European Diary: The "Polish plumber" - a potent symbol of cheap labour from central Europe - secured a few more options for working abroad yesterday. After months of speculation, 12 of the original 15 EU member states which imposed restrictions on the free movement of workers from states which joined the union on May 1st 2004, finally told Brussels their plans for relaxing restrictions on migrants.
Spain, Finland, Greece and Portugal all indicated that they would remove the transitional barriers on workers from the eight new member states affected by the rules (workers from Cyprus and Malta were never affected).
Germany, Austria, Belgium, Denmark and Luxembourg all signalled they would not remove the legal barriers, while France, Italy and the Netherlands are considering a gradual relaxation of restrictions over the next three years.
Germany and Austria, two countries where public fears about immigration are among the highest in Europe, indicated they would not consider removing the restrictions during this second phase under the transition period which ends on April 30th, 2009.
It is also possible that the two states could retain restrictions during the third and final transition period, citing a threat to labour market stability, which would enable them to bar workers from central Europe until April 30th, 2011.
Both states are concerned that their close proximity to central European states such as Slovakia and Poland would result in a deluge of foreign workers that could displace existing German and Austrian workers.
The decision by the German government to maintain barriers coincided with better news from Europe's biggest economy, which last week upgraded its growth forecast for 2006 to 1.6 per cent, up from 1.4 per cent. But with unemployment still stubbornly high at 11.3 per cent, which means a staggering 4.69 million German people are out of work, chancellor Angela Merkel had little freedom to change government policy.
An autumn election in Austria ruled out any change to the rules, despite lobbying by a business lobby fearful of labour shortages.
In France, where the phase "Polish plumber" became synonymous with a threat to domestic jobs during the referendum on the EU constitution, there will be some relaxation of the rules.
Paris decided last Friday that restrictions would be lifted for workers in 61 trades from seven sectors of the economy where labour is in short supply. These trades include: pig and rabbit farmers, masons, mechanics and cement makers. The "Polish plumber" did not make the list.
Belgium also followed its larger neighbour by making exceptions for workers in exceptional "bottle-neck" industries where there is a shortage of workers. After talks with trade unions, the government has agreed on a list of professions where work permits would be made available to people from central European states. European employment commissioner Vladimir Spidla welcomed the decision to remove restrictions.
"The vast majority, namely 17 member states of the EU now allow for free movement of workers. Most others have eased the restrictions in some way or the other. This is a very important signal," he said.
With freedom of movement for labour set as one of the fundamental freedoms of the EU, the commission had been lobbying member states to relax the restrictions. Earlier this year it published a report that showed that the three member states - Sweden, Ireland and Britain - which introduced no barriers on labour, had suffered no ill-effects and their economies had benefited considerably from an influx of new labour.
Indeed, the business lobby in Ireland has lauded the effects of the migration of large numbers of central European workers over the past two years. Up to 200,000 workers are believed to have travelled to Ireland to find work, helping to meet labour shortages.
"It is interesting to note that the countries that applied free movement from 2004, Ireland, the UK and Sweden, are also the economies that have subsequently outperformed the rest of the old EU-15," says Ibec's Maria Cronin.
Ireland's decision to relax restrictions was initially popular among the eight new member states from central Europe which felt that states erecting barriers to labour were creating a two-speed EU. But recently politicians in Latvia and Poland have expressed concerns about the brain drain of their brightest young people to western Europe.
The Mushroom Covenant, a book reflecting on the unsettling effect of migration to Ireland from Latvia, has become a bestseller, and there are now fears that the decision to relax restrictions on movement of labour will compound the problem.
But the decision by Finland, Portugal, Greece and Spain to lift restrictions on central European workers is unlikely to lead to significant extra migration. Sweden has accepted about 15,000 migrants in the past two years, the relatively small number probably being due to the difficulties of coping with the language barrier. And few economists predict a massive change in migration flows due to the distance between the states opening their borders.
A far bigger challenge for all 25 EU states will be whether to allow Romanian and Bulgarian workers to travel and work in their countries when they join the EU, most likely on January 1st, 2007.