France/Germany: Challenge to wage protectionism

The European Commission is set to challenge requirements for foreign truck drivers to be paid the national minimum wage in France and Germany before they are permitted to make deliveries there. France introduces a new law on July 1st 2016 not only requiring drivers to be paid a minimum of 9.67 euros an hour, but also for foreign truck companies to appoint a representative in France. The principal problem for the mainly eastern European transport companies that will be hit by the new law is that many also rely on cabotage (making subsequent deliveries in France and securing a delivery for the home run) to make their business pay. The French and German governments are clearly seeking to protect their domestic transport operators by such restrictions, but in doing so will also raise the costs of imports and damage manufacturers in many poorer EU economies that will find it far more difficult to compete with rival firms in Western Europe.

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