WRITTEN QUESTION No. 824/98 by Esko SEPPÄNEN to the Commission. Charges similar to taxes, double taxation and freedom of movement
C 354/28 EN Official Journal of the European Communities 19. 11. 98 (98/C 354/58) WRITTEN QUESTION E-0817/98 by Giuseppe Rauti (NI) to the Commission (26 March 1998) Subject: The scandal of low wages in Eastern Europe Will the Commission say whether it appreciates the importance of the action planned by the Norwegian federation of forestry workers (NTIF), namely the boycotting throughout northern Europe of products for IKEA, the Swedish furniture giant, which has branches all over the European Union? The NTIF mobilised (see Le Monde of 25 February 1998, p. 28) following publication in The Sunday Times (22 February 1998) of a survey of the pay and working conditions of IKEAís suppliers in Romania. One of the facts revealed by the survey was that IKEAís 900 employees in Romania are paid FF 2. 25 an hour (the equivalent of about ITL 600) whilst its employees in Sweden are paid over FF 80. This means that a Romanian employee costs IKEA 35 times less than a Swedish (or Norwegian or Finnish or other European) employee. This also explains why IKEA is ádelocalisingí its production, with the resulting job losses. IKEA is nonetheless selling its Romanian-produced goods in Europe at prices which do not reflect this huge cost differential and is making vast profits in the process. In the light of the above, will the Commission say whether it intends to act, or at least take measures against situations of this type? It could, for example, propose a ásocial levy on importsí from third countries where labour costs are lower than in Europe to help tackle the ever greater problems of unemployment created and exacerbated by these practices of árampant capitalismí. Answer given by Mr Van den Broek on behalf of the Commission (28 April 1998) Trade relations between Romania and the Community are governed by the provisions of the Europe Agreement of 1 February 1995 and by the General Agreement on Tariffs and Trade (GATT). Romania is in fact a member of the World Trade Organisation. The provisions in question do not permit a compensatory social levy on imports from Romania. Generally speaking, the fact that wage levels in the partner country are different from those in the Community is in no way grounds for protectionist measures. On the contrary, the development of trade and the interpenetration of our economies through direct investment helps economic development on both sides. This is particularly welcome with Romania, an applicant country which is preparing to face the challenges of accession and integration into the Community market and which the Community supports in that endeavour. (98/C 354/59) WRITTEN QUESTION P-0824/98 by Esko Seppa¤nen (GUE/NGL) to the Commission (11 March 1998) Subject: Charges similar to taxes, double taxation and freedom of movement In its reply to my oral question H-0045/98 (1), the Commission requested further information about the charges similar to taxes which do not fall within the scope of the agreement for the avoidance of double taxation. In Finland in 1998, health insurance contributions are being levied as follows: on all earned income, 1. 5%; on pensions an additional 2. 7%; on earned income in excess of FIM 80 000, 1. 95%. The maximum rate of these contributions is 6. 05%. They are not taken into account as deductions from pensions received from Sweden. Together with Esko-Juhani Tennila¤, Member of the Finnish Parliament, I have sent a letter to the Commission drawing attention to the way in which this problem hampers the free movement of persons. Will the Commission deal with this matter and take measures to eliminate the de facto obstacle to freedom of movement which exists here? (1) Debates of the European Parliament (February 1998)