Undeclared work: EU Member States must join forces

11 Sep 2014
Ref: 51/2014

Worth EUR 2.1 trillion, according to some estimates[1], and possibly involving many Europeans: undeclared work has risen with the crisis in Europe. There is an urgent need to combat this phenomenon, which puts both workers and businesses at risk, says the EESC. In its new opinion, the EESC pushes for the launch of an ambitious platform which should have the power to recommend new or simplified EU and national legislation.

"We need to create a positive environment for workers and businesses, so there is less of a temptation to turn to the black market", says Mr Stefano Palmieri, EESC rapporteur. "Undeclared work undermines the European ideals of justice and solidarity, as well as undistorted market competition, so we need to put an end to it. The creation of the European platform comes at the right time but we need to give it the necessary means of action."

A range of instruments could indeed be put in place to fight undeclared work in Europe, such as tax incentives, inspections and fines to combat unfair business practices, as well as smart regulation that can create a stable legal framework, the EESC argues. Sharing information can also be very useful when it comes to preventing and deterring moonlighting: the platform would ideally play an intermediary role to facilitate this exchange.

"For the platform to be rightly steered, we will need constant dialogue between all the players involved: from the social partners at EU level and from sectors with high levels of undeclared work, from SME organisations and the social economy", underlines Ms Ana Bontea, EESC co-rapporteur.

The EESC calls on the new Commission to involve the social partners and civil society organisations with the relevant expertise in the platform. They would bring the necessary added-value, know-how and transparency.

At the plenary meeting, which saw the adoption of the opinion, the Italian State Secretary for Labour and Social Policy, Ms Teresa Bellanova, stressed the many implications that undeclared work could have for a national economy, hindering jobs creation, impeding growth and impacting the more vulnerable workers as well as small enterprises. She stated that eliminating the shadow economy is a condition sine qua non for Europe to get out of the crisis, a top priority for the Italian Presidency of the EU. During the plenary debate, EESC Members underlined the importance of an EU-wide action against undeclared work and bogus self-employment that would bring those activities out of the hidden economy and give jobs creation and creativity a chance.

The opinion was adopted by 172 votes to 88, with 22 abstentions.

[1] The Shadow Economy in Europe 2013, A.T. Kearney, Visa and Friedrich Schneider, Ph.D., J. Kepler University Linz, Austria.