Five more EU countries could open their labour markets to new member states this year

To conclude the Visegrad Four Prague summit, leaders signed a declaration on Saturday appealing to the governments of EU member states who have not already done so, to open their labour markets to workers as of May 1, 2006. But is the opening of labour markets a realistic request and what countries will most likely do so?

Photo: European Commission

We asked a few people in the streets of Prague how they felt about the restrictions still applying to labour movement:

Middle aged man: "I think that it is not good to make some differences between the new members of the European Union and the rest of Europe."

Young woman: "It's a problem I think. It's not... there are a lot of rules and regulations of it, and we must wait for one, two, three years, and I think it will be better."

Older man: "This is not a just policy of the old EU countries towards new EU members. In my opinion, this restriction should be cancelled or terminated as soon as possible."

Peter Havlik is from the Vienna Institute for International Economics:

"I think some of the countries that will liberalise access to their labour markets are Finland, Spain, and Portugal, and perhaps Italy and France - at least concerning some professions. The countries that will insist on a prolongation of restrictive policies are unfortunately Germany and Austria, potentially the most important markets for Czech workers."

One of the main arguments for keeping the labour market closed has been the influx of cheap labour. Is that argument substantial?

"From the economic point of view, economists have argued that these labour market restrictions are not necessary and, in several respects, even damaging. From the 1.5 year membership in the European Union and the examples of the United Kingdom or Sweden clearly shows that there has not been a substantial inflow of workers from the new member states and in cases where workers have come, they filled the jobs which in the UK, for example, would hardly be filled by the local residents.

Photo: European Commission

"The other argument is that the labour market liberalisation is one of the essential freedoms in the European single market, besides the free movement of goods, service, and capital."

So if there really is nothing to worry about, what would you say is the main reason why Germany and Austria are keeping their labour markets closed?

"Well, I think that the most significant reason is political. Trade unions and the population in general in these two countries have fears that indeed there could be an influx of cheap labour, more competition on the labour market, and downward pressure on wages. Here I am fairly sceptical. I know the situation in Austria pretty well and trade unions especially are very strongly pushing for a prolongation of the restrictions."