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Unintended effects of deregulation in the European Union : The case of road freight transport - N. Hilal

Nadia Hilal
Institut d’études politiques de Paris, 27, rue Saint-Guillaume, 75007 Paris, France

Available online 17 September 2008 on <a href=http://dx.doi.org/10.1016/j.soctra.2008.07.002
target=blanck>ScienceDirect
doi:10.1016/j.soctra.2008.07.002

Abstract
Road freight transport (haulage by truck) within the European Union has been totally deregulated and fully open to competition without any quotas or restrictions since July 1, 1998. This has raised problems, namely due to delay in harmonizing the different EU Member States’ tax and labor legislation, roadside check arrangements, and sanctions for companies that violate regulations or the law. Unscrupulous companies have been using this legal vacuum to falsely outsource their activities, intensify the use of subcontracting, and dodge national tax laws and labor and welfare regulations. The result is worsened working conditions in a sector where entry barriers are low. Worker turnover is by definition high in this activity. Truck drivers are semi-skilled and have become interchangeable on the European Union market. They can readily be replaced by drivers from Eastern Europe (Poland, Romania, Bulgaria) who are much less costly in terms of wages and social protection. The spread of these practices has caused concern among labor organizations in Europe. The trucking transport sector is a textbook case for analyzing how the EU is working to counter the unintended effects of deregulation in this sector of the economy.

Keywords : Harmonization ; Outsourcing ; Social dumping ; European road transport ; EU regulations

Article Outline

  • 1. In economic terms, a totally integrated sector
  • 2. The unintended effects of inadequately monitored deregulation
    • 2.1. Spread of subcontracting
    • 2.2. The “Willi Betz phenomenon” or the “Polish truckdriver” threat
    • 2.3. An extreme case : the Kralowetz company
    • 2.4. Increased outsourcing for labor and fiscal motives
  • 3. Labor and social welfare fears
    • 3.1. EU labor organizations’ joint condemnation of social dumping
    • 3.2. The appearance of European “bogeymen”
  • 4. How to enforce Community law ?
    • 4.1. The difficulty of monitoring enforcement of Community regulations
    • 4.2. Delegating regulation enforcement to the profession ?
    • 4.3. The beginning of a solution : facilitating roadside checks
  • References

Sociologie du Travail
Volume 50, Supplement 1, December 2008, Pages e19–e29
Translation by Amy Jacobs