Free movement of workers in the EU UK - economic gain through migrants since 2004

Debate about work migrants' effect on GDP

On their accession to the EU, the 10 new member countries faced different interpretations of the freedom of movement of workers from the other EU countries. Most of the original EU countries placed an initial moratorium of 3 years on workers from the eastern European countries being able to look for work within their borders. Under EU law it has been possible to extend the moratorium and Germany and Austria did so twice, each time for a further two years, the so-called 3+2+2 clause. However, a number of countries waived this right and opened their borders to workers from the new member states. These countries were Sweden the UK and Ireland.

Now the National Institute for Economic and Social Research in Britain has released a study, according to reports in the British media, looking at the impact on the British and Irish economies of immigrant workers from countries such as Poland, the Czech Republic, Slovenia and Latvia, amongst others.

The BBC quotes the report as saying "Immigrants from eastern Europe have added almost £5bn to Britain's economy since 2004". The Financial Times in London claims that the report authors see the financial impact as being not very significant. In fact the report concludes that the impact was greater on the Irish economy because of the higher proportion of immigrant workers from the new member countries moving to Ireland compared with the UK.

Interestingly, the report quoted in the Financial Times singles out Germany and Austria as two countries which, lost out financially over the period from 2004 to 2009. Germany might have, in fact, lost between 0.1 to 0.5% in GDP growth.

The opening of the German and Austrian borders and the strong German economy might see workers from the new member states choosing to seek employment in the two countries. However, the BBC quotes one of the report's authors being sceptical of such workers in significant numbers moving to Germany particularly because ties have been formed over the last 7 years in the western European countries.

Germany and Austria open their borders

On 1 May both Austria and Germany opened their borders to workers from the eight EU countries who had faced a moratorium on their right to freedom of movement, granted under EU law, after they entered the EU in 2004. This moratorium was followed by the other old EU member states, with the exception of Sweden, the UK and Eire, but was only renewed in 2007 by some and in 2009 for the final time by Germany and Austria. Bulgaria and Romania, both of whom joined the EU in 2007 have faced similar restrictions which have also been imposed by the UK and Eire and could last until 2012.

Malta and Cyprus were not affected by the original moratorium.