European Commission: open labor markets, migrant workers facilitate economic growth

  • 2006-02-15
  • By TBT staff
RIGA - The European Commission released a crucial report last week saying that countries with open labor markets have reaped economic rewards, while Trade Commissioner Peter Mandelson urged older EU members to remove restrictions to migrant workers from the new East European member states. The report said that the United Kingdom, Ireland and Sweden have seen their economies expand thanks to their open labor markets while at the same time unemployment has not increased.

The other 12, older member states have had restrictions in place on workers from the eight new Eastern European members, and Mandelson encouraged them to "be proud and take advantage of the sheer energy, dynamism and hard work that people from the new member states bring."

The commission report also said that, in addition to economic gains, open labor policies have filled labor market gaps and not flooded welcoming countries. What's more, the net effect on the EU's economic health has been positive, the report said.

The report, issued on Feb. 8, came one day after Mandelson criticized "populist" policies that were holding back the EU's economy, which has failed to outpace that of the U.S.A. and will not meet its 2010 Lisbon Agenda goal to become the world's most innovative and dynamic economy.

The report hit like a bombshell, since the freedom of movement for labor has been one of the most contentious issues among older member states such as Germany and France that fear a sharp rise in unemployment as cheap workers from Poland and the Baltic states arrive to snap up jobs.

Many of the member states that have restrictions in place are due to review them at the end of April. Germany and Austria, which holds the rotating presidency of the European Council for the current six-month period, have hinted they would renew their existing barriers, while Finland and Spain have said they would drop their restrictions on May 1. Several are considering lifting some restrictions while leaving others in place.

The commission's report was designed to bring leery member states into the fold and sway the European Parliament, which is scheduled to vote on whether to open the union's service market to cross-border competition.

The debate on the services directive made headlines last year after France raised fears that opening its borders to cheap workers would detrimentally influence the country's social fabric and labor market standards.

France is also defending 11 sectors of its economy from foreign takeovers, which has pitted it against the European Commission, the EU's executive arm, and Mandelson, in particular. He said the commission would fight against "the emotion of economic nationalism."

Meanwhile, Commission President Jose Manuel Barroso has been placing ever more emphasis on turning Europe into a "paradigm of openness." He has referred to France's fear of migrant workers as an "obsession," and last week in Pittsburgh, U.S.A, he called on Washington to lift travel restrictions on citizens from the EU's 10 new member states.

Ireland has reportedly welcomed some 150,000 laborers from the East, while the United Kingdom has seen some 300,000 workers arrive. As a percentage of total workers, Ireland, however, has seen its workforce expand tremendously 's by some 5 percent.

All restrictions on the free movement of labor in the European Union should be removed by 2011.