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The Visegrad four: different perspective on Social Europe
Since 1993, Poland, Hungary, the Czech Republic and Slovakia have cooperated under the umbrella of the ‘Visegrad four’, named after a famous castle in Hungary where their cooperation started. This format was instrumental in representing the interests of these former communist countries during the process of accession to the EU. After having joined the EU in 2004, the four countries operated on a more individual base, dealing directly with the Brussels institutions. Lately, the Visegrad four have started manifesting themselves as a political coalition again. On a number of important issues these Central European countries do not agree with the majority of – mainly – the older member states.
Although it recently expressed that its interests coincide with the Eurozone, Slovakia to a varying degree fear to become marginalised if some of the proposed reforms of the Eurozone are being realised, such as a Eurozone fiscal capacity to finance, for example, a European unemployment scheme non-Eurozone countries would not benefit from. The Visegrad four are in general very hesitant to support multi-speed arrangements that are not open to all member states. They instead demand changes that strengthen the role of the member states and their national parliaments, and want to weaken the European Commission.
Another controversial issue is the refusal of the Visegrad four to participate in EU quota schemes to house refugees from Syria and other war zones. This is being interpreted by other member states as a lack of solidarity and a signal that the four do not take European values seriously. These member states also point at the xenophobic attitudes and criticize the undemocratic and unconstitutional behaviour of the Polish and Hungarian regimes in particular. It has been suggested to reduce the financial support to these countries in order to force them to change their behaviour. All four Visegrad countries receive substantial amounts of money from the cohesion funds, symbolising the financial solidarity between the richer and poorer member states. Together the Visegrad four constitute the core of the lobby to maintain this funding as it is under future budget arrangements.
Social Europe: catching up with the West
The four are not entirely in the same position since their transitions after 1989 were not the same, having different social traditions and one of them (Slovakia) being already part of the Eurozone. But on EU-scale, all four have less money to spend on social protection: between 18% and 20% of GDP in 2014 (the EU average being 28.7%).
Although differences have been reduced since joining the EU, the four are also keen on closing the still considerable income gaps between them and most of the older member states. If one takes a look at the PPP (Purchasing Power Parity) of the EU Member States in 2016 and puts the average at 100, a country such as The Netherlands scored 128, as compared to low scores for the Visegrad four, i.e. Hungary (67), Slovakia (77), Poland (69) and the Czech Republic (88). On the other hand, social inequality seems to be lower than elsewhere in the EU when one looks at the percentage of people that are at risk of poverty and social exclusion: with the exception of Hungary they are all below the 23.7% EU average in 2015.
Although the Visegrad four have incorporated the social policies of the EU and have distanced themselves from the complete ‘laissez faire’ of the first years following the collapse of communism, they cannot afford the kind of welfare state of the Northwestern Europeans. They had to opt for a different business model to become and remain competitive in the open EU market based on low taxes and low wages. It allows them to exploit the four freedoms – and in particular the one concerning the movement of labour – to their advantage. Either companies from the countries with higher labour costs relocate to them, or their workers are posted in the richer member states undercutting the local labour force because they are allowed to pay (much lower) social security premiums in their countries of origin.
A minimal ‘Social Europe’ is preferred
This model has come under attack, and the European Commission has proposed to change the posting of workers directive as well as to limit the period in which social security contributions are allowed to be made at home. The Visegrad four have protested vehemently against this plan, indicating it violates the freedom of movement of workers within the EU. They complain Brussels, with support of the richer member states, is trying to undermine their main competitive edge.
Moreover, their governments consider social security arrangements, such as pensions or social benefits, to be a purely national responsibility. Although so far there have not been any official reactions to the reflection paper on the social dimension of the EU published by the European Commission earlier this year, one can imagine that of the three scenario’s outlined in that paper the minimal one, with at its core the free movement of labour, will be the most popular one and not the scenario of developing a more substantial Social Europe that entails social harmonisation in the Eurozone alone nor of intensifying the cooperation in this area with all 27 member states.
Isolation in a European supermarket?
A fierce battle is expected in the near future. For the new French president Macron restoring the principle of ‘the same salary for the same work at the same place’ is a priority and “a key to reconciling European people with the European project”. In June, Macron proposed more far-reaching measures regarding posted workers (including a limit of 12 months) as compared to the Commission’s proposal (24 months), jeopardising a potential compromise between member states. Macron wants a Europe that protects the lower middle classes, and he has openly accused the Central and Eastern European countries of treating the EU as a supermarket and an important source of income without respecting important European values.
The Visegrad four – with the help of some like-minded countries – want to uphold and even block the proposed adaptation of the Posting of Workers directive. But that could add fuel to already existing resentments elsewhere in the EU and to a further isolation of the four. Would that really be in their interests? The Visegrad four would run the risk of being not at the table but on the menu, to quote the Bulgarian publicist Ivan Krastev.