Future EU enlargements and restricted free movement: lessons from the past

Magdalena Ulceluse*

After more than a decade of stagnation, the European Union (EU) is gearing up for enlargement plans yet again. Only a couple of months after Russia’s invasion of Ukraine, in April 2022, the European Council greenlighted opening talks with Albania and North Macedonia, and by June 2022  granted the status of candidate countries to Moldova and Ukraine, while offering potential candidate status to Georgia. A total of 10 countries are now considered candidates or potential candidates for EU membership, some of which have high hopes of joining by the end of the decade.

The candidate countries present notable socio-economic differences, which, if history is an indicator, will be seen as potentially triggering significant migration towards the new member states. Jointly[i], they are relatively populous and differ significantly in terms of economic development and wages from the current EU member states. Labour markets in the Western Balkans and Türkiye continue to be characterised by overall low activity (especially among women and young people) and employment, high informality and unemployment, and persistent structural skill mismatches. All candidate countries experience high levels of poverty, aggravated by the COVID-19 pandemic, and likely to be exacerbated further by the recent surge in food and energy prices. Given these conditions, how, if at all, should the incumbent member states manage the potential influx of immigrants that the enlargements are likely to trigger? To answer this question, we can take a look at past experiences.

The last two major EU enlargements took place in 2004 and 2007, when the so-called EU10 and EU2 countries joined the block. Fearing a migration shock that could lead to labour market imbalances by pushing native workers out of their jobs, driving down local wages, and burdening their welfare systems, the incumbent member states adopted a series of measures that de facto limited access to paid employment for up to seven years for the new EU nationals. These measures were called transitional arrangements and included a variety of national procedures, such as complex application processes, proof of suitability, work permit requirements, and quotas. Due to a combination of domestic political pressures, economic institutional factors, the positions of other member states and the specific socio-economic context and demand for migrant labour, there was significant variation in terms of which countries chose to implement the transitional arrangements and their degree of restrictiveness. The result was that, in the case of EU10 nationals, the restrictions did not as much as stop immigration flows, but rather created a “diversion effect” within the incumbent member states. The transitional arrangements had effectively diverted flows away from some traditional destinations of migration from Central-Eastern Europe, which had now applied restrictions, to countries which maintained open labour markets (e.g. Ireland and the UK). In essence, the effect and effectiveness of the transitional arrangements had not only depended critically on the specific measures that one member state has implemented, but also on the measures implemented by competing, alternative member state destinations. EU2 nationals, on the other hand, evaded the restrictions by turning to self-employment, which was not subject to transitional arrangements.

From a policy perspective, these developments highlight the need for policy makers to look beyond their own borders when implementing measures that aim to control and influence migration flows and to anticipate how other countries’ policies will interact with their own and affect mobility and labour market decisions. Immigration is driven by strong social and economic forces that are bound to compete with migration regulations. Restrictions do not necessarily stop immigration, but rather affect the channels people choose to enter. As the case ofEU2 nationals and their destination choices teaches us, immigration regulations are not tools effecting categorical closure or openness. They are tools of migration management. What matters is to steer migration in mutually beneficial ways, instead of attempting wholesale approaches that seek to restrict it entirely. The way that they function even if this is intended shows that they are never effective in this way.

In the end, the effectiveness of restrictive measures as tools that enable EU countries to tightly regulate the labour market access and outcomes of nationals from new member states is bound to be limited as well as variable across countries and over time. Therefore, before implementing similar measures following the next enlargement rounds, states ought to know more about their implications for labour mobility in the EU, the ability of migrant workers to find employment in incumbent member states, the employers’ ability to fill vacancies with qualified individuals, and the socio-economic impacts of this (matching) process.

[i] All 10 countries add up to about 150 mil inhabitants, but Turkiye, with over 80 mill inhabitants and Ukraine with over 40 mil, make up much of this total.