Pressure is growing on EU authorities to mitigate the effects of austerity measures introduced to bring down national debts and of the reforms aimed to harmonise the European labour market.

"The currently predominant mix of austerity and structural reforms is unacceptable and has produced negative results," Guy Ryder, director-general elect of the International Labour Organization told a recent jobs conference in Brussels.

He urged for an "immediate change of policy" and for EU-wide solidarity.

The ILO calculated that if Greece leaves the Eurozone unemployment would increase even in Germany, where it predicted the so-called "Grexit" could cause the jobless rate to rise by 25 percent.

“Should we have been at the table in Greece, we could have made a difference” Ryder pointed out.

In a speech Monday in Slovenia, European Social Affairs Commissioner László Andor also urged European governments to do more to boost job creation.

"We need to give greater priority to employment policy," he said. "Social justice, solidarity and equal opportunity are a precondition for economic prosperity and growth, for the well-being of our fellow Europeans, and for the cohesiveness of European society."

And yet, last week the European Union was forced to drop proposed legislation that was widely regarded as a threat to some core labour rights, like the right to strike.

The decision came after widespread opposition from trade unions, lawmakers and national governments.

Unions insist that improved legislation is still needed to ensure that fundamental social rights cannot become overridden by economic freedoms enshrined in EU treaties.

“The (European) Commission should confirm that the EU is not only an economic project, but in fact has as its main objective the improvement of living and working conditions of its citizens," said Bernadette Ségol, general secretary of the European Trade Union Confederation.

The draft regulation put forward in March was designed to fill gaps in European law that were exposed by legal cases in the mid-2000s where the right to strike clashed with the EU principle that its 27 countries form a single economic and labour market.

In the so-called Viking case, Finnish seafarers struck over plans by a shipping line to re-flag a ship under the laws of Estonia, which offer less protection to workers. The second case saw Swedish unions strike to ensure a contractor paid Latvian construction workers Swedish rates when they were working on Swedish building sites.

Although designed to end ambiguity in EU laws, the proposed new legislation was quickly denounced by trade unions around Europe as questioning the basic right to take collective action.

"The proposed regulation… puts economic freedoms and fundamental rights on the same footing," said a joint statement last week by Luxembourg’s OGBL and LCGB union confederations.

"Such a principle is unacceptable because it limits workers’ rights and the capacity of unions to act. The right to take collective action is a fundamental right that has to take priority over economic freedoms."

Unions and left-of-centre politicians are now calling for the flawed proposal to be replaced with fresh legislation that will guarantee workers’ rights in cross-border disputes.

"The Commission must find a way of promoting workers’ rights, equal treatment and fair competition in primary legislation," said Emer Costello, an Irish Labour Party member of the European Parliament.

In statement, she said parliamentarians would work with the Commission "to find a legislative solution that provides full recognition of fundamental rights, promotes equal treatment, and protects against social dumping."

Paradoxically the decision to drop the right-to-strike regulation was also welcomed by right-wing politicians and Europe’s largest business lobby. However, while the unions want revised rules, BusinessEurope said the issue should now be dropped at EU level so each of the EU’s 27 member countries can stick to their own rules on the right to strike.

"There is no need for any EU regulatory initiative in this area," the employers’ organization said.

The European Commission insists the right to strike and the freedom of movement for workers remain "fully guaranteed" under EU law.

The EU head office is hoping for early approval from national governments and the European Parliament of another draft law designed to strengthen the rights of workers posted to other countries within the EU.

Andor meanwhile is reflecting on possible further next steps regarding possible EU-wide right-to-strike legislation to cover cross-border cases, EU officials told Equal Times.