Subject: * : Open letter on the 28th regime / EU Inc.: The Commission proposal must be withdrawn and profoundly revised following the…
From: "LYNCH, Esther" <[email-masked]>
To: "info - MKM" <[email-masked]>
Date: Tue, 23 Jun 2026 13:51:04 +0300

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Open letter on the 28th regime / EU Inc.: The Commission proposal must be 
withdrawn and profoundly revised following the Council Legal Service Opinion

Brussels, 23 June 2026

*	TO: Competitiveness Council
*	TO: Permanent Representatives (Coreper II)
*	TO: Deputy Permanent Representatives (Coreper I)
*	CC: Social Attaches

Dear Ministers,
Dear Ambassadors,

We are contacting you with an urgent request following the assessment of the 
Council Legal Service on the legal basis of the Commission proposal for a 
28th regime / EU Inc.

The Council Legal Service has recently confirmed what trade unions have been 
saying all along: the Commission proposal for a 28th regime / EU Inc. is 
based on an incorrect legal basis.

If the co-legislators proceed on the basis of the current incorrect legal 
proposal, a annulment by the CJEU will be likely.
This means that the Regulation will increase legal uncertainty and 
litigation risks, and choosing the 28th regime / EU Inc. status would 
constitute a high risk also for companies.
A likely annulment of the Regulation would mean immense costs and economic 
damages, repeated changes to national systems and procedures, confusion for 
companies, national and enforcement authorities and stakeholders.

The Commission did not base its proposal on Article 50 TFEU, which was used 
in the past for company law legislation. The Commission relied on Article 
114 TFEU, which is intended for harmonizing existing national laws, not to 
create a parallel, optional regime. Also, Article 114(2) explicitly 
prohibits using this legal basis for acts relating to the rights and 
interests of employed persons. In addition, the Commission did not consult 
social partners, as required under the EU Treaties, before presenting the 
proposal, which would have been necessary considering the impact on working 
people.

The Council Legal Service (CLS) concluded that the choice of the legal basis 
(Article 114 TFEU alone) is incorrect, and that a Directive on the basis of 
Article 50 TFEU would have been the appropriate legislative tool.

In its reasoning, the CLS pointed out the specific nature of Article 50 TFEU 
for provisions whose main objective and content relate to the freedom of 
establishment, as opposed to Article 114 TFEU. Most of the provisions in the 
Commission proposal concern company law and should therefore be based on 
Article 50 TFEU, in line with the Treaties (including Paragraph 2 of Article 
50 TFEU), legislative practice and the case law of the Court of Justice. The 
CSL correctly outlined that not a single piece of EU company law legislation 
could be found that was not based on Article 50 TFEU.

The Council Legal Service also confirmed that if the 28th regime / EU Inc is 
based on Article 114 TFEU, the risk of it being declared null and void by 
the CJEU will be significant and high.

The importance of the opinion of the Council Legal Service cannot be 
overstated.

It would be irresponsible and against better regulation principles for the 
EU institutions to advance in the consideration of the Commission proposal 
following the assessment of the CLS.

The ETUC calls once more on the Council not to allow the Regulation to 
proceed in its current form.

The ETUC calls on the Council to:

*	Publish immediately the Council Legal Service opinion;
*	Ask the Commission to withdraw the proposal and revise it significantly to 
make it legally sound and based on the correct legal basis, and to introduce 
the necessary guarantees for workers' rights.

The speed at which the proposal is advancing only increases the risk of more 
mistakes in drafting and all of the negative consequences that will flow 
from that.

Trade unions will continue to follow closely the discussions and the 
positions of the governments in the upcoming debates, and will hold to 
account governments that will choose to risk legal certainty and the 
solidity of EU and national legal systems against the advice of the Council 
Legal Service.

Looking forward to your reply, we remain available for any further exchanges 
on this very important matter.

Please find also attached our previous letter dated 15 May outlining our 
strong concerns and opposition to the Commission proposal for 28th regime / 
EU Inc.

Best regards,

Esther Lynch,
General Secretary of the European Trade Union Confederation

20260623 
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_ Open letter on the 28th regime - EU Inc _ The Commission proposal must be 
withdrawn and profoundly revised following the Council Legal Service 
Opinion.pdf
20260515 
<https://hghw6cdq.r.eu-central-1.awstrack.me/L0/https:%2F%2Fwww.etuc.org%2Fen%2Fcivicrm%2Fmailing%2Furl%3Fu=211981%26qid=5686423/1/0107019ef41ae82b-932f9d9c-de76-4591-8f30-2bb6633a0aa3-000000/Mq4FO59olqcIsT6NcDQ7_LMgGYo=258> 
_ ETUC Urgent letter on the 28th regime - EU Inc proposal.pdf
  _____

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