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Spain Restricts Romanians Job-Market Access to Ease Pressure

July 22 (Bloomberg) -- The Spanish government will temporarily restrict Romanian immigration to those who can show a job contract as the country seeks to ease pressure on its labor market, which has the highest jobless rate in Europe.

“The job market has completely changed since 2008, so the government decided to adopt a mechanism that enables it to require that Romanians coming to Spain to work apply for authorization,” Development Minister Jose Blanco told journalists in Madrid today. Approval will only be given to those who have a contract, he said.

Spain’s Socialist minority government is battling with a 21 percent unemployment rate that threatens the country’s fragile recovery and its ability to rein in the euro area’s third-largest deficit. Exports drove growth in the first half as the most drastic austerity measures in the last three decades weighed on demand.

“The measure is a negative sign for the free-labor movement in Europe,” said Raffaella Tenconi, an economist at Bank of America Merrill Lynch Global Research in London. “It will reduce competition in a country where the rigidity of the job market is already a structural weakness.”

About 800,000 Romanians work in Spain, representing 14 percent of the country’s foreign workforce, Tenconi said.

Adjustment

The right to restrict immigration from the most recent European Union members was designed to enable other EU countries to adjust during a transition period, not to change the rules depending on internal growth while targeting a specific country, according to Tenconi.

The restriction is temporary and may be suspended, depending on how employment evolves in Spain, Blanco said.

Spain can enforce the rule until 2014, after which Romanians will be able to move as freely as other EU citizens.

Blanco said the new rules won’t affect Romanians who are already working in Spain but didn’t specify what would happen to those whose contracts had ended.

To contact the reporter on this story: Angeline Benoit in Brussels at abenoit4@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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