Brexit will deepen the fault lines within the EU over mobility

Tuesday, 12 July 2016

Much has been made of the divide that opened up in 2015 between eastern and western member states as a result of acrimonious discussions on how to handle the refugee crisis and distribute asylum applicants across the EU. Against the prevailing political sentiment in certain member state capitals, Germany and France pushed through a plan devised by the European Commission to relocate 120,000 refugees, by a qualified majority vote in the Council. Rather than creating an east/west divide, however, the vote split the group of (relatively) new Central and Eastern European countries (CEECs) of the EU into two factions: Romania, Czechia, Slovakia and Hungary voted against the plan, whereas several other CEECs, namely Poland, Bulgaria and the Baltic states, joined the controversial motion on the side of the other (northern, southern and western) member states. Finland abstained. Few member states have shifted their positions in the meantime. If anything, in fact, they have coalesced among the Visegrad 4, following a change of government in Poland; and they have hardened, as a result of new proposals by the Commission to fine member states that refuse to accept refugees. With Hungary’s referendum on the Commission’s relocation scheme scheduled for October 2nd, tensions are set to intensify even further.

Recent comments by Prime Minister Manuel Valls that France will stop complying with the posted workers Directive if it is not revised (according to French taste, one supposes) may have added fuel to the fire. It is no secret that the positions in the Council over the proposal for a targeted revision of this Directive, presented by the Commission in March 2016, have split the EU roughly down the middle. Some of the ‘new' member states in particular see no need to change the Directive, because they fear that it will become harder to deliver cross-border services to ‘old’ member states; while some of the latter do not think the proposed revision goes far enough in limiting – perceived or real – unfair competition from the proverbial Polish plumber (Barslund & Busse, 2016). These stark differences in opinion can be traced back to the adoption of the enforcement Directive concerning the posting of workers prior to the European Parliamentary elections in 2014. In fact, it is safe to assume that many of the ‘new’ member states never signed up to the priority of ‘fair mobility’ adopted by the Juncker Commission. It will be difficult to align positions. Meanwhile, negotiations seem to be going nowhere – and they surely are no priority for the Slovak Presidency. If no agreement is reached this year, the posted worker debate will come back with a vengeance in the campaign leading up to the French presidential elections in April/May of 2017. This is already causing worries in Brussels: if all member states start to apply free movement rules discretionarily, then the EU will quickly falter.

Enter the Brexit debate. With the ‘leave’ vote winning in the UK referendum last month, another planned ‘fudge’ around labour mobility rules is off the table, namely the deal on restrictions of welfare benefits made as part of the negotiations in the context of the February European Council (Weiss & Blockmans, 2016). The fact that this deal has been binned should in principle be welcomed by the ‘new’ EU member states. While the battle around the labour mobility package (to be launched by the Commission in autumn) is in principle wide open, it is nevertheless highly unlikely to be resolved any time soon. Several countries, led by Germany, have been very vocal on the exact same issues as the UK: curbing the exportability of social benefits and limiting the aggregation principle — which basically states that e.g. employment spells in other EU countries count towards eligibility of social benefits in the country of current residence (Barslund & Busse, 2014). These countries may well wish to recycle this part of the February deal when they get the chance, thereby clouding newer member states’ prospects of steering the labour mobility package in their favour.

The question of how to handle the fallout from the UK referendum is creating still other fault lines. Shortly after the six founding member states met to discuss the outcome of the referendum, the Visegrad group met in Poland to align positions. Beneath the veneer of unity displayed by the EU27 just a few days later in the context of the European Council on June 29th lay deep divisions on how to move beyond Brexit and reform the EU. Poland, Slovakia and Hungary have pleaded for ‘radical’ treaty reform to give back control over the EU to the member states. Germany and France have joined others in calling for a period of reflection to come up with ideas to give European citizens more ownership in ‘their’ Union without undermining the EU’s capacity to act.

While the treatment of the UK in exit negotiations proper may turn out to be less of a ‘new’ vs. ‘old’ issue (with smaller Nordic countries likely to rally around keeping the UK close), many Eastern European countries are deeply concerned to ensure that their citizens’ receive fair treatment in the UK once the Brexit vote is translated into official policy. Musings by Italian premier Matteo Renzi about giving EU passports to young Brits, meant as a stab against the UK, has certainly caused few laughs east of Berlin.

Going by the acrimony that has been building up over the refugee relocation scheme, the posted workers Directive and the mobility package, the fallout from Brexit has the potential to create even deeper splits between the member states. It is therefore a fair prediction that the coming year will see few occasions when smiles are aligned across all EU27 members.

 

References

Barslund, M. and M. Busse (2014), Making the Most of EU Labour Mobility, CEPS Task Force Report, CEPS, Brussels (www.ceps.eu/publications/making-most-eu-labour-mobility).

Barslund, M. and M. Busse (2016), “Labour Mobility in the EU: Addressing challenges and ensuring ‘fair mobility’”, CEPS Special Report No. 139, CEPS, Brussels (www.ceps.eu/publications/labour-mobility-eu-addressing-challenges-and-ensuring-%E2%80%98fair-mobility%E2%80%99).

Weiss, S. and S. Blockmans (2016), “The EU Deal to Avoid Brexit: Take It or Leave”, CEPS Special Report No. 131, CEPS, Brussels 23 February (www.ceps.eu/publications/eu-deal-avoid-brexit-take-it-or-leave).