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Luxembourg opens doors to new Member States

When Pascal Gerard, manager of a construction company from Luxembourg hired Malec Slavomir, a Polish worker, he couldn’t tell how long the employment-related formalities would take.

Malec came to Luxembourg to find a job, called in at the site where Pascal’s team was working and asked if there were any available positions. He passed a practical test and Pascal immediately decided to hire him. Just a month earlier, Malec would have spent months applying for a visa and Pascal would have had to wait a similar length of time, if not longer, in order to obtain the necessary work permit for Malec. However, the labour regulations in Luxembourg had just changed and it was hard to believe that the new, ‘no-restriction’ policies would shorten the process from an indefinite period of time to just two days, at most.

From the 1 November, Luxemburg decided to lift any remaining labour market restrictions on jobseekers from countries of the 2004 EU enlargement. The process of hiring a migrant worker is therefore now exactly the same as hiring local staff. The majority of the ‘old’ 15 EU Member States initially applied so-called ‘transitional rules’. These rules allow restricted access for citizens from the new Central and Eastern European Member States to the EU-15 labour markets for a maximum of seven years. However, the regulation foresees the possibility of lifting barriers in stages. The ‘2+3+2 year’ formula states that the old EU members had to review their restrictions for the first time two years after the 2004 enlargement, that is to say in 2006, and for a second time three years later, in 2009. The deadline to remove all limitations is a further two years later, in 2011.

Luxembourg had imposed work restrictions, but strong economic growth and a shortage of qualified labour convinced Luxembourg to allow individual work permits in a number of business sectors, including finance, IT, construction and agriculture. Nicolas Schmit, Luxembourg’s Minister of Foreign Affairs, emphasised that his government’s recent decision to lift all barriers aims to ensure that “the free movement of EU citizens within the Schengen area is accompanied by the free circulation of workers”. All Member States from the 2004 round of enlargement will apply the Schengen Agreement, which allows for the abolition of systematic border controls between the participating countries, from January 2008.

The EU-15 Member States remain split over easing access to their labour markets. An increasing number of countries, including Belgium, Spain, France, Italy and Portugal, either opened certain business sectors or lifted restrictions earlier than originally planned. Their decisions aimed at encouraging economic growth or solving acute staff shortages. Recently, Germany has also decided to reduce labour market restrictions for a limited number of sectors and professions.

Luxembourg’s economy is characterised by low unemployment, a high growth rate, substantial cross-border mobility and long-term immigration measures. EURES Adviser Mario della Schiava explains that “large numbers of foreign workers come to Luxembourg, attracted by our good salaries, relatively low taxes and an interesting cultural experience.” Among the 12,000 new jobs that have been created over the last year, 72.5% of the vacancies have been filled by cross-border workers commuting to Luxembourg each day.

Pascal Gerard helped Malec to find accommodation on the same day he signed his contract. He then registered Malec with the local administration authorities the following day. Due to his qualifications and basic knowledge of German, Malec was quickly integrated with the team. He is now attending German classes and is seriously considering bringing his family over to Luxembourg. This story shows the context in which foreign workers from Central and Eastern Europe are largely welcomed and much needed to fill gaps created by an ageing workforce, a declining domestic population, and an expanding economy.

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