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The EU Is Growing, but Western Europe's Fears of Mass Migration Are Overblown

April 2, 2004
Related Topics: Global Business Issues, Managing International Operations, Workforce Planning, Featured Article, Recruitment

The European Union’s expansion to include eight Eastern European countries on May 1 might once have generated great joy in these former Communist lands. Instead, Western European restrictions on where their Eastern counterparts can work have led to disappointment and bitterness.

    The ability to move freely from country to country was "the key tangible result of integration. It’s a huge psychological thing for Eastern Europeans," who were isolated for so long, says Miroslav Beblavy, Slovakia’s state secretary for labor, social affairs and family. But with the employment restrictions, there’s "a feeling that nothing has changed. We’re still second-rate Europeans."

    In the 15 countries that now make up the EU, there’s no limit on who can move where, so an Italian hair stylist can set up shop in Ireland, or a Greek nurse can work in Germany. That was also the plan when the EU decided to expand, adding the former Communist countries of Poland, the Czech Republic, Slovakia, Slovenia, Hungary, Latvia, Lithuania and Estonia, as well as Cyprus and Malta.

    But EU members Germany and Austria balked. With borders abutting Eastern Europe, they feared they would be overwhelmed by immigrants leaving behind far lower wages and, in some cases, higher unemployment rates.

    In response, the EU established a two-year transition period, allowing existing EU members to make their own arrangements with Eastern European countries. Residents of the two non-Eastern European countries--Cyprus and Malta--are free to move about as they please. But residents of the other eight incoming EU member countries can’t, unless they want to move to the United Kingdom and Ireland, which are the only EU countries that haven’t imposed immigration restrictions. The issue will be revisited in 2006, but some countries may opt to keep the restrictions in place until 2011.

"Everybody Was English"
    Even had there not been restrictions, some Western European experts say that EU countries were unlikely to be swamped with immigrants. Dr. Martin Werding, head of the department of social policy and labor markets for IFO, the Institute for Economic Research, in Munich, Germany, says his institute had predicted that 250,000 to 300,000 immigrants would come to Germany right after enlargement. Although that’s a drop in the bucket in a country of 82 million, it was enough to get German officials scurrying to the EU, urging the establishment of a transition period.

    Eastern Europeans have moved west since the Berlin Wall fell in 1989, and these newcomers "were better educated than earlier cohorts of immigrants," such as Turks and Italians, Werding says. The Easterners tended to initially hold low-skill jobs, but quickly moved up to better-paying ones. He predicts that Eastern Europeans will continue to come to Germany, provided they can get a work permit by proving that no one else in the local labor market can do the job.

    Clive Newton, managing director of leadership development solutions for Korn/Ferry International in London, says London’s population has changed dramatically over the past decade. Before, "nearly everybody was English." Today, few waiters, store clerks or au pairs are.

    The United Kingdom has been a big draw because its unemployment rate is lower than that of much of Europe. For November, it stood at 4.9 percent, compared to 8 percent for the EU as a whole. In Eastern Europe, the average was 14.2 percent. In addition, in the UK, "migration laws are by no means clear and by no means enforced," Newton says.

    Hotels, retailers and agricultural businesses recruit in the East. "It’s quite wrong to think that this [recruiting] is going to start when the borders come down. The truth is this has been going on for a long time," he says.

    Highly skilled workers such as IT professionals and health-care workers also have migrated to Western Europe, and that may continue apace if the EU doesn’t do enough to help Eastern European countries grow, says Jean-Christophe Dumont, a migration expert with the Organization for Economic Co-operation and Development (OECD) in Paris. According to OECD figures, in 2002 per capita gross domestic product in the UK was $26,400; in Germany, it was $24,100. This compares to $6,800 in the Czech Republic and $4,900 in Poland.

    Despite the salary differences, countries such as Slovakia never expected a huge outflow of employees, Beblavy says. Unlike Americans, who don’t think twice about moving across the country, many Slovaks are unwilling to pack their bags, even if the unemployment rate in the capital, Bratislava, is one-eighth what it is in their hometowns.

    But if income doesn’t rise and joblessness doesn’t fall, more employees might look elsewhere for work, says Philippe Egger, senior economist with the International Labour Organization in Geneva. "It’s not that the people want to move. They have skills, certain aspirations in life--we all want to strive to achieve a certain level of living."

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