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Europe’s insiders and outsiders

Exactly two years ago, the European Union expanded membership from 15 countries to the current 25, welcoming Poland, Hungary, the Czech Republic, Latvia, Cyprus, Estonia, Slovakia, Malta, Lithuania, Slovenia in the Union. While the EU has yet to recover from the NO to the proposed EU constitution in France and Holland last year, I believe ...

By Davide Berretta

May 1, 2006, 6:25 PM

Exactly two years ago, the European Union expanded membership from 15 countries to the current 25, welcoming Poland, Hungary, the Czech Republic, Latvia, Cyprus, Estonia, Slovakia, Malta, Lithuania, Slovenia in the Union. While the EU has yet to recover from the NO to the proposed EU constitution in France and Holland last year, I believe it is fair to say that the enlargement has been a success. As this op-ed on the FT (subscription required) points out, the enlargement

is already bringing conspicuous economic gains to both the “old 15” and the “new 10”. In particular, Britain, Ireland and Sweden, the three countries that opened their labour markets to east Europeans, are reaping the benefits in filled job vacancies. The new members have meanwhile seen their expected increases in EU aid dwarfed by a surprise surge in foreign direct investment, much of it coming from the old union.

There is a subtle irony at play in the fact that such an anniversary should fall on International Workers’ Day, a festivity wholly embraced in Europe by the radical left, and by labor unions in particular. The unions that are celebrating by taking to the streets today in European capitals, are the ones that most oppose any reform of the proverbially generous European labor market, which is in turn widely considered to be the main cause behind the dismal job creation rates of most European countries: if companies can’t fire, they won’t hire. The unions and the left -as recently seen in France– usually succeed in blocking even small reforms.

The ones most suffering from these job shortages are outsiders, those who want a job but do not have a way in the market, young workers and especially immigrants. Now, the central idea behind the European Union is that a free flow of goods and people within the union will benefit all members. But most Europeans (clearly less so in Britain, Ireland and Sweden), and in particular those that celebrate May Day with most fervor, are uncomfortable with the movement of labor across the EU. One of the most successful campaign tactics by those who wanted the EU constitution to be rejected was that of using –as a symbol of enlargement and the constitution– the Polish plumber coming to Western Europe to work, underbidding French and Dutch plumbers and sending them out of business.

So today, a big chunk of Europe is celebrating the workplace rights and priviliges it has earned and defended through the years: it is cherishing its being inside the labor market. On the other side -both metaphorically and geographically- the outsiders are hoping to get inside, in order to have something better to celebrate than the second anniversary of an enlargement treaty.

Davide Berretta is a researcher at Foreign Policy.