WRITTEN QUESTION No. 824/98 by Esko SEPPÄNEN to the Commission. Charges similar to taxes, double taxation and freedom of movement
Date: 1998-03-11
Institutions: European Parliament, SEPPAENEN
Subjects: Finland, Sweden, double taxation, economic discrimination, health insurance, pension scheme, quasi-fiscal charge, tax harmonisation, tax relief

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 IKEA(cid:146)s suppliers in Romania. One of the facts revealed by the survey was that
IKEA(cid:146)s  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 (cid:145)delocalising(cid:146)
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 (cid:145)social levy on imports(cid:146) 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 (cid:145)rampant capitalism(cid:146).

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).