Monday, August 22, 2011

Spain slams the door on Romanian immigrants

In a surprise move last week the EU said it would allow Spain to restrict the number of job-seeking immigrants from Romania. This is the first time any EU country has sought to keep out workers from another EU country since Europe introduced an open borders policy. This is hardly "Fortress Spain" - the nearly 900,000 Romanians already in the country will be unaffected and the restrictions will last only until 2012. Is Spain right to take this step? Should Britain follow?

The justification given for the move is that the number of Romanians "was distorting the labour market". Spain's unemployment rate is now 21% and its job market cannot supply enough jobs for locals never mind the 5 million foreigners in the country legally plus who knows how many illegally. Already 30% of the Romanians in Spain are unemployed.

Sounds like an open and shut case but there is more to it. During the boom years immigrants were welcomed with open arms by the construction and agricultural sectors particularly when they were doing jobs Spanish nationals were turning their noses up at. They were not exactly "stealing" Spanish jobs. Also there is more than a hint of scapegoating about the move. Spanish unemployment has always been high because of a dysfunctional system which discourages legal job creation and because of the disastrous consequences of joining the euro, not because immigrants came to make an honest living during the boom.

While I think it is a classic case of “too little too late” I think Spain is right to seek to limit the inflow of Romanian jobseekers. By all accounts the benefit system is very sketchy and ungenerous in Romania and wages for those in work very low. That explains why so many are prepared to travel throughout Europe in search of a better deal but it is hardly fair to local jobseekers in countries where jobs are scarce anyway. And Spain has no right to send back any surplus migrant workers so as their economy has soured they have been left with hundreds of thousands of foreigners on benefits at a time when they are under massive pressure to reduce state spending.

As for Britain similar questions have been asked for years about how this free movement of labour through the EU is supposed to work when some countries have much more generous welfare systems and more open labour markets than others. The result for the UK has been that almost all jobs created in the last decade have gone to foreigners, mainly Eastern Europeans, and there has been a massive strain on public services and housing.

But the answer isn’t to blame immigrants or necessarily to place limits on their numbers particularly when they are often taking up jobs that locals will not do. Root and branch reform of the benefits system should come first, particularly the areas that are most abused and reduce the willingness of people to work, like housing benefit and incapacity benefits.

From our website: Spanish non resident tax

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