Commentary: The EU Is Choking Off Its New Blood

Barring workers from new member states will only prolong economic stagnation

When George W. Bush recently proposed legalizing the status of up to 9 million illegal immigrants residing in the U.S., it reminded some Europeans of just how differently Americans approach the idea of pumping fresh blood into the workforce. "If any Prime Minister in Europe stood up in Parliament and announced something like that today," says Denis MacShane, Britain's Europe Minister, "he'd be dead in the water."

That sense of political expediency, paradoxically, is leading Europe's political leaders to shoot themselves in the foot, an area where they have few equals. Immigration fear is driving the region to miss out on its biggest chance for an energy infusion in years.

It's glaringly obvious that Europe's top priority is reversing its dismal economic record. Over the past decade, the euro zone's average annual growth rate has clocked in at an anemic 2.1%. So the idea of eight raring-to-go nations of ex-communist Eastern Europe entering the EU as full members on May 1 ought to be great news for growth. All those youthful, well-trained Czechs, Poles, and Latvians -- what better way to turbocharge Europe's aging, cosseted workforce?

Not if European politicians can help it. One by one, the Old Europe countries of the EU are slamming the door on the workers of the New Europe. When membership agreements were being negotiated with former East Bloc countries last year, EU countries were allowed to restrict, for up to seven years, the right of new EU citizens in the east to work and live freely in the west. But this was done at the particular insistence of high-unemployment Germany and Austria, and for a while they were the only ones to plan immigration barriers.

Yet with the May 1 enlargement fast approaching, countries that once prided themselves on open immigration policies are doing an about-face. Across slow-growth, high-unemployment Europe, fears of being overrun by immigrants are rising. In mid-January, the Netherlands cut the number of new work permits to just 22,000, while in Denmark, East European workers will now face a two-year wait for permits. Even Swedish Prime Minister Goran Persson -- a center-leftist who last year pledged not to restrict immigration from the east -- has not been able to resist anti-immigrant feelings at home. On Jan. 30 he announced that Sweden, too, would refuse entry for workers from the EU's new members. And in France, where regional elections begin on Mar. 21, the extreme-right National Front has been gaining in polls, thanks in part to its strong anti-immigration rhetoric. "With 4 to 6 million unemployed in France, we should be retraining our people rather than giving jobs to immigrants," says Louis Aliot, campaign director for National Front candidate Marine Le Pen.

Such barriers make no economic sense. Already, the relatively low level of inter-European labor mobility means that Continental economies can't respond flexibly to macroeconomic shifts. When a downturn hits northern Germany, for example, few workers relocate to more vibrant Holland next door. So despite its single market and single currency, much of Europe remains stuck in a slow-growth rut.

Erecting barriers against the east merely reinforces the inertia. And it sends a particularly nasty message to the new members of the club: that they are second-class citizens. "European promises about open access amount to nothing," says Istvan Szent-Ivanyi, the head of the Hungarian Parliament's European Integration Affairs Committee. "What's happening now is hitting the credibility of pro-European forces around Eastern Europe."

The final irony is that the growing Western European fears of a tidal wave of immigration are almost surely unfounded. An exhaustive European Commission study released in late February projects that at most, around 220,000 citizens from new member states will be relocating every year to the west over the next half-decade -- hardly a gigantic shift in a union of 450 million people. So in the end, European leaders are just pandering to fears. "What kind of Europe are we talking about that can't absorb these workers?" asks Italian economist Renato Brunetta, a member of the European Parliament. "It's a shortsighted, egotistical Europe." It's a low-growth Europe, too.

By John Rossant

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