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Austria and Germany open up job markets to CEE

On 1 May 2011 Germany and Austria will lift all restrictions on the movement of workers from the eight Central European EU member states which joined the bloc in 2004. EurActiv’s media network sheds light on the various expectations and forecasts.

Leading economists agree that Germany will profit from opening its borders to EU newcomers, EurActiv Germany reports.

Experts there do not expect a “flood” of Eastern Europeans or native workers to be crowded out by wage dumping. Berlin officially promotes the opening of its labour market to skilled workers from abroad.

Klaus Zimmermann, head of the Institute for the Study of Labour in Bonn, strongly criticised the previous German restrictions. Qualified professionals always stand for an increase in productivity. Since 2004, lots of Eastern European employees have migrated to more attractive and more liberal countries such as Britain, Ireland or Sweden. According to Zimmerman, Germany has missed out on this potential so far.

Good news for Germany

The opening of the German labour market comes at the right time, according to Michael Hüther, president of the Cologne Institute for Economic Research, who believes Germany will benefit in two ways. Immigrants can help to address the current lack of professionals and help to reduce the impact of demographic change.

The Cologne Institute for Economic Research expects a maximum of 800,000 immigrants to come to Germany in the next two years. Another 400,000 could follow by 2020. As large as these numbers may seem, the figures are not actually very high. Over three million immigrants came to Germany between 1991 and 2000.

According to a study carried out by the Expert Council of German Foundations on Integration and Migration (SVR), almost 60% of Germans support increased immigration of highly skilled foreigners. However, the majority reject the arrival of low-skilled job seekers.

By October 2011 a cross-party initiative (Hochrangige Konsensgruppe Fachkrftebedarf und Zuwanderung) is aiming to put forward ideas for bringing highly skilled immigrants to Germany.

Austria also expects benefits

Austrian experts and employers also expect benefits from the opening of the labour market in Austria. No-one should worry or be fearful, said Christoph Leitl, president of the Austrian Federal Economic Chamber (WKO). Foreign employees will help to address the existing lack of skilled workers, he said.

The Austrian Public Employment Service (AMS) expects most of the newcomers to find jobs in regions such as Vienna, Lower Austria, Burgenland and Styria, in the southeast of Austria. Many of these people are also expected to commute daily between Austria and their countries of origin.

Austrian companies are taking a positive view of the developments. According to a local survey conducted by Trenkwalder, a leading human resources service provider in Central and Eastern Europe, two thirds of the companies interviewed expect benefits from the opening of the labour market. Companies say they are very interested in skilled workers from abroad. Surprisingly, only one third of the interviewees feel well-informed about the coming changes.

No massive influx

In Poland, the largest of the Central European countries concerned (see ‘Background’), no mass migration to Germany after 1 May is expected, experts at the Institute of Public Affairs (ISP) state in an analysis entitled ‘The Poles are coming. Are they really?’.

According to the Polish Embassy in Berlin, some 300-400,000 Polish citizens are expected to find job opportunities in Germany in the coming years. The biggest wave is predicted to take place in the months following the opening of the labour market. No massive influx is expected, however, as to a certain degree the German market has already been open and many Poles have already found work there in recent years.

Draining Eastern labour markets?

Research carried out by the Polish-German Chamber of Commerce indicates that salaries in Germany will not tempt workers to leave Poland. Nevertheless, some employers’ organisations in Poland fear that the opening may prompt workers to leave the country.

According to Pracodawcy RP, an employers’ organisation, labour market liberalisation in Europe has drained the Polish labour market, the Warsaw Voice reported. According to Pracodawcy RP, Germany has been searching for professionals in sectors that are short of specialists in Poland as well.

“We have plenty of job offers for IT specialists, engineers, carpenters and hair dressers in Poland,” Pracodawcy RP insists in a statement. The organisation believes that the opening of the German labour market may have a disastrous effect on Poland’s economic growth and demographics, particularly in border areas.

Hungary and the Czech Republic appear to be the countries with the lowest labour migration rates in Eastern Europe. According to the Czech Ministry of Labour and Social Affairs, the full opening of the German and Austrian market for Czech workers does not represent a turning point in what it describes as the mutual employment of Czech, German and Austrian citizens.

