EU still at odds over free movement of labour

While Czech politicians have been doing their best to speed up their country's accession to the European Union, the 15-nation bloc is still unable to resolve disputes that could imperil its eastward enlargement. And as Vladimir Tax reports, one of the most intractable remains the free movement of labour, guaranteed under the EU's Schengen Treaty. Vladimir Tax reports.

At the end of last week, top representatives of the Czech Republic's main political parties agreed to avoid political disputes to make sure the Czech political spectrum appears united in their effort to join the EU. How long their promise will be kept in practice remains to be seen, but the concerted effort comes at a time when the EU itself is still struggling to find a satisfactory compromise on a very painful issue - the free movement of labour.

EU members bordering on the candidate countries, especially Germany and Austria, are worried about wage competition and labour market disruption if eastern European workers are allowed to enter the market en masse. The two countries have been calling for a substantial transition period of five to seven years for the free movement of labour in an enlarged Union.

Monday's EU negotiations in Brussels did not lead to an agreement, although 14 out of the 15 members have agreed on a compromise solution proposed by Sweden - a two-year transition period with the option to prolong it if necessary. The only opponent is Spain, which is convinced that workers from Eastern countries should be able to seek jobs freely as soon as they join the EU.

Spain, one of the poorer EU members, is worried that it will lose some of the subsidies it receives from EU funds after enlargement, as the funds are diverted to new members with lower standards of living such as Poland and the Czech Republic. Analysts say Spain is using its position on the free movement of labour as a bargaining tool to retain access to generous EU regional funds.

Most politicians in the candidate countries are presenting the EU as the only alternative for the future. But observers warn that such barriers on the EU side, as well as predictions of harmful economic effects of increased competition after accession, will only play into the hands of the Eurosceptics.