Intra-EU Posting: Costs and Benefits

Although intra-EU posting is a marginal phenomenon in total EU employment, it takes on a substantial part in certain countries and labour-intensive sectors of activity. In the current public and political debate, intra-EU posting is often linked to ‘social dumping’, fraud and the displacement of domestic jobs. This prevailing negative perception is illustrated by an urgent call for change, especially coming from countries that are confronted with high numbers of posted workers. At the same time, in spite of a sharp focus on the negative consequences of intra-EU posting, a more nuanced debate on the impact of the practice is more than welcome. The benefits of intra-EU posting from the perspective of the country of origin (such as tempering the negative effects when countries are confronted by an economic crisis) as well as that of the host country (in response to labour shortages) are hardly ever cited. Moreover, there are several reasons to favour posting over permanent migration as a stabilisation tool when the country of origin experiences an ‘asymmetric shock’. Emigration erodes the tax base and the number of people left to pay for the government debt. The fact that posted workers pay taxes in their country of origin means that the posting mechanism can potentially increase employment, export, household incomes and labour tax revenues in the country of origin when it experiences an asymmetric shock.