Free movement of workers since the 2004 enlargement had a positive impact
A European Commission report published today shows that workers' mobility from the EU Member States in Central and Eastern Europe to EU15 has had mostly positive effects and has been in most countries quantitatively less important than foreseen. Workers from EU10 helped to relieve labour market shortages and contributed to better economic performance in Europe. Countries that have not applied restrictions after May 2004 (UK, Ireland and Sweden) have experienced high economic growth, a drop of unemployment and a rise of employment. As to the 12 EU countries using transitional arrangements, where workers managed to obtain access legally, this has contributed to a smooth integration into the labour market. However, evidence suggests that some of these countries may also have faced undesirable side-effects, such as higher levels of undeclared work and bogus self-employed work. For the EU as a whole, flows of workers have been rather limited.
The report's statistics, submitted by the EU member states themselves, show most countries having seen lower than expected labour flows from Central and Eastern Europe. There was no evidence of a surge in either numbers of workers or welfare expenditure following enlargement, compared to the previous two years. New Member State (EU10) nationals represented less than 1% of the working age population in all countries except Austria (1,4% in 2005) and Ireland (3.8 % in 2005). Ireland has seen relatively the largest inflow of workers. This contributed to its very good economic performance. EU10 workers alleviated skills bottlenecks, and had a much lower percentage of unskilled workers than the national equivalent according to the 'Report on the Functioning of Transitional Arrangements'.While fully acknowledging Member States' right to decide on the further use of transitional arrangements, Vladimir Spidla, EU Commissioner for Employment, Social Affairs and Equal Opportunities, nevertheless, recommends Member States to carefully consider whether the continuation of transitional arrangements is needed, in the light of their labour market development and the evidence of this report: 'Free movement of workers is one of the four fundamental freedoms of the EU. This report clearly shows that the movement of free workers has not had disruptive effects on EU15 labour market. Quite the contrary individual countries and Europe as a whole has benefited from it,' he said.
National restrictions have had little direct effect on controlling workers' movement, the report indicates.
'Concerning transitional arrangements, the evidence shows that there is no direct link between the magnitude of mobility flows from EU10 Member States and the transitional arrangements in place.
Ultimately, mobility flows are driven by factors related to supply and demand conditions,' it states. Many of the work permits which were issued were for short term or seasonal work.
According to the Accession Treaty signed on 16 April 2003, Member States have until 30 April 2006 to decide whether to lift national restrictions on workers' free movement in the EU. These were introduced in May 2004 by all old (EU 15) Member States (except Ireland, Sweden and the UK) on workers from the eight new EU Central and Eastern European countries. Reciprocal restrictions on labour flows in the opposite direction were imposed by three new Member States: Hungary, Poland and Slovenia (see MEMO/06/64 for full country details).
The Commission's report, as required by the Accession Treaty, highlights statistics and experiences of labour flows from new to old EU Member States since enlargement in May 2004. It is designed to provide Member States with a factual basis when deciding on whether to continue with national labour markets restrictions on workers' movement.
The next step is for the Commission's report to be presented to the Council.