February 28, 2018 / 1:12 PM / 10 months ago

Firms' relocations in EU should be prevented if involve social dumping- Tajani

BRUSSELS (Reuters) - The European Parliament’s president, and possible next prime minister of Italy, said a planned relocation of a white goods maker from Italy to Slovakia should be blocked if it involved “social dumping”, even if no state aid rules were breached.

European Parliament President Antonio Tajani attends a debate at the European Parliament in Strasbourg, France, February 5, 2018. REUTERS/Vincent Kessler

Embraco, a Brazil-based firm controlled by U.S. domestic appliance maker Whirlpool, has announced it will close a factory in northern Italy and relocate to Slovakia, a hot issue ahead of Sunday’s Italian election.

After a complaint from the Italian government, the European Commission said it was looking into the possible use of illegal state aid by Slovakia to encourage Embraco to relocate, but stressed it needed more information before judging the situation. [nL8N1QB539].

Asked whether the EU should refrain from acting if no state aid rules were breached, Antonio Tajani told reporters in Brussels: “Social dumping is not conceivable even if there is no breach in the use of European funds.”

Social dumping can involve luring foreign firms with lower wages and laxer regulation. Slovakia denies giving the company any investment aid.

Former prime minister Silvio Berlusconi said he planned to propose Tajani as prime minister if his centre-right bloc wins Sunday’s Italian election. [nL8N1QH5KK]

The EU has limited powers on labour law, but has tried to tackle some forms of social dumping with rules on undeclared work and working mobility. The parliament legislates on these issues together with member states and the European Commission.

After meeting a delegation of Embraco’s workers who would lose their jobs in Italy because of the relocation, Tajani said he would contact authorities in Brazil and the United States later on Wednesday to urge “an intervention”.

He said he will also try to convince Whirpool’s executives that the move could damage the company’s reputation in Europe.

“I hope they will understand that those who want to operate in Europe have to respect some rules, including the protection of workers,” Tajani said.

Reporting by Francesco Guarascio; Editing by Alison Williams

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