Simultaneously with the EU's last enlargement in May 2004, the majority of the old member states opted to apply 'transitional arrangements' with regard to the free movement of workers across the Union. The restrictions apply to eight of the ten new member states (Cyprus and Malta are exempted).
Of the EU-15, Ireland and Sweden decided to refrain from applying such restrictions to EU-8 citizens. Britain adopted a compulsory workers' registration scheme, while the remaining 12 old member states chose to maintain their work permit regimes.
In turn, the new member states were also entitled to invoke reciprocity vis-a-vis the EU-15. Only Hungary, Poland and Slovenia have chosen to do so. Among themselves, the EU-10 states are bound by the Accession Treaty to apply Community law on the free movement of workers as from 1 May 2004.
Under the 2003 Accession Treaty, the free movement of labour may be deferred for a maximum of seven years. This transitional period is divided into three distinct phases (the so-called '2+3+2 formula'):
- in phase one (between 1 May 2004 and 30 April 2006, ie for two years) the EU-15 states can apply national measures on terms based on bilateral agreements in their labour market policies
- in January 2006, the Commission will submit a report to the Council on the functioning of the transitional arrangements. Based on a review of the findings, the EU-15 states will have to notify the Commission as to their intentions for the next period
- in phase two (between 1 May 2006 and 30 April 2009, ie for three years) Community law on the free movement of labour will apply in those member states which do not notify the Commission in advance of their intention to continue applying restrictions.
- in phase three (between 1 May 2009 and 30 April 2011), the restrictions may be upheld in case of serious disturbances, or the threat thereof, to a member state's labour market
