The PDU describes the real debates going on regarding “benefits tourism” and “poverty migration” and reviews possible solutions. By Benjamin Zeeb
In a recent interview with the BBC UK business secretary Vince Cable likened the ongoing debate on „welfare tourism“ to Enoch Powell’s infamous Rivers of Blood speech, saying, “we periodically get these immigration panics in the UK“. He added that politicians had a responsibility to reassure people by giving them the facts. This might be easier said than done. The discussion on „poverty migration“, hotly debated in other European countries as well – most notably Germany, where the German translation of “benefits tourism” (“Sozialtourismus”) has just been voted ugliest word of the year – doesn’t run on just one set of facts.
Two separate debates
There are two separate debates going on at the moment, one about welfare systems and the macro effects immigration has on them. Then there is another hidden debate going on about the cultural effects of migration and the question of how richer EU countries and their way of life are affected by free movement of labour within the EU.
Both sides of the political spectrum, however, have decided to approach the matter in purely economic terms. The political right views this as beneficial because it shields them from the accusation of being intolerant. On the other side the left likes this frame of reference, because it makes it easier to shoot down the right’s arguments that, frankly, don’t make much sense economically.
The case that the freedom of movement within the EU is a liability for the welfare systems has been refuted many times. There is little doubt regarding the net positive effects of the principle and holding back studies confirming this won’t change the facts. Not only are immigrants in both Germany and the UK less likely to receive government benefits than nationals, but they also improve the demographic situation in both countries, thus making the respective systems more sustainable in the long run. As a consequence of Europe’s economic crisis and changing capital flows within the Eurozone, the population of Germany has been growing for the first time in many years. This has even prompted some to claim that a solution to Germany’s long term demographic crisis may be within reach.
There are however some real problems associated with the migration of those who don’t stand chance in the host countries’ labour market. The subject of immigration is a higly emotional one and a huge political factor. If this were strictly a debate on the economics of migration, one could simply dismiss the expenses associated with some immigrants as side costs of a largely beneficial development.
Unfortunately this is not how politics works and as a consequence, poverty migration does in fact present an important political issue that is sure to be one of the most important in the run-up to this year’s European parliamentary elections. In order to prevent Eurosceptics from profiting disproportionately from the fears skepticism typically associated with migration, mainstream politics has the responsibility to address people’s worries. Part of this responsibility includes changing the rules in a way that curbs migration into social security systems as much as possible.
Towards a new Homeland principle?
The current rules grant every European citizen the right to move freely within the EU. While there are limits to the benefits foreigners can claim, there are also ways to get around them. After five years of living in Germany for example, EU citizens acquire unrestricted right of residence and can claim benefits of up to around 1000 € in basic security, accommodation allowance and heath insurance. Again, this doesn’t matter much economically but it does present an incentive for some migrants to take advantage of the system and provides welcome fodder for Eurosceptics. In order to eliminate such constant and significant obstacles to European solidarity, the rules need to change.
One solution that has been suggested is to apply a principle according to which home countries are responsible for social security payments in the case an immigrant falls into unemployment. This would certainly solve the problem for countries such as Germany, the UK or the Netherlands. Not only would it enable them to reap the benefit of productive immigrants it would also release them from the responsibility to take care of unproductive ones. At the same time it would disincentive less qualified Europeans to consider emigrating from their home countries.
Therefore such a plan might look good from the national perspectives of severall richer members.But it would also have catastrophic consequences for newer and weaker members of the EU. Not only would they have to cope with the loss of highly qualified workers, they would also have to sustain a social security system that now becomes increasingly unsustainable.
What to do?
The PDU holds the position that the free flow of capital and the free flow of labour are two sides of the same coin. Therefore restrictions of either, whether it is the creation of a de facto seperate currency in Cyprus or the discussed restrictions of social security benefits in the UK or Germany, go against the fundamental principles of the European idea. We recognize however, that the current system has its flaws and that reform is necessary.
Europe needs to find a solution that upholds the principle of freedom of movement but minimizes the tensions and snares associated with unproductive immigration. The only way to make this happen is by building a common social security system that allocates benefits centrally while tying the levels of compensation to the local costs of living. Under such a system it would not make sense for unproductive immigrants to take upon themselves the hardships of relocating because the higher benefits abroad would be consumed by higher prices. At the same time the implied automatic transfers such a system would bring with it would compensate countries especially hard hit by the emigration of their labour force. Labour movement is a huge factor of European integration. The question is now how to make it work effectively and efficiently.
Image: “ríos de sangre Rivers of blood” by Román P.G. via Flickr under Creative Commons license 2.0.