Saturday, April 30, 2011

Germany and Austria Open their Labor Markets on May 1 to EU Member States in the East Who Joined in 2004: Poland, the Czech Republic, Slovakia, the Baltics, Hungary, Slovenia

As reported by Markus Dettmer and Jan Puhl at the Spiegel Online, the seven-year moratorium on full integration of citizens of the EU Member States added in 2004 by the European Union ends on May 1, 2011. Actually, this applies to 8 of the 10 Member States added in 2004: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia, of which Cyprus and Malta of course are not in Eastern Europe and were exempted from the moratorium.

For the last seven years, citizens of those EU states could not legally reside or work in Germany or Austria, because Germany wanted the moratorium to protect its own workers in a then down-turned economy.

The booming economy in Germany in particular has changed the market for labor dramatically since that time and Germany now, for example, is looking for new sources of labor, as reported in the Spiegel.

Much of the available skilled labor and many of the best IT experts and programmers from those EU Member States have been absorbed in the interim by countries such as Britain, Ireland, Sweden and the Netherlands, so that no one expects a major exodus to Germany and Austria on the 1st of May, "May Day", (which fittingly, is a national holiday in Germany and Austria, indeed, Labor Day, a day traditionally reserved to hold demonstrations on behalf of worker's rights and among much of the citizenry a day on which to take a long walk in nature, or to raise a Maypole (German Maibaum) on village squares throughout the land as a symbol of the returning Spring. It is a day for feasting and celebration.)

Obviously, some specialists in other Western EU Member States will be able to accept better compensation packages in Germany and Austria, but the cost of living is also higher, so that an increase in salary does not necessarily mean an improvement in the quality of life or in purchasing power. Moreover, things in the Member States in the East have also improved in those seven years so that many skilled workers now have no great incentive to leave their own EU Member State just to work elsewhere in the European Union. Western EU industry has come to them in those seven years, rather than vice versa.

As the Spiegel writes:
""This hesitant attitude, based on fears of a possible negative effect on the German labor market, now turns out to have been a huge mistake," says Klaus Zimmermann, the head of the Bonn-based Institute for the Study of Labor. At a trade conference in Warsaw this week, Zimmermann said German companies shouldn't wait for the people of Poland, the Czech Republic and the Baltic states to turn up, but should actively recruit them while there's still time."

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