“We are not expecting to see a large number of people leaving,” said Jaromír Drábek, Czech minister of labour and social affairs.

Drábek argued that since 2004 labour markets in other European countries have been gradually opening and the migration potential for Czech citizens has to a large extent been exhausted. Most people who want to work in Germany are working there already, he claimed.

Worker mobility in the Czech Republic is very low compared to other European countries. Some 14,000 Czech workers were working in Germany at the end of 2009 – mostly in construction, mechanical engineering, tourism, public health, agriculture, business and administration.

Positive effect to unemployment?

But in Slovakia, experts say they believe that the opening of the labour markets of Germany and Austria will have some impact on the level of unemployment. The Slovak Labour Authority expects to see increased interest among Slovak citizens in working in both countries, as was the case for other EU member states that have opened their labour markets in recent years.

At the same time, the general expectation is that the numbers are not going to be significantly high, as most of those who want to work abroad have already left and a possible exodus will be hampered by the fact that workers will need to satisfy the rigid requirements of German and Austrian employers (level of education, language skills).

It is estimated that some 130,000 Slovak citizens currently work abroad. Some 18,000 work legally in Germany and 8,500 in Austria. In recent years, Austria has become a popular destination for middle-aged Slovak women, who often work there as carers of older people.

Is German a lingua franca?

For Slovaks, the German-speaking countries are seen as culturally closest to their own. For the older generation, German was a very popular foreign language in primary and secondary schools. Despite the popularity of the English language since the fall of the Berlin Wall, German has been regaining ground.

There is a natural trend among job seekers to seek opportunities in countries where they understand the language. English is widely spoken in the new EU members and it is not by chance that the UK has attracted so many East Europeans, experts say. According to this logic, Germany comes second, they point out.

In Hungary, the main concern lies in the labour shortage in some key sectors, which have already been hit by the economic recession. The country’s employers, especially in public health institutions, will face more competition for labour. However, the impact on Germany is likely to be minuscule, as the second language of many younger Hungarians is now English, not German, and a lot of people who wanted to leave have already gone to the UK, Ireland, the Netherlands and Scandinavia.

POSITIONS

A study conducted by the Austrian Institute for Economic Research (WIFO) found that about 0.4% of the Czech, Slovak and Hungarian working population would be ready to migrate or commute to Austria. Within the next two years the researchers expect between 21,000 and 26,000 foreign people per year to do so. Many of them would be skilled and intend to work temporary in Austria.

Poland’s outflow of workers to Germany as a result of that country opening its labour market may amount to 300-400,000 people within three years, Polish Deputy Labour Minister Marek Bucior said a few weeks ago.

The end of work permit requirements for people willing to work in Germany and Austria this year bears no resemblance to the opening of the British and Irish labour markets, he added, predicting that Polish workers’ emigration would number 10-20,000 people a year.

BACKGROUND

Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Latvia, Lithuania and Estonia joined the EU on 1 May 2004. At first, older EU members introduced various restrictions to their job markets to the citizens of those countries. But over time, most of the restrictions were lifted, Germany and Austria being the only older members to have kept restrictions until the last possible moment the completion of seven years since their accession.

In a similar way, starting in January 2014 seven years after accession there will be complete freedom of movement for workers from Bulgaria and Romania, the latest newcomers which joined the EU in January 2007.

Workers from Bulgaria and Romania currently enjoy full rights to free movement pursuant to EU law in 15 member countries (Denmark, Estonia, Cyprus, Latvia, Lithuania, Poland, Slovenia, Slovakia, Finland, Sweden, Hungary, Greece, Spain, Portugal and the Czech Republic).

But restrictions remain in 10 member states (Belgium, Germany, Ireland, France, Italy, Luxembourg, Netherlands, Austria, the UK and Malta) and typically require Bulgarian and Romanian citizens to have a work permit. The Netherlands recently announced that it would granted work permits to Romanians and Bulgarians only under “exceptional cases.”

By kind permission of Euroactiv

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