Free movement of people and UK/EU renegotiation

On the day on which George Osborne started talks on the potential renegotiation of the UK’s membership of the EU with some Member States’ governmental officials I found an interesting analysis of one of the elements at the core of the UK’s demands, namely the “free movement of people and workers” in the EU.

As is no mystery by now, the UK government wants to reduce the number of EU nationals coming to live and work in the UK. But as people versed in EU law know this is virtually impossible as that freedom is one of the four fundamental freedoms on which the EU is built on.

The analysis made by Sonia Sodha (freelance policy consultant) published today in the BBC news page is sharp, to the point and has the potential to initiate a true and honest debate on what is (or will be) really at stake when British vote in the referendum on the EU membership.

I would like to add a few thoughts on facts that Sonia did not emphasise – maybe on purpose – in her analysis. As she mentions, and contrary to common perception, the European integration project commenced in the 1950’s was not only economic, it was meant to be a political one as well and that is where it is headed 60 years later. In the origins the idea was to create the “United States of Europe”. That clearly denotes the political aim it was supposed to pursue and that we saw materialised in the Treaty of Maastricht and further strengthened with each subsequent Treaty amendment.

If I were to pick a date on which it all started going downhill for EU immigration in the UK I would pick 1 May 2004, the date on which the EU wnet from having 15 Member States to 25 and the borders were automatically open for nationals of the new 10 Member States. However, considering the potential negative effects on Member States’ individual economies some restrictions were permitted for those countries that wanted to institute them. It must be stressed that only Ireland, the UK and Sweden opened the borders immediately. Therefore, it was not surprising to discover that immigration numbers from these new Member States soared in the UK. The UK reacted fast and did not go down the same route in the enlargement 2007 (Bulgaria and Romania) but one could say that the damage was already done. Should the UK have restricted – at least temporarily – immigration in 2004 maybe the market would have reacted/adapted differently and public perception would not have been so negative.

Having said that, London would not [then nor now] work efficiently without EU migrants as those contribute to the UK economy not only with knowledge, experience and language skills but also many times working long hours and taking up jobs that nationals are unwilling to do “as they can claim benefits instead” (eg council houses, unemployment benefits, etc.). I do not know any EU citizens living in London that have claimed or are claiming any kind of benefits. In fact, many of those are paying the highest tax rates which, oh …what a surprise, help pay for the council houses, free NHS, unemployment benefits of UK and non-UK nationals, etc. Sonia points in her analysis that David Cameron has argued that the UK’s benefits system makes the UK particularly attractive because, unlike most benefits systems, rights to benefits are based on someone’s needs, not contribution over time. However, the potential cut in benefits – should it become a reality – is not deemed to have a big impact (nor be a deterrent) as “fewer than one in five migrants from Eastern European Member States claim in-work benefits”.

Now, focusing on the renegotiation topic, if the outcome of the Switzerland’s experience is applicable here, the renegotiation is unlikely to go down well with EU leaders (no matter whether Osborne convinces or not any number of other Member States’ ministers). Switzerland is not an EU Member State but applies EU fundamental principles and legislation by virtue of having signed the European Economic Area Agreement. Last year, the Swiss voted in a referendum to introduce quotas for EU migrants and the response from the EU was harsh: the Swiss cannot introduce quotas without losing big time in other areas. That outcome is probably why Cameron is not proposing immigration quotas but focusing on making the UK a less attractive destination to live and work.

In the particular case of the UK “the real driver of people, let’s say coming from Bulgaria to Britain, is the massive difference in average wages. Their average wage is less than a third of our minimum wage. If I were a Bulgarian or a Romanian or a Pole, I’d be in London right now. […] But that’s not about benefits. Benefits make it a little bit more attractive, but really the basic minimum wage drags people here from across the whole continent” (says Davis Davis Conservative MP for Haltemprice and Howden).

So the EU response to the debate we are witnessing in the UK on freedom of movement could turn out to be a dangerous one – that not only determines the UK’s future in the EU, but which also has (potentially catastrophic) implications for the future of the EU itself.

Finally, a few words on the France-UK meeting held today. According to the BBC, during the meeting Mr Osborne and Mr Macron [his French counterparty] talked about “a win-win approach” on Britain’s proposed reforms of the EU. We want a Europe that works for all its citizens, said Osborne, adding that France agreed the interests of non-eurozone countries like Britain should be protected. His French host was keen to emphasise the need for reform. “I think we have the basis of a common agreement,” Mr Macron said. “France wants reform that strengthens Europe, not reform that weakens it. But I’ve heard nothing today that was incompatible with that.” The devil will be in the detail of those reforms. Broad agreement on the need for reform is one thing and getting 28 Member States to sign up to specific measures quite another.

I find difficult to believe the outcome is as positive as it is portrayed and perceived at first sight…… when I read the words carefully I notice more reticence than outright backing of the idea.

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