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October 2003 Volume 10 Number 4

EU: Asylum, Immigration, Guest Workers

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With the rotation of the presidency of the EU Council of ministers,
Italy's center-right prime minister Silvio Berlusconi assumed that
position on July 1, 2003, and soon put reducing unauthorized
migration near the top of the EU's agenda. He is seeking to reduce
illegal immigration by securing the cooperation of sending and
transit countries in enforcement efforts. About 1,000 unauthorized
foreigners a month arrived in Italy in 2003, down 40 percent from
2002; about 5,000 non-European Union migrants a month were expelled.

Ireland holds the EU Council presidency the first half of 2004, and
the Netherlands the second half.

The EU in October 2003 agreed to draw up a list of safe countries
from which applications for asylum could be handled in an accelerated
manner: Germany, UK, Finland and Denmark already have such a list.
Eventually, the EU wants to develop another list of safe third
countries, so that applicants who passed through them en route to the
EU could be returned to them to apply for entry to the EU. The EU is
also moving toward a border control agency, with Germany
co-coordinating joint operations on land borders, Italy at
international airports and Spain and Greece at the maritime borders.

The EU is struggling to deal with foreigners who are not refugees,
but who are in need of "subsidiary protection," as when foreigners
whose asylum applications are rejected cannot be returned to their
countries of origin because of armed conflict or systematic
repression. In September 2001, the European Commission proposed that
EU-member states give subsidiary protection to such persons, with the
same entitlements to employment and welfare as refugees. However,
many member states have rejected this proposal, arguing that it would
give foreigners an incentive to destroy their documents and claim
that they were from a country to which returns were impossible.

To prevent "asylum shopping," Dublin II rules that went into effect
on September 1, 2003, require EU states to respond to a request from
immigration authorities in other EU states for information on asylum
seekers within six weeks. Dublin II introduces a "tolerated illegal
presence" criterion for transferring foreigners from one EU state to
another. If an asylum applicant has been living unlawfully in
another member sate for five months or more, she/he can be
transferred to that member state.

The EU and member countries are signing readmission agreements to
expedite returns. However, countries such as Albania, Pakistan and
Ukraine want "compensation" for facilitating rather than hindering
returns in the form of more foreign aid or temporary work visas.
EU-member states were to have implemented by December 2002 an EU
directive that acknowledged mutual recognition of expulsion
decisions, so that a foreigner turned down in one EU state could not
apply for asylum anew in another.

The Economist estimated that there were 12 to 15 million
"poor-country immigrants" and their descendents in the EU, that they
arrived "fast" and in large numbers, and that they are not being
integrated successfully. Getting natives to be less prejudiced won't
work, the argument goes, because natives have "solid reasons" for
complaining about foreigners who refuse to work, learn the language
and respect local customs and traditions. The Economist concludes
that EU nations need "active integration policies" so that they do
not wind up with un-integrated minorities actively opposed to
national government goals.

Immigration. Former French President Giscard d'Estaing led an effort
to produce a "constitutional treaty" for the EU in June 2003 (A
constitution is adopted by states, while a treaty is an agreement
between states.) Under the new constitution, the EU would gain major
new powers in harmonizing the immigration and asylum policies of EU
member states, with EU migration policies adopted by majority vote
except for immigrant access to the labor market, which, at the
insistence of Germany, would continue to require a unanimous
decision. Germany feared that the EU might impose national
immigration quotas by majority vote, and succeeded in retaining the
right to regulate unilaterally non-EU nationals arriving "to seek
work, whether employed or self-employed."

Italy in September 2003 proposed that immigration quotas be set by
individual member states, and then be aggregated and used by the
European Commission as a bargaining chip in negotiations with third
countries over readmission. Italy said its recent dealings with
Albania and other countries have shown that a preferential quota can
motivate countries to clamp down on clandestine immigration.
However, Germany said: "It has to stay within the competence of
individual member states to decide how to set up such quotas. . .
depending on what fits the situation in the labor market."

French interior minister Nicolas Sarkozy said the EU must develop the
trade-off between legal and illegal migration with sending countries:
"We cannot fight clandestine immigration without co-operating with
the countries from where it comes. It's not against these countries
that we are fighting, but with them. To fight with them, they must
find an interest in working with us." France pushed for a
three-pillar approach along these lines in a E40 million project with
Morocco, with France opening channels for legal immigration and
improving the integration of resident Moroccans while Morocco does
more to prevent illegal emigration.

The EU proposed a "local border traffic" visa for non-EU residents of
Kaliningrad and other areas that border on EU countries. Poland and
other EU border countries will be able to issue multiple entry visas
that allow a stay of up to seven consecutive days, so long as a
foreigner stays abroad less than three months of every six.

So-called "Generation E (for Europe)" are young people taking
advantage of freedom of movement within the EU. Many Generation E
are multilinguals in their 20s and 30s who say they are more European
than nationals of a particular country. The EU's internal migrants
are a university-educated elite; only two percent of the EU work
force are internal migrants.

Guest Workers British Prime Minister Tony Blair and Goran Persson,
the Swedish Prime Minister, are calling on EU nations to open
themselves to immigration. Persson said that the EU must "persuade
the voters that economic migration will be a prerequisite for welfare
and wealth - that they will contribute, not be a burden." Most
European countries are admitting unskilled foreigners for work, but
making an effort to keep their stay temporary by, for instance,
restricting the right to bring family members and adjust from
temporary to permanent resident status.

