Brussels - EU member states agreed Thursday to set up a European Labour Agency (ELA) aimed at supporting the estimated 17 million Europeans living or working in another member state and cracking down on black market labour.

"The ELA will help employees and employers to deal more easily with complex aspects of cross-border labour mobility," said Austrian Social Affairs Minister Beate Hartinger-Klein, whose country holds the European Union's rotating presidency.

The aim of the agency will be to help inform employees, firms and national bodies of their rights and obligations in cross-border situations; ease cross-border inspections; mediate in disputes; and help tackle undeclared work, among other things, ministers agreed.

Further negotiations must now take place with the European Parliament.

Commission Vice President Valdis Dombrovskis and EU Employment Commissioner Marianne Thyssen welcomed the agreement, noting that it would "strenghten the fairness" of the EU's internal market and reinforce its social dimension.

However, member states weakened Thyssen's original proposal, for example by stipulating that member state participation in labour inspections would be voluntary, so as not to meddle with domestic matters.

Germany's Trade Union Confederation welcomed the agreement, but board member Annelie Buntenbach noted that the proposal had been "watered down on important issues."

In 2017, commission President Jean-Claude Juncker had proposed creating a European labour authority, noting that it was "absurd" not to have one when the EU has a banking authority to police banking standards.