With unemployment remaining high in Europe for the foreseeable future, the largest economies in the European Union will increase their efforts to restrict the arrival of foreign workers. In Europe's core, governments are under increasing pressure from nationalist parties and populations to limit the arrival of workers from Central and Eastern Europe. In the periphery, the arrival of refugees from the Middle East and North Africa is creating similar tensions.
Under the current legal framework, members of the European Union cannot stop the free movement of people within the continental bloc. As a result, EU countries are increasingly resorting to administrative means to make such movement more difficult. In the short to medium term, efforts to control immigration will remain focused on administrative restrictions. However, recent moves by France to apply additional controls on the arrival of workers from other EU member states highlight a trend that will become more frequent in Europe in coming years: directly challenging the free movement of workers within the European Union.
On Dec. 9, EU labor ministers gave initial approval to tighter controls on hiring cheap, temporary workers from elsewhere in the continental bloc. In recent months, France criticized the abuses in the hiring of "posted workers." Under EU rules, workers may be posted abroad for up to two years to carry out a specific job (for example, a service provider may win a contract in another country and send its employees there to carry out the contract). The posted workers must respect the labor rules of the host country, but social security charges remain those of the home state. Because of this, in many cases the posted workers are cheaper than local workers.
The posted workers program was created in 1996, when the European Union had only 15 members and had not expanded its membership to countries in Central and Eastern Europe. Even then the program created controversy because posted workers are generally not unionized and their wages tend to be lower than their local counterparts'. With the European Union's expansion to the east between 2004 and 2007, the program generated renewed criticism, this time regarding "labor dumping," since the workers coming from the new member states were cheaper than their Western equivalents. The ongoing economic crisis in Europe has prompted another round of criticism of the system, this time from France.
According to the French government, fraudulent arrangements related to posted workers take place all over the French territory, most notably in sectors such as construction and agriculture. For example, the French government has said contractors and outsourcers sometimes use multiple subcontractors, which in turn hire workers illegally in other EU member states. In other cases, foreign subcontractors do not respect the French pay and working time rules. Under French pressure, EU labor ministers agreed to force companies to provide more documentation to prove that the contracts for foreign workers are legitimate. The ministers also decided that subcontractors in the construction sector would be liable through the company that employs them. These measures go to the EU Parliament for approval in early 2014.
The situation of posted workers is not particularly important from an economic point of view, as roughly 0.5 percent of those employed in the European Union fall into this category. In a recent report, Paris said the declared number of posted workers in France (mainly from Poland, Portugal and Romania) rose 23 percent this year, to more than 200,000. Despite this growth, the total number of posted workers is still negligible when compared to the country's 25.7 million employed workers. But in the context of rising unemployment and a stagnating economy, it has become a very sensitive political issue for Paris.
Politics and Immigration Policy in France
Early this year, French President Francois Hollande promised that the unemployment rate would contract before the end of this year — a promise that he is unlikely to be able to keep. Additionally, the recent rise in popularity of the nationalist National Front highlights the increasing attractiveness of anti-immigration rhetoric in the country. The National Front often criticizes the presence of cheaper foreign workers in France's north and south, the two regions with higher unemployment rates and where the party is particularly popular. French unions also criticize the abuse of the posted workers system, which often allows foreign companies to win tenders in France because they subcontract cheaper workers from abroad.
France will hold municipal elections in March, and EU members will hold elections for the EU Parliament in late April. In both elections, the National Front is expected to have a relatively good performance, challenging the country's mainstream parties in many municipalities and increasing its representation in the EU Parliament. In recent months, the Elysee pushed for a revision of the posted workers program, hoping that the changes would be applied before the current EU Parliament is dissolved in mid-2014.
France's recent moves come amid a struggle for the country to reduce its high labor costs, which make the French economy less competitive than powerful neighbors such as Germany. In recent months, Paris has criticized Germany's strong trade surplus and pushed for the introduction of a blanket minimum wage in Germany.
The Elysee's moves also happen at a time when other members of the European Union are worried about the potentially negative effects of the free movement of people within Europe, one of the founding principles of the European Union. In late November, the United Kingdom announced more controls in the payment of unemployment benefits for foreign workers. On Dec. 9, two of the largest cities in the Netherlands, Rotterdam and The Hague, announced plans to deny tax or social security numbers to Romanians or Bulgarians who fail to pass housing and employment controls. Both countries have large anti-immigration parties (the UK Independence Movement in the United Kingdom and the Freedom Party in the Netherlands) that are putting political pressure on moderate parties to apply anti-immigration policies.
Immigration Pressures in the Periphery
Immigration is also a very politicized issue in the European periphery. The European Union's geographic position and high standards of living make it an attractive destination for African, Middle Eastern and Eastern European immigrants. According to the European Council of Refugees and Exiles, around 1.5 million of the world's 16 million recognized refugees currently live legally in Europe. Several million more immigrants live illegally on the Continent.
EU members often criticize Greece for its inadequate border controls, which allow illegal immigrants to enter the country from Turkey and the Western Balkans. More recently, high levels of instability ranging from violent unrest to full-fledged civil wars in North Africa and the Levant have led to an increased flow of immigrants into Italy and Bulgaria. In some cases, these immigrants use countries along the European Union's external borders as entry points with the goal of moving into the bloc's largest economies. Because of the Schengen agreement (which eliminated border controls among most European nations), once immigrants have entered the EU territory, they can move almost freely within the Continent. However, these immigrants often do not have the resources to keep moving and end up staying in the countries where they first arrived. This is already creating tensions in Bulgaria, which is coping with increased immigration amid a severe economic and political crisis. Recent opinion polls suggest that the Bulgarians think their country is receiving too many Syrian refugees.
Countries in the periphery are currently focusing on getting more funding from the European Union to cope with refugees.
These countries' longer-term hope is that countries in Northern and Western Europe will accept reforms of the bloc's refugee policies, which currently state that the country a refugee first enters is responsible for the refugee. In the short to medium term, the European Union's response to this issue will focus on providing more funding for refugee centers, strengthening border patrols and enhancing the networks for data sharing among member states. But a revision of current EU policies on refugees seems unlikely anytime soon.
European governments understand that current EU legislation makes it impossible to stop the arrival of workers from other EU member states and ultimately to block the free movement of people within Europe, so they are focusing their efforts on making it harder and more regulated. In the coming years, there will be further administrative measures designed to discourage foreign workers by, for example, limiting their access to social benefits. However, even if tighter controls are approved, enforcement is likely to remain a key problem. Additionally, countries in Western Europe will keep delaying the accession of Romania, Bulgaria, Cyprus and Croatia to the Schengen zone.
These proposals will generate tensions between western and eastern members of the European Union because countries in Central and Eastern Europe will feel alienated by their Western partners' efforts to limit their access to labor markets in the most developed economies. Despite these tensions, Brussels is unlikely to substantially reject these efforts to make the administration of the free movement of workers within the bloc more transparent. In the long run, however, these moves threaten the continued free movement of people within Europe, one of the fundamental pillars of the European Union.