Socially and Full Steam Ahead to the Core of the EU

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Since the great expansion of the EU in 2004, we are constantly hearing concerns about so-called social dumping from hard-core, traditional EU members. What at first seems to be an action against imminent threats to social standards in Western Europe is in fact a sophisticated instrument to eliminate competition from new EU members.

At first the main thread of critique was wrapped around tax-rate differences. One could hear French and German politicians shouting accusations of social dumping when companies were on a crusade to transfer their manufactures to central and eastern Europe on a promise of better business conditions. This time, the attention has shifted from taxes to wages and salary conditions. And we can hear the same crying sounds resonating again: “This is social dumping!”. Day by day we are being continuously confronted with the premise that if somebody wants to do business in our country, they must pay their employees just as much as we do.

It is obvious why we continue to hear such voices. Western European trade unions exert pressure on politicians demanding protection from the influx of our cheaper employees. Foreign companies in the West do exactly the same in order to diminish competition from our companies on their domestic markets.

However, there is no reason for being misled by the rhetoric promoting the elimination of social dumping. If we succumb to such demagoguery, we ultimately accept the point of view it is trying to sell. Bear in mind, this standpoint is solely based on Western political and business interests, which are not in balance with ours. The recent UEFA European under 21 Championship stood witness to this conflict of interests. If Germans and Italians are satisfied with a score of 1:0, then the match is going to stay unchanged even though it is explicitly against our best interests. The lesson here is that specific interests will always play the main role, whether we are talking sports, the economy, or social matters.

The aspiration of a closer integration of economic and social systems in the EU – and especially in the Eurozone – stems from a false premise that uniformity and similarity represent the best way forward. Nevertheless, the case of the Eurozone showcased that a single currency, single exchange rate, and single interest rate were all beneficial to such engines as the German economy, but bore devastating consequences for the Greek economy.

In the social arena, we can find a similarly unfounded and even dangerous and toxic thesis: “the same salary for the same work at the same place”. There is no reason why it should be like this. Chasing the core of the EU should not be that reason. On the same note, there is no reason why politicians should be involved in the resolution of these issues. The only way for politicians to directly raise social standards is to get out of politics and become members of boards of directors and boards of supervisors in companies that have the potential to give substance to their ideas.

Compared to the average of the EU, the performance of the Slovak economy is ¾ to that of the standard, while in comparison with the average of the Eurozone the numbers are even lower. It would thus be equal to economic suicide if we were to accept the integration and equalization of social standards even before we economically rise up to or merely get closer to the level of the most developed countries.

In the context of our governmental institutional structure we sorely miss an executive office resembling something like the (governmental) Council for Competitiveness, which would thoroughly analyze all institutional proposals either from the EU or our government, including the potential integration of social systems, strictly based on and according to their possible effect on the level of competitiveness of Slovak companies.

Otherwise Slovakia will have to confront the uncomfortable truth that one day our social system will be 100% integrated with those of the most developed countries, but at the same time we will carry an abundance of empty production halls and industrial parks as a result of the plight of businesses that we will have managed to get rid of by then…

There is a wise Slovak proverb: “Look thrice before you leap”. In this case, it is of explicit importance to follow this useful piece of wisdom.

Translated by Adam Štrauch

Jan Oravec