Among labor importers, Germany has the most such bilateral foreign
worker agreements, and Poland has the most among labor exporters.
There are two major German programs, one for agriculture and one for
construction. The agricultural program admitted 293,000 foreigners
in 2002, most for jobs in agriculture and forestry (over 90 percent)
and hotels. The program operates under a Memorandum of Understanding
(MOU) signed by the German labor minister and labor ministers of
sending countries: 93 percent of the seasonal workers admitted to
Germany for up to 90 days in 2002 were Poles who worked under the
terms of employer-worker agreements that were approved by the German
and sending-country Employment Service.

The second program is for project-tied workers, foreign workers who
are admitted after a German firm makes an agreement with, for
instance, a Polish firm that allows the Polish firm to provide
materials and workers to complete part of a construction project in
Germany. While in Germany, the Polish workers must be paid at least
the German minimum wage during their two- to three-year stay, but
they are not considered to be German workers, and thus pay
unemployment and pension taxes to their countries of origin, so that
their labor may cost 20 percent less than that of German workers.
Some 45,000 were admitted in 2002, primarily in construction; the
ceiling is currently 56,000 a year, lowered from 95,000 in 1992
because of fears that the program was an avenue to illegal migration.

There is also a trainee program that allows young people to work and
learn in Germany for up to 18 months, and similarly allows young
Germans to work and learn in Poland and other Eastern European
nations. Some 4,800 young trainees were admitted to Germany in 2002,
well under the ceiling of 10,250. Finally, there are several small
programs: one admitted about 360 nurses from Croatia and Slovenia in
2002, another about 1,000 domestic helpers from Poland, and a third
for Czech commuters to jobs in Germany.

Switzerland was the first European country to recruit guest workers
after World War II, largely because it had a functioning economy that
had escaped destruction during the war. Most of the first guest
workers were from Italy- Italians were 60 percent of the foreigners
in Switzerland in 1960- and they were recruited privately by
employers. The Swiss government introduced employer-specific quotas
on foreign workers in 1963, and a countrywide quota in 1970. When
the oil-price-induced recession came in 1973, guest workers could not
get UI insurance benefits, many left, and the Swiss unemployment rate
stayed low.

In 1991, the Swiss government adopted the three-circles model,
allowing easy entry to first-circle nationals of the European
Economic Area (about 60 percent of the foreigners in Switzerland are
EEA nationals, and they will have freedom of movement after 2007),
giving second-priority to second-circle nationals of Australia,
Canada, New Zealand and the US, and putting all other countries in
the third circle. The effect of the policy was to limit the entry of
more Yugoslavs, who were about 15 percent of foreigners.

In July 2002, the Swiss government allowed border commuters to easily
obtain one-year renewable work permits, introduced a short-term work
and residence permit for foreigners intending to be in the country
less than 12 months (but who can stay 24 months), and annual work and
residence permits for persons who intend to be in Switzerland more
than one year. The Swiss government is working on a new immigration
law that will draw sharper distinctions between temporary and
permanent permits, and make it harder to adjust from temporary to
permanent status.

Switzerland had an ongoing adjustment program that allowed foreigners
who worked at least 36 months in four consecutive years with
nine-month seasonal permits to work in construction, agriculture, and
hotels to "earn" an annual or permanent permit; it allowed 40 percent
of seasonal workers to settle. The seasonal program ended in June
2003, and it appears that asylum seekers are playing a larger role in
providing seasonal workers. Swiss employers tend to oppose
additional bilateral worker agreements, fearing they might impose new
obstacles to recruitment.

In December 2001, there were 739,000 foreigners in the Swiss work
force, about 25 percent of Swiss workers. About 60 percent were
settled with permanent status, 20 percent had renewable one-year work
permits, 18 percent were border commuters, and two percent were
seasonal workers- their number peaks at about 30,000 in the summer

Pensions. Europe is aging: the median age is projected to rise from
38 today to 52 by 2050, while remaining at 35 in the US. This
growing demographic disparity between Europe and the United States is
expected to have economic implications, as Europeans confront budget
shortfalls. For example, European governments must alter
pay-as-you-go pension systems, under which the taxes paid by current
workers are used to pay the pensions of current retirees, but the
first efforts to do so, such as the German government's attempt to
reduce pensions from 70 percent of average earnings to 60 percent,
have led to strikes and protests. However, instead of retiring later
as demographics might suggest, many Europeans continue to retire
early- only 40 percent of men age 55 to 65 still work, so that
shrinking cohorts of new workers and early retirement make pensions
very expensive.

To maintain current pension systems, the birth rate must rise or
immigration increase. By most calculations, the demographic impacts
of one million immigrants a year into Europe would be the same as
European women having on average one more child, but the arrival of
50 million immigrants by 2050 would also have important cultural

Raphael Minder, "Europeans ponder setting quotas for immigration,"
Financial Times, September 15, 2003. Daniel McConnell and Scott
Millar, "Ireland backs EU plan to deport failed asylum seekers," The
Sunday Times, August 10, 2003. Richard Bernstein, "Aging Europe
Finds Its Pension Is Running Out," New York Times, June 29, 2003.
Economist, "Forget Asylum Seekers: it's the people inside who count,"
May 10, 2003.

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