EU Enlargement: The Flood That Won’t Happen

EU Enlargement: The Flood That Won’t Happen

EU governments are still sounding alarms about
the prospects of a tide of work-hungry Easterners invading their
labor markets once the current candidate countries join the EU. It
may be politically expedient, but it doesn’t have much basis in
fact.

Now that the Irish have given their nod to the
Nice Treaty, Hungary and seven other Central and Eastern European
states look certain to be invited to join the European Union in
2004. But while the waiting may be nearly over, there are plenty of
politically explosive issues that will linger.

One of them–the question of labor movement
after EU enlargement–gained an extra charge in August, when a
Reuters report said up to 800,000 Hungarians might look for work in
Western Europe after the country joins the European Union.
Predictably, the story was swiftly picked up on the wires and ran
in media from Estonia to Ireland. Western European fears, already
deeply entrenched, now had more evidence to feed off, it
seemed.

The figure, extrapolated from the findings of an
opinion poll conducted by the Hungarian Social Research Center
TARKI, is certainly dramatic. How many Hungarians would like to
move to the West, it asked? Four percent answered “definitely,” 6
percent said “probably.” Add to that the awareness that Hungarian
GDP per capita is around half the EU level based on purchasing
power parity, and you have the makings of a good scare. These were
figures large enough not just to touch but also to play on the
always raw nerves of labor ministers in Austria, Germany, and other
European countries.

Western Europe has shown clearly that it is
worried about migrant workers pouring into its labor markets. The
chapter on labor mobility proved one of the prickliest in the
applicants’ as-yet-unfinished accession talks with the EU.
Ultimately, Hungary had to accept the “2-3-2 system” championed by
Germany and Austria (and backed by plenty of others). For at least
two years after Hungary’s accession (assumed to be in 2004), the
EU’s current member states can impose the rules they choose. After
that, their rules will continue to apply for another three years,
depending on the findings of a European Commission report on
migration and EU labor market indicators. In exceptional
circumstances, another two years can be tacked on.

In the meantime, the gap in wealth between
Hungarians and Western Europeans will narrow (Hungary’s 3 to 5
percent annual rate of growth in recent years may not be dramatic,
but it is still better than the EU’s), and governments can work on
boosting employment at home and the employability of their own
citizens.

Western European fears have therefore meant that
they have gone against one of the fundamental principles of the
European Union: the free movement of labor.

Politically, this may have been necessary in
order to assuage the fears of Western voters. In practice, though,
it was probably superfluous.

LIES, DAMN LIES, AND STATISTICS

First, consider TARKI’s findings. Perhaps its
most notable finding was not the number of would-be Hungarian
migrants, but rather that their number is shrinking. Since March
2001, the number of respondents who would “definitely” seek
employment in the EU after Hungary’s accession has fallen from 7 to
4 percent, and those who would “probably” move edged down from 7 to
6 percent. And, of the 10 percent considering a move, only a
quarter were interested in a long-term change.

Translated into absolute numbers, that might
still frighten many, but–as TARKI underlined–previous polls have
tended to overestimate actual labor mobility.

Second, regulation is just one of the barriers
to be cleared before entering a foreign market. Another is
language. In Hungary’s case this is a major obstacle. Hungarians
may b e fonder of the EU than their Central European neighbors (in
a survey by the GfK polling agency in May, 66 percent supported
accession–and, unusually, the number is rising) and have greater
confidence in the EU, but that doesn’t translate into fondness for
its major languages. Just a quarter of Hungarians are able to
communicate to some degree in one of the five major Western
European languages: English, German, French, Italian, or Spanish.
That figure, which comes from last October’s Eurobarometer survey,
places them 11th out of the 13 candidate countries.

Another is psychology. Certainly, ambitious or
desperate Hungarians might soon shake the language handicap if
wages stay low and opportunities remain limited. But even now, when
employment abroad presumably looks financially more alluring than
it will in the future, Germany’s quotas for Hungarian guest workers
are frequently unfilled. (Indeed, between the mid- and late-1990s,
more EU citizens moved onto Hungary’s labor market than went in the
other direction, the Nuremburg-based Institute for Employment
Research wrote in December 1999.)

In short, Hungarians tend to stay at home rather
than scout for opportunities abroad, an assertion backed by
Hungarian studies. Saying one is definitely or probably interested
in working abroad is, it seems, a long way from making good on the
idea.

And past experience provides a third reason for
assuming projections of labor mobility will prove inaccurate. When,
in the 1980s, the EU enlarged to take in the Mediterranean rim,
Spain, Portugal, and Greece had a per capita GDP that was just 50
to 60 percent of the EU average. However, there was no significant
increase in emigration. If anything, rapid growth meant that, in
net terms, more Spaniards, Portuguese, and Greeks headed
homeward.

So a large inflow, let alone a flood, of
Hungarian workers seems highly unlikely. One day, from Aachen to
Zwelt, we may hear a collective sigh of relief that the supposedly
inevitable has not happened. But we shouldn’t hold our breath.
Faced with the problems of an aging population and labor shortages
in fields as wide apart as health and computer science, Western
Europeans should perhaps already be sighing with relief at the
prospect of a few well-educated, highly motivated workers turning
up from Central Europe, rather than worrying. Instead, flying in
the face of the evidence, anxiety about Easterners stealing jobs
from the locals is likely to persist, putting pressure on
politicians. When (presumably in 2006) EU governments can lower
foreign-labor requirements and grant full EU rights to Hungarians,
it’s wisest to assume they won’t.

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