”A policy of freedom for the individual is the only truly progressive policy,” said once F. A. Hayek, Nobel Prize winner in economic sciences. Free movement of workers, capital, goods and services is an economically sound policy benefiting individuals and societies the most. Free exchange of goods and services, exploitation of competitive advantages, has already won the debate against protectionism and mercantilism and put the EEC train to reach the common market. Free movement is Europe’s choice made 50 years ago – “and one internal market is at the end of the day beneficial for everyone - for every member state and for the consumer and for the business world,” reiterated Competition Commissioner Neelie Kroes recently.

 

The Commission, the guardian of the treaties, has an obligation to push economic integration forward. In its recent assessment of intra Community migration after the enlargement, the Commission concluded that migration has had a positive effect on the EU-15 economies, since it increased the employment in the receiving countries. It also admitted that the EU-10 workers have a complementary role in the labour market and do not burden social security systems of the EU-15. The Commission recommended lifting the barriers: „Be proud and take advantage of the sheer energy, dynamism and hard work that people from the new member states bring,“ Trade Commissioner Peter Mandelson said.

 

The Commission’s opinion is supported by basic economic logics. Protection of local workers against the competition results in higher prices for goods and services paid to local high-cost service providers and producers. The Polish plumber serves as a successful example of that. Consumers are forced to pay more for services, which could be cheaper otherwise, and could have more money to spend to satisfy other needs. Shielded from foreign competition, service providers have little motivation to improve. Consumers in the UK, Ireland or Sweden are happy with cheaper and higher-quality construction workers. Illegal migrants suffer from barriers as well. Since they become engaged in illegal, often criminal labour, they cannot use healthcare or social security schemes, and illegal workers have fewer incentives to re-emigrate. Keeping the barriers is protecting a small group of workers against the consumers and other workers – a politically attractive, but economically unsound policy.

 

Countries unwilling to remove the barriers, for example, Germany or France, admit the problematic situation of their economies and take necessary but unpopular measures, like Hartz IV reform in Germany reducing unemployment benefits or the First contract law, currently under fire in France. Both measures aim at boosting employment and growth – they increase labour market flexibility and reduce incentives to remain unemployed. Lifting the restrictions for migrants from the EU-15 goes the same direction, as the Luxembourg’s Prime Minister Jean-Claude Juncker put it: “We know exactly what to do, but we do not know how to win the next elections after we have done it.” Migrants do not pose threat to structural problems that the countries posses – red-tape difficulties to run a business, high company profit and personal income taxes, unemployment benefits reducing motivation to works, etc. Moreover, Germany, Italy or France, with negligibly growing economies, are not as attractive to migrants, as compared to easier targets – the UK or Ireland.

 

Barriers to free movement of workers are anachronisms if compared to the advanced free movement of goods. Praise for the free movement of goods, when at the same time promoting superficial threats posed by movement of workers, reveals a short-sighted approach to economic integration. Free movement of goods, especially thanks to the inapprehensive stance of the European Court of Justice, is a cherished but sometimes unnoticed economic reality. It was the Court that paved the way for the free movement of goods in the 70s. As the Commission often remains unheard when advocating to the national governments for a freer flow of workers or services, the hope remains that the Court would look into the letter and spirit of the Treaties and will foster the remaining freedoms with its binding force.