'Social dumping' takes centre stage in French minds

France: Social dumping - outsourcing to central and eastern Europe, and the influx of east European workers to France - has …

France: Social dumping - outsourcing to central and eastern Europe, and the influx of east European workers to France - has become the most emotional issue of the campaign for the European constitutional treaty referendum.

A recent poll showed that 55 per cent of salaried French people believe the European Union threatens their social rights; 53 per cent think their salaries are in danger; and 51 per cent fear for job security.

In much the same way that petty crime by young immigrants dominated the 2002 presidential campaign - and swung the vote rightward - French fears of competition from cheap east European labour have been exploited by the No campaign.

Every day brings its harvest of economic horror stories. The fact that the majority of abuses are illegal under French and European law does not faze critics of the treaty.

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Yesterday Libération newspaper reported that an internet company is offering French employees who now earn up to €3,500 per month a maximum €500 to work in Yerevan, Armenia. Earlier in the campaign an Alsatian company caused outrage by telling workers they'd have to move to Romania for €110 a month to keep their jobs.

A Portuguese sub-contractor to France Télécom forced Portuguese labourers to work 14 hours a day, six days a week. The abuses took place while Thierry Breton, minister of the economy and finance since March, was chairman of France Télécom.

In Burgundy, a town whose mayor is campaigning against the treaty with the socialist No 2, Laurent Fabius, was discovered to have hired a Czech contractor to refurbish municipal buildings.

The Irish Ferries incident in which passengers were prevented from disembarking in Cherbourg was interpreted by Libération as another symptom of social dumping.

Michel Oury of the CFDT trade union said management tried to replace Irish employees with Poles and Lithuanians. "Irish sailors cost €15 per hour, whereas sailors from the east cost €4.50," Mr Oury explained.

François Gaxotte, the head of a small construction company in the Paris region, estimates that in the past five years east Europeans have filled 40 per cent of the demand for unqualified labourers, underselling north African Arabs by working for as little as €40 per day.

The problem, Mr Gaxotte says, is not east Europeans; he's happy for them to work in France, under the same conditions enjoyed by French workers. But the prevalence of black market labour in the construction industry means they're easily exploited.

"East Europeans take work from French companies because they use illegal labour and drive the prices down," he says. "I sell a day's work for €300; they sell it for €50. You can't find French workers, and if you do, they want €1,500 a month, which clients won't pay for."

The solution, Mr Gaxotte says, is for the French government to reduce social charges so that builders can afford to hire workers legally.

Pierre Caquet, a French investment banker based in Prague, admits that there is "a huge move east" by French and other companies, but says it is "not so much rebasing as expansion".

It is "just cheap populism to blame immigrants and outsourcing for unemployment", he continues.

"Growth in central and eastern Europe is much higher than in western Europe. The EU should be thankful it's got that . . . These are markets. They're outlets for a lot of goods. They contribute jobs; they don't destroy jobs."

Mr Caquet believes the roots of chronic 10 per cent unemployment lie within the French system.

Former French president and architect of the constitutional treaty Valéry Giscard d'Estaing believes outsourcing will taper off as salaries and social protection rise in the new member countries. The euro group will impose higher standards for those who want to join the single currency, he predicts.

Mr Fabius, the arch-opponent of the treaty, visited a car parts factory in Normandy this week to canvass workers who are anxious at the arrival of Polish trainees.

The solution, Mr Fabius told them, is a constitution that would impose high social standards on all members, and tax harmonisation.

"We can't keep a 30 per cent corporate tax in France when it's 5 per cent elsewhere," he said.