Magdalena Tulibacka
vanessamak
plaumannPolish builders and freedom to provide services: Commission v Germany 546/07
Posted by Magdalena Tulibacka on February 22, 2010
When two worlds collide… ?
German insistence on monitoring the application of its temporary restrictions of Polish building contractors ‘collided’ with the ECJ’s insistence on monitoring freedom to provide services throughout the now enlarged EU. Result? Germany was told in the ECJ’s judgement of 21 January 2010 that its policy of not allowing foreign companies performing contracts in Germany to use Polish contractors breached freedom to provide services.
What was the problem exactly? Polish building contractors tend to be cheap, and Germany is struggling with unemployment. The German government does not allow for contracts using foreign workers to be performed in districts where unemployment is 30% above national average (those are officially listed, updated regularly). Restrictions on Polish workers are mentioned in the Agreement of 31 January 1990 between the Government of the Federal Republic of Germany and the Government of the Republic of Poland on the posting of workers from Polish undertakings to carry out works contracts. The application of the policy is monitored closely. Perhaps in the spirit of this need for close monitoring, Germany also required that companies from other Member States had to establish a subsidiary in Germany if they wished to use Polish contractors to perform contracts in Deutschland. In other words – foreign companies could not use Polish contractors to perform works in Germany. ECJ agreed with the Commission that this was a breach of Article 49 of the EC Treaty on free movement of services. It was not convinced that there was a sufficient enough danger to German public policy or security posed by the potential of foreign companies using Polish contractors.
Who came out victorious here? Poland or Polish builders? – I would not go that far. Companies based in other Member States? More like it. Free movement of services – for certain.
This is yet another, albeit modest, step towards a full integration of the new Member States into the European Union. A frighteningly slow process, but I am full of hope and anticipation…
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