Labour mobility has overall positive effects

EC Vice-President Valdis Dombrovskis

The impact of the EU mobile workers on public finances, the role of taxation in supporting economic growth and the preparation of the April G20 and IMF meetings were the subjects on second day’s agenda of the Informal Ecofin that took place in Bucharest on 6 April.

Commenting on labour mobility, EC Vice-President Valdis Dombrovskis said that freedom of movement of people is one of the founding principles of the Single Market and a cornerstone of European integration. According to him it has provided European citizens with great opportunities and helped create a sense of belonging to the Union.
He also underlined that while mobility has overall positive effects, when it is of a long-term nature it also leads to permanent changes in the quantity and possibly the skill composition of the labour force. “Brain drain is a real concern in some countries and large outflows can create skills and labour shortages in a number of sectors. On a larger scale, and depending on the specialisation of a national or regional economy, even a ‘hand drain' of more manual occupations may be a source of concern”, he added.

Vice-President Dombrovskis pointed out as well that in receiving countries, some perceive EU mobility as a cause of unfair competition and downwards pressure on wages and on the availability and quality of public services. Such perceptions are not always grounded on real evidence, but we need to take these concerns seriously, the Commission VP asserted, noting that reducing disparities and stimulating economic convergence within the European Union remains the main way forward to ensure that we reduce the push factors which are driving migration.

 “Mobile workers abroad contribute to the GDP of their home country. For years, that was the case of Romania, too. However, labour mobility can also have negative effects. This is the case when mobility is selective, leading to brain drain and hampering potential growth. In the near future, our priority should be finding a common solution at European level and implementing an instrument to help us tackling this issue”, said Eugen Teodorovici, Romanian minister of finance, chair of Informal Ecofin.

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