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Labour shortage chokes mobility

| Text Björn Lindahl, Carl-Gustav Lindén

Finland has decided to abolish the transition rules for labour from new EU member states from 1 May this year. Norway, Denmark and Iceland have still not decided, while Sweden opened her borders as early as 2004.

The debate on mobility has changed rapidly - not only in the Nordic countries but also in the new EU states. The reason: the main problem in the coming years will be a lack of manpower rather than old EU countries having to deal with a flood of labour from new member states. During a meeting in Oslo, which gathered officials from the Nordic countries, Poland and the Baltics, the Baltic representatives said they were now encouraging their countrymen to return home.

"We want the transition rules to be abolished, but we don't want people to leave - we wish them to take part in the growth that we're experiencing ourselves", said Ine Elksne from the Lithuanian Ministry of Labour.

The Norwegian research foundation FAFO has been following the development in the wake of the EU enlargement and the softening or opening up of labour immigration from new member states. The work was commissioned by the Nordic Council of Ministers.

Since the enlargement, nearly 60.000 work permits have been granted for foreign workers in the Nordic countries. That is not a particularly high figure, if you compare it to Ireland which has taken 125.000 workers from new member states. Norway, whose population is similar in size to that of Ireland, accepted 26,000 - by far the largest number out of all the Nordic countries, Sweden, where there are no temporary limits in place, even saw a slight decline in the number of immigrant labour. This indicates that economic cycles are the deciding factor: not the rules for labour immigration.

Labour immigration from new EU countries consists of both individual workers and foreign sub contractors who bring their own work force. When the European Parliament discussed the Services Directive, which decides which rules apply for the latter type of mobility, the conditions were tightened.

"When choosing a foreign sub contractor means fewer social responsibilities and lower social costs for those who commission work, it is not surprising that many businesses choose to do that rather than hiring new EU-citizens", says Jon Erik Dølvik, responsible for the Fafo report.

He warns of the consequences of a services market which expands at the expense of those who have permanent employment. The most obvious example of this is Finland, where thousands of Estonians work as hired labour. They arrive on express ferries from Tallinn to Helsinki in the morning, and return in the evening.

It's a theme for discussion among the parties in the labour market and the government in Finland. They have made a compromise, in which the transition rules will be abolished while workers from new EU countries must be registered - similar to what is happening in the UK.

"Workers from new EU countries will be registered so that we know who works here, who the employers are and what their terms are, it's a wholesome approach which we can accept", says Matti Viialainen, who represents FinIand's largest trade union, FFC, in the negotiations.

"We always felt the transition period was exaggerated. Now we can employ people directly from new member states", says Riitta Wärn, special advisor to the Confederation of Finnish Industries.




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