Few of the EU's 'older' and wealthier member states continue to restrict access to their labour markets to workers from Eastern Europe, with Germany and Austria the only countries opting to maintain compulsory work permits until 2011.
Milestones
- 1 May 2004: EU-15 enlarges to eight ex-communist states (EU-8) from Central and Eastern Europe, Cyprus and Malta. 'Old' EU member states may decide to restrict labour movements but have to gradually lift them, following a 2+3+2-year scheme.
- 1 Jan. 2007: Romania and Bulgaria join the EU, bringing total numbers of member states to 27 (EU-27). Their citizens are also subject to a 2+3+2 scheme.
- 30 April 2011: All labour restrictions to be lifted for EU-8 countries.
- 1 Jan. 2014: All labour restrictions to be lifted within the EU 27.
- Labour movement restrictions are likely to apply when more countries join the EU, depending on the state of their economy.
Policy Summary
In an attempt to address the complex implications of the EU's 2004 and 2007 enlargements, several member states from the EU-15 introduced 'transitional restrictions' on the movement of workers from the new member states.
Free movement of labour is a fundamental right in the EU. Therefore, the curbs can be maintained for a maximum of seven years - until May 2011 in the case of workers from the eight countries that joined the Union in 2004, and until 2014 in the case of workers from Bulgaria and Romania.
With most statistical evidence indicating that the economic impact has been positive in the countries which chose not to maintain restrictions, a wider debate has emerged as to whether the concerns that led some countries to put these restrictions in place were unfounded.
Issues
Free movement of persons is one of the fundamental freedoms guaranteed by Community law (Article 39 of the EC Treaty) and is also an essential element of European citizenship.
Community rules on the free movement of workers also apply to member states of the European Economic Area (i.e. to Iceland, Liechtenstein and Norway). The relevant rights are complemented by a system for the co-ordination of social security schemes and by a system to ensure the mutual recognition of diplomas.
The Accession Treaty allows for the introduction of 'transitional measures'. Commonly referred to in EU circles as the '2+3+2-year arrangement', this scheme obliged the member states to declare in May 2006, and again in May 2009, whether they would open up their labour markets to workers from the EU-8 (Poland, Lithuania, Latvia, Estonia, the Czech Republic, Slovakia, Hungary and Slovenia) or keep restrictions in place.
The restrictions will definitely end on 30 April 2011. A similar '2+3+2' scheme is in place with respect to workers from Romania and Bulgaria, which joined the EU on 1 January 2007.
One of the initial reports published by the European Commission in February 2006 said that very few citizens from the new member states were actually moving to the EU-15 countries. According to the report, EU-10 citizens represented less than 1% of the working age population in all old EU member states except Austria (1.4%) and Ireland (3.8%).
Thus, the predictions from some quarters of 'floods of immigrants' arriving in old member states, a significant factor behind the original restrictions, have turned out to be incorrect.
Opening borders has only had positive economic effects, says Commission
As a matter of fact, a number of statements made throughout the 2008-2009 period by EU Commissioner for Employment, Social Affairs and Equal Opportunities Vladimír Špidla underlined that those who maintain restrictions on the basis that opening borders will have a negative impact on national economies are making a mistake.
According to Špidla, the evidence from all the Commission's reports and studies is that mobile workers from the countries that joined the EU in 2004 and 2007 have had a positive impact on member states' economies and have not led to serious disturbances in their labour markets.
"There is little evidence," said Špidla, "that workers from the new member states have displaced local workers or driven down their wages in a serious way, even in those countries where the inflows have been greatest, although there have been some temporary adjustment problems in specific areas".
Such findings have effectively debunked many of the concerns and, in some cases, fears that arose in the 'old' EU 15 at the dawn of the enlargement era. For example, as reported by EurActiv, the widespread myth in France of the 'Polish plumber' – that is, that a flood of Eastern workers would severely destabilise the country's labour market – has now been disproven as a "hoax of political history" (EurActiv 22/10/09).
Country-by-country
The policies relating to the free movement of workers from the EU-8 within the EU-15 states could be classified into four categories:
- Those keeping the restrictions in place after May 2009: Austria and Germany.
- Those who lifted the restrictions gradually, between 2006 and 2009: Belgium, Denmark, France, Luxembourg, The Netherlands.
- Those keeping labour markets open / removing restrictions: Finland, Greece, Ireland, Italy, Portugal, Spain, Sweden, United Kingdom.
With respect to the 1 January 2007 enlargement, which brought Romania and Bulgaria into the EU, many 'old' EU member states were more reluctant to open their labour markets. All EU-15 countries, with the exception of Sweden and Finland, decided to restrict Bulgarians' and Romanians' access to their labour market.
Italy will consider allowing Romanians and Bulgarians in once a European agreement on combating organised crime is found. France announced that it will include workers from the two countries into its scheme of sectorial barrier-lifting.
