Letter-box companies and abuse of the posting rules: How the primacy of economic freedoms and weak enforcement give rise to social dumping

The Internal Market legislation that underpins the economic freedoms in the European Union interferes directly with national regulatory frames in the fields of social security, (income) taxation and labour law. In many sectors – including international road transport and construction which are examined in this policy brief – rules are circumvented through the establishment of letter-box companies, while additional risks of social dumping have been created by recent ECJ judgements. All in all, the primacy accorded to the freedom to provide services and the freedom of establishment actually encourages social dumping.