How is EU accession going to affect the Czech labour market?

19-06-2003

The Czech Republic's EU entry, as approved by the Czechs in referendum last weekend, will bring about changes in many respects. One of them is the opening of markets, implying free movement of goods, capital and labour. The possibility to work abroad was even one of the main points in the government's promotion campaign before the referendum. Some of the current EU countries are going to limit the inflow of workers from the new member states for a transitional period of two to seven years. The Czech Republic is still hoping to reverse their decision and is considering retaliatory measures. At the same time, the country is ready to protect its labour market against cheap labour from the other central and East European countries. I spoke to the deputy minister of Labour and Social Affairs, Miroslav Fuchs, about the impact of EU accession on the Czech labour market.

"The Czech Republic has around ten percent unemployment rate, which is above the EU average and there is no expectation that the unemployment would increase substantially after our accession because on the other hand, there will be a massive inflow of foreign investment from EU member states which will create new jobs in our country, so we do not expect that there will be only a loss of jobs."

One of the issues discussed is the free movement of labour. It is unlikely that there will be a massive inflow of workers from the West. But can we expect an inflow of workers from the East, say from Poland where the unemployment rate is extremely high?

"To a certain level, this is a speculation, how many people from the East will use the free movement of labour. Today, we have about 55,000 Slovaks and about 6500 Poles in the Czech Republic who have been absorbed by the labour market. We cannot say that there will be no movement after accession - we cannot avoid it. But is it happens that some parts of our labour market, some regions or some sectors are negatively affected by increased inflow of labour force from other candidate countries, we will consider the possibility which was negotiated during our talks with the EU, i.e. the introduction of some transitional periods when movement of labour will not be prohibited but work permission will be required for people from other countries. We will monitor the situation on the labour market closely in our country as well as other, especially neighbouring countries and if the situation develops negatively, we will act. We would like to cooperate closely with other countries like Poland, Slovakia, Hungary and the Baltic states. The Czech Republic will preside the Visegrad Four group in the second half of this year and we are planning to have a meeting to discuss this issue and to establish cooperation, exchange of information on the development on labour markets in all these countries, to monitor flows of people among these countries and try to avoid the introduction of restrictive measures. But this possibility will certainly be considered if necessary."

Is it likely that in some professions Czech workers will migrate to the West, in professions where there is a lack of labour in Western Europe so that these workers will be missing on the Czech labour market?

"The Labour and Social Affairs Research Institute conducted studies in the past two or three years in this respect across the Czech Republic and also in the regions bordering with Austria and Germany, and these studies indicated that workers who migrate from the Czech Republic usually have secondary education, they are not unemployed by really highly qualified people. It is difficult to say but we do not expect some particular profession would decide to move from the Czech Republic. If you remember, two or three years ago, the German Chancellor declared this so-called green cards programme to attract and integrate some 5000 or so IT specialists from abroad. Altogether, 130 Czechs eventually used the opportunity and went to Germany. So, we do not expect that there will be a huge movement from the Czech Republic to EU countries. On the other hand, we have many indications from Austria, Germany, Spain, France that qualified Czech labour force is very much welcome in these countries because of a shortage in some professions on the labour markets of these countries."

Some EU countries indicated they would use transitional periods of limited movement of labour from the new member countries. Is the Czech Republic negotiating better conditions for Czech workers in these countries, like reducing the period of limited movement of labour etc.?

"The negotiations finished in December last year in Copenhagen, the Treaty was signed in the middle of April. The transitional period is an option, not an obligation for the current member states. Some of them will use it, some of them will not. Before the actual enlargement, there will be discussions with the members states on the conditions under which people from the new members states will be able to seek jobs in other countries and under what conditions they will be employed. Each country has its own regulations for granting work permissions, residence permissions etc. All these conditions should be formulated in one package. Certainly, during these discussions we will try to influence the member states that have not decided yet how far they will go with the transitional periods to liberalise the conditions for the Czech Republic. On the other hand, we have to admit that this is a politically very sensitive issue and all the current EU members carefully consider whether and under what conditions they will further liberalise their labour markets. We will negotiate with them and try to achieve as favourable conditions for Czech workers as possible. But we have indications from siome countries that they will definitely use the first two years of the transitional period for their labour markets."

19-06-2003