotage transports within seven days after the unloading of the international transport. But trade unions and employers’ organisations in many member states experience that the rules are being exploited by foreign haulage firms operating more or less permanently in their territories, and compete with considerably lower wages than the ones domestic haulage firms are bound to pay their drivers. This is also the case in the Nordic countries.

As a result, in its 20 September draft budget the Swedish government will propose to allocate an extra 25 million kronor (€2.6m) to the police to make them able to act against cabotage which is in breach of the EU regulation. Denmark and Finland have gone further. They have introduced special statutes which complement the regulation to make it harder to circumvent.

But the European Commission argues that it is not allowed to introduce other restrictions than the ones which EU law has provided. As a result, this summer it decided to take Denmark and Finland to the EU Court of Justice if they failed to change their legislation.

Finland is already preparing to make the change this autumn, in which case the Commission promises to retract its decision. In early September, Denmark’s Minister of Transport and Building Hans Christian Schmidt underlined in a meeting with the Commissioner responsible, Violeta Bluc, the importance of finding common European solutions to the challenges facing the road transport industry when it comes to unfair competition. Failing that, more countries will be introducing their own rules which will be an obstacle to a well-functioning internal market, he explained.

The Commission would like to further liberalise the market for road transport, and the attack on Finland and Denmark is part of a larger offensive. It has also taken the first steps towards taking France and Germany to the EU Court of Justice. Their way of trying to stop social dumping in the road transport sector is to demand that foreign haulage firms pay their drivers German or French minimum wages as soon as they enter German or French territory.

The Commission argues that making such demands on international transports having only a marginal link to the country’s territory is a disproportionate restriction which prevents the internal market from functioning properly. However, in a press release it says it will take initiatives that will contribute to more clarity and better enforcement of the rules applicable to employment contracts in the road transport sector.

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