Monday, January 16, 2006

The fate of all those Polish Plumbers

I had already decided to do this post earlier today, even before I had benefited from the services of a Polish plumber, who arrived (to do a simple job) within 15 minutes of being called, and appears to have solved a small but annoying problem in our plumbing. But how ironic that we should have so benefited and BondBloke and I are accordingly grateful to the UK Government for its sensible decision to allow the free movement of so-called A-8 workers, who can come to the UK freely and take up work (although they are supposed to join the Workers' Registration Scheme and pay £70, but in practice we know that only a minority actually do so). A-8 is euro-jargon for the eight central and eastern European countries which joined the EU in May 2004. Only the UK, Ireland and Sweden opted not to impose continued tight controls on labour immigration after enlargement, and in practice by far the largest numbers have migrated to the UK and Ireland - more than were expected to come, although it is impossible to tell just how many, but it would appear not so many as to have a discernible impact on UK or Irish unemployment figures. Unfortunately the Workers' Registration Scheme has had the effect of reinforcing to A-8 workers, even in the UK, that they are second class European citizens, and it may in the future have a discernible effect upon the size of the black and grey economies in the UK, because the charge of £70 tends to encourage casualisation of employment relationships in an unfortunate way. However, an even better way of reinforcing to A-8 workers that they are second class citizens is to exclude them completely from the benefit of EU free movement rules, which was the option chosen by the other twelve 'old' Member States.

The Commission is supposed to be producing a report in February recommending what action should be taken (although one doubts that Member States will take much notice of the Commission here, but will just take their 0wn decisions instead), but a recent report suggests that even the Commissioners themselves, supposed guardians of the European collective interest, cannot easily reach a decision amongst themselves.

According to EUObserver, "The Austrian commissioner Benita Ferrero-Waldner is leading the camp against a strong recommendation to lift the ban, according to Austrian and Polish media."

Silly me thinking that Commissioners forswore all national allegiance when they took office, for it emerges later in the article that "Austria, which currently holds the presidency of the EU, has reiterated it will maintain the restrictions, with its ambassador to the EU Gregor Woschnagg explaining on Friday (13 January) that Vienna lies within commuting distance of Slovakia and the Czech republic. " Funny that the Austrian Commissioner should agree with this, and funnier still yet that she should wish it to be known in the Austrian Press that she agrees . What with there being an election due in November 2006...

Be that as it may, the fear of destabilising labour markets where, as is reported, Slovakian wage rates are at the level of 20% of Austrian ones is clearly real. On the other hand, three points occur:

- first, all these restrictions are supposed to be removed in full by 2011, not far away and not long enough for wage rates to equalise; clearly a transitional strategy is needed given the fear of the big bang of removing labour mobility restrictions in Mitteleuropa;

- second, the Member States should give some thought to the trade deflecting effects of their long term denial of free movement; not only are they inviting Polish, Slovakian, Lithuanian and other workers into the informal labour market, but they are also inviting other strategies of avoidance. After all, a Slovakian resident and working in Ireland could perfectly easily acquire Irish citizenship after five years, or have an Irish born child after just three (with the latter effectively giving the rest of the family free movement rights throughout the EU);

- finally, the policy seems fundamentally assymetrical; if Slovakians can commute to Vienna, then so can Viennese who find themselves pushed out of their home city by high rents or house purchase prices. OK, so they would have to live (if not work) in a Slovakian speaking environment, but they would enjoy much lower prices and cost of living. This could have a negative impact upon Slovakians if they find themselves in turn priced out of living in their own country by Austrians enjoying cross-border mobility which they do not enjoy. After all, the British have proved adept at taking advantage of lower property prices in France and Spain to establish what could be described as colonies, without making in some cases the slightest attempt to integrate or to consider what negative impacts they might have on the local economy.

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