BUCHAREST (Reuters) - French President Emmanuel Macron got lukewarm support from Romania on Thursday for his push to tighten EU rules over the employment abroad of workers from low-pay countries, but enough for him to express confidence of a deal by year-end.

French President Emmanuel Macron shakes hands with Romanian counterpart, Klaus Iohannis, during the French President's three-day tour of central and eastern Europe, in Bucharest, Romania August 24, 2017. Inquam Photos/Octav Ganea via REUTERS

Romanian President Klaus Iohannis said the concerns of countries in the east needed addressing, as well as those of the west, but gave no details on what he would deem acceptable after meeting Macron.

Macron wants to overhaul a system which allows “posted” workers to work in other European Union countries on contracts that need only guarantee the host country’s minimum wage, and allow taxes and social charges to be paid in the home nation.

He says the system creates unfair competition in wealthier nations like France and Germany.

“I’m convinced we can reach an agreement before the end of the year,” Macron told a joint news conference.

Although “posted” workers make up only 1 percent of the EU workforce, the politically sensitive issue, which in recent years has deepened the divide between the rich west and poor east, is a first step in the French leader’s drive to re-shape Europe.

“It is very important to avoid useless simplification,” Iohannis said. “On the one hand, there is discontent in France over undeclared workers, on the other hand there are many people in Eastern Europe, in Romania, who want to work in France, Germany, Spain.

“It is clear the directive needs to be improved.”

On Wednesday, Macron won the backing of Slovakia and the Czech Republic, scoring a symbolic victory over the eurosceptic governments of Poland and Hungary which have led efforts in the region to block reform of the labor directive.

Macron told Iohannis he was open to Romania joining Europe’s open-borders Schengen group and said it was in the eastern European country’s interest to be a part of a more deeply integrated Europe.

Failure to reform the EU would threaten the bloc’s future, he said.

“Part of Britain’s Brexit vote was down to the poor functioning of the single market on posted worker rules, and the rules we have on social rights,” Macron said.

CENTRAL EUROPE DIVIDE

Macron’s election win revived the EU’s Franco-German axis but in central and eastern Europe it fanned fears of a “multi-speed” Europe that could mean reduced influence, financial support and economic competitiveness.

Polish Prime Minister Beata Szydlo said on Thursday that Poland would not change its position regarding the EU’s directive on posted workers.

The Poland-based think-tank Labour Mobility Initiative estimates that by 2020, over 1 million people would lose their current jobs in CEE companies because of the changes in the posted workers directive currently proposed by the European Commission.

“”We will defend our position to the very end, because it is a position that is in the interests of Polish workers,” said Szydlo.

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Macron signaled on Wednesday that those countries which rallied behind his push for deeper integration would have their place at the negotiation table.

Some leaders have made clear they don’t want to be left out.

“In Salzburg, I declared the strong interest of the Czech Republic to be present at the discussion about the future of Europe and also to influence it,” Czech Prime Minister Bohuslav Sobotka said on Twitter after meeting Macron.

Sobotka’s government has floated a plan to gain euro zone observer status, a further sign it does not want to be sidelined.

Meanwhile Slovakia’s Prime Minister Robert Fico, who once said Brussels bureaucrats were “detached from reality”, has warmed towards the EU after Britain’s Brexit vote and Macron’s election.

He now says he wants Slovakia’s future to lie “close to the (EU) core, close to France, close to Germany.”

Slovakia and Czech Republic’s re-positioning closer to the heart of Europe leaves Poland and Hungary -- both of which Macron is shunning on his trip -- appearing increasingly isolated. The four countries make up the Visegrad 4 group.

Polish and Hungarian officials sought to downplay any divide.

“The Visegrad members differ on some issues and present diverse positions,” said Ryszard Czarnecki, a deputy speaker in the European Parliament from Poland’s ruling Law and Justice (PiS) party: “Let’s not fall into hysterics. The Visegrad group works together on the most important cases.”

An eventual new directive on posted workers will be decided by a majority vote, rather than unanimity. Even if the Visegrad 4, Romania and Bulgaria joined forces, they could not block it on their own, according to Reuters calculations.