All the new EU-10 decided to open their labour markets - with the exception of Malta, which constricts access, and of Hungary, which imposes some conditions.
Austria
Citing "pessimistic" labour market forecasts, Austria along with Germany is the only country continuing to apply the restrictions beyond 2009. "We do not have particularly high levels of unemployment, but the long-term forecast is not good," Austrian Labour Minister Martin Bartenstein said. Workers from the 10 former communist states have to apply for work permits. There are also curbs on employers posting workers to Austria in certain sectors.
According to the Austrian Federal Chamber of Labour, the European Commission spoke against the Austrian extension demand, disagreeing with Vienna's self-assessment of "considerable problems in the national labour market". The Council of Ministers nevertheless backed extending the restrictions.
The Czech EU Presidency, which encompassed the first half of 2009, vocally criticised the German and Austrian governments for maintaining restrictions, calling them "unjustified".
Belgium
Belgium decided to open its labour market to citizens of the eight East European EU countries of the 2004 enlargement from 1 May 2009. A few months beforehand, the country made it easier to get work permits in areas of the economy where jobs are hard to fill. Nevertheless, Bulgarians and Romanians must continue to apply for work permits until 2011.
Current Belgian EU Commissioner Karel De Gucht, who at the time was foreign minister, backed lifting the labour restrictions, and, according to Reuters, claimed that thousands of Poles were working illegally in Belgium. "This flux of people would not change if it was made official. But the result would be that they would pay social contributions and taxes," Reuters quoted De Gucht as saying.
Denmark
Denmark decided to open its labour market to citizens of the ten East European EU countries from 1 May 2009. Denmark was the 12th country among the 'old' EU 15 to abolish such restrictions.
Finland
Finland lifted all restrictions on workers from the eight 2004 entrants on 1 May 2006. Previously, citizens of the new member states could get a job without a work permit only if the employment office decided there was no-one else available on the Finnish labour market. It has imposed no restrictions on workers from Bulgaria and Romania.
France
In early March 2006, France's government decided on a "step-by-step controlled lifting of restrictions" on free movement of labour from the EU-8 countries. The partial opening of the French labour market started with sectors where labour was in short supply (e.g. social and health care, hotels and catering, transport and construction). In December 2006, France decided to include Romanian and Bulgarian workers in the scheme on the same terms.
But on 1 July 2008 – a year earlier than planned – France opened its labour market to workers from the 2004 accession countries. That move coincided with France assuming the EU's six-month rotating presidency.
Workers from Bulgaria and Romania are eligible for fast-track work permits if they apply for any of a list of 62 jobs where recruitment is a problem.
Indeed, attitudes in France have changed to the extent that EurActiv France recently described as a "hoax of political history" the spectre of the 'Polish plumber', which haunted the French referendum campaign on the European Constitution in 2005 (EurActiv 22/10/09). "The predicted flood of Eastern workers in France never happened," the report argues, going on to note that "in fact, France suffers from a deep statistical deficit regarding its foreign labour force, which prohibits any reliable assessment of the number of Eastern workers on its soil".
Germany
The government of Germany originally decided to continue the transition period for EU-8 workers until 2009. On 22 October 2006, the country also decided to curb Bulgarian and Romanian workers' access to its labour market. One main reason cited by Berlin is high unemployment, especially in the federal states bordering the Czech Republic and Poland.
However, Germany issued 500,000 of these permits between 2004 and 2006. "In practice Germany has given as many people work as other big countries," EU Employment Commissioner Vladimir Špidla said in May 2006.
On 25 April 2008, the then Conservative-Social Democrat government majority said it aimed to maintain barriers for Central and Eastern European workers until 2011. The Commission responded by recalling that in order to maintain the transitory measures beyond 2009, Germany must prove "severe distortions of its labour market, beyond mere unemployment".
The Czech Republic, which held the rotating EU presidency during the first half of 2009, strongly criticised the decision by Germany and Austria, calling it unjustified and claiming that it flew in the face of all "available evidence".
Greece
Greece dropped all restrictions on 2004 entrants as of 1 May 2006. It introduced some restrictions on workers from Bulgaria and Romania, but lifted them in January 2009.
Ireland
Ireland was one of three countries which immediately opened its labour markets to all new member states in 2004 with the EU-10 enlargement.
However, following the UK's decision to impose transitional measures on workers from Bulgaria and Romania, Ireland imposed similar measures, albeit without any exceptions, arguing it did not really have any choice but to follow suit.
An influx of an estimated 200,000 workers from Central Europe came to Ireland between 2004 and 2006. However, evidence suggests that a significant proportion of these labour migrants have since left Ireland due to the country's severe economic downturn in 2008-2009, particularly in its construction industry, where many of the workers were employed, Irish sources told EurActiv.
Italy
In July 2006, two months after it was sworn in, Italy's centre-left government, led by former European Commission President Romano Prodi, took the decision to end the transitory measures.
