Free movement of labour in enlarged EU and impact on Swedish labour market

Abstract: The goal of this diploma thesis is to expound the term “labour mobility” within an enlarged European Union, and its consequences on Swedish economy. Fears of a massive wave of working migration proved unfounded at the time of past EU enlargements and thus are not likely to come true during the forthcoming enlargement. The analysis of the experience stemming from the southern enlargement can be helpful in an attempt to evaluate gains and losses of the CEE countries integration with the EU. The southern enlargement is being often regarded as an example or even basis for the EU eastern enlargement. This approach is not a random one. The analysis of the EU southern enlargement based on the case of Greece, Spain and Portugal reflects the likeness of the current accession conditions: both the southern candidates and the CEE countries aspiring to join in the 2004 are traditionally net emigration countries with considerable lower level of economic development than those of the EU average. Great differences in income, standard of living and employment opportunities between CEE and EU countries might contribute to a mass-immigration from east to west and might accelerate the current employment crisis in the present EU states. Notably, OECD studies show that migrants form the CEECs tend to be educated, skilled and vital workers. The brain drain problem may be a serious negative side effect for CEECs. What Sweden, as a current EU member, and Swedish enterprise has to puts a stress on, is an importance to create a growing and flexible labour market. A more flexible labour market in general must be promoted, including making it easier for companies to find people with the right skills. Swedish labour market, in spite of how inelastic it may be, has a strong demand for low-qualified labour under any level of unemployment. Even if the CEECs migration potential had been fully used, it would never be able to satisfy this demand. Neither disparity in GDP per capita, unemployment, nor other economic differences between the CEE countries and the EU may create grounds for the implementation of the transitional periods. This causality has been many times proved theoretically, empirically and during the previous EU enlargements. The introduction of the transitional periods may prolong the process of leveling life-levels, technological and economic growth, infrastructure, cultural and social standards within the enlarged EU. It also means sending the political signal to the accession countries, which would be turned into second-class members, deprived of one of the most vital freedoms of the Single Market.