28th Regime = Trojan Horse
STATEMENT OF THE EUROPEAN LEFT
The “28th Regime” Proposal: A Trojan Horse for Corporate Deregulation and Social Dumping
As the European Commission prepares to unveil its legislative proposal for a “28th Regime” for companies this month, the Party of the European Left issues a stark warning: Europe’s economic future must not be built on a race to the bottom.
Marketed by Commission President Ursula von der Leyen and corporate lobbying groups as a necessary tool for “competitiveness” and scaling up innovation, the 28th Regime threatens to become a backdoor for widespread social dumping. By creating a parallel, optional EU-wide legal framework, the Commission is effectively handing corporations an à la carte menu to bypass national labor laws, co-determination rights and fair taxation models.
“Simplifying administration” for startups and SMEs is a goal we support, but it must not serve as a smokescreen for dismantling a century of hard-won social rights. The current trajectory of the 28th Regime including provisions for 48-hour digital incorporation risks transforming the European Union into a patchwork of corporate havens, facilitating the creation of letterbox companies and undermining member states’ ability to enforce corporate accountability.
Echoing the grave concerns raised by the European Trade Union Confederation (ETUC) and other labor organizations, the EL demands that any EU-wide corporate framework prioritize the people who actually create a company’s value: its workers.
The Party of the European Left categorically rejects any 28th Regime proposal that does not include the following ironclad guarantees:
- No Opt-Outs on Labour Rights: The regime must not allow companies to escape national labour standards, collective bargaining agreements, or workers’ rights to board-level representation and co-determination.
- Strict Tax Transparency and Fair Contribution: The framework cannot become a new avenue for aggressive tax avoidance. Companies utilizing the 28th Regime must be subject to rigorous country-by-country reporting and a robust minimum effective tax rate to prevent intra-EU tax competition.
- Prevention of Artificial Arrangements: Safeguards must be explicitly written into the regulation to ensure companies have a genuine economic presence and real operations, permanently closing the door on purely shell or letterbox registrations.
The push for European “competitiveness” heavily emphasized in recent months following the Letta and Draghi reports cannot mean competing to see who can exploit workers the most efficiently. We stand in solidarity with European trade unions and civil society in demanding a social Europe, not a corporate playground.
The Party of the European Left calls on the European Parliament and the Council to rigorously scrutinize the upcoming Commission proposal and block any mechanism that prioritizes frictionless capital over human dignity and social justice.