Italy introduced restrictions on some categories of workers from Bulgaria and Romania. But work permits are not required in agriculture, hotel and tourism, domestic work, care services, construction, engineering, managerial and high-skilled work.
Luxembourg
In November 2007, Luxembourg lifted restrictions for workers from the 2004 accession countries.
Luxembourg simplified work permit procedures for Bulgarian and Romanian workers in agriculture, hotel and catering and certain areas of finance.
The Netherlands
As a first step to slowly phase out restrictions, the Dutch government opened, on 17 September 2006, 16 sectors of its labour market to workers from the EU-8 states. The decision concerned sectors where workers are scarce or where there had been a high percentage of illegal workers.
In a letter to the Dutch parliament, Secretary of State H.A.L Van Hoof wrote that the country will consecutively drop barriers in other sectors too, adding that once all sectors have been liberalised, the country might even drop its work permit scheme altogether.
The Dutch government lifted all restrictions on 1 May 2007 for workers from the 2004 accession countries.
For workers from Bulgaria and Romania, a work permit will be issued whenever there are no suitable workers available in the Netherlands or other EU member states and the employer can fulfil the norms for working conditions and accommodation.
Portugal and Spain
Portugal and Spain dropped all restrictions on workers from the 2004 entrants on 1 May 2006. Between 2004 and 2006, Portugal imposed a 6,500 annual limit on immigrant workers of all nationalities.
The two countries operated a work permit system for workers from Bulgaria and Romania for the first two years after their accession, but dropped that requirement in January 2009.
Sweden
Sweden was one of three countries, along with the UK and Ireland, which chose to apply no restrictions to workers from the new EU member states. It has taken the same liberal stance with regard to workers from Bulgaria and Romania.
United Kingdom
The UK was, together with Sweden and Ireland, the only country not to impose transitional measures on EU-8 workers in the first place. Its open-borders policy led to an estimated labour immigration of 450,000 to 600,000 within the two-and-a-half years following the May 2004 enlargement. This amounts to about 30 times the number previously expected.
Despite the demonstrably positive impact that the immigration of EU-8 workers had on the British economy, the UK government decided on 24 October 2006 not to apply a similarly liberal scheme to Romanian and Bulgarian job-seekers (see EurActiv 25/10/06).
Under the scheme announced, only a few experts and 20,000 unskilled workers for the food processing and agriculture industries were allowed into Britain. Self-employed people from Bulgaria and Romania were the only others allowed to work in the UK.
Next enlargement wave: Turkey in focus
Turkey is home to 70 million people - almost the same number of citizens as the EU-10 member states combined. If and when it becomes a member of the EU - a scenario which in the current political climate seems a very distant prospect - the country will be second only to Germany in terms of population size.
The labour market implications of the EU's current enlargement, along with the conclusions reached from the current transition period, will certainly have a bearing on the way the EU will function at 28+ members.
The articles below analyse the country's prospective EU membership, including likely scenarios for Turkey's labour market:
- European Parliament: 2009 resolution on Turkey's accession progress report (March 2009)
- Charles University Prague: Turkey and the European Union: possible incidence of the EU accession on migration flows (April 2009)
- Egmont Royal Institute for International Relations (Belgium): European Union's capacity to absorb Turkey (December 2005)
Positions
"The right to work in another country is a fundamental freedom for EU citizens. Restricting this in a democratic system can only be possible if you have a very good reason," said Employment Commissioner Vladimir Špidla, having previously noted that the "free movement of workers […] has not had disruptive effects on the EU-15 labour market. Quite the contrary - individual countries, and Europe as a whole, have benefited from it".
Špidla has previously stated that in his opinion, free movement of labour is more important than any of the other EU freedoms.
In mid-2009, Czech Deputy Foreign Minister Vladimir Müller argued that "free movement of workers is one of the main pillars of the EU free market. Restrictions are incompatible with the Lisbon Strategy. That's why we have argued for full free movement since the beginning of accession talks. This is the only way to achieve a competitive and innovative Europe," he added.
However, Germany's State Secretary for Employment Gerd Andres defended Germany's decision to maintain restrictions, claiming that the Commission's February 2009 report did "not take into account the effect of transition periods". He went on to add that "the geographical position is very different for Germany and Austria than it is for France or the UK".
The International Organisation for Migration (IOM) argued that the migratory impact of enlargement is likely to be "less dramatic" than projected. In fact, the IOM believes that the new member states themselves are bound to become the main targets for immigrants, considering these countries' "increased economic convergence, growth and improved living standards".
Former Italian Competition Commissioner Mario Monti, who was recently asked by current Commission president Jose Manuel Barroso to prepare a report on the re-launch of the EU's single market, criticised the transitional restrictions, arguing that "there has been no influx to justify them and the unexpected proliferation of complex national quotas and qualitative restrictions undermines the Lisbon Strategy for flexible markets and a skilled, mobile labour force".