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On the Limited Effectiveness of European Expansion
November 2004

The European Union grew by 10 members to 25 nations in 2004. For 480 million Europeans, borders should have opened for free movement of people, ideas, and commerce. But politics and politicians have sharply constrained the impact of that expansion. Many in the old Europe fear disaster from the new ease of passage for people. Workers from low-income nations within the expanded European Union could come to steal the few menial jobs now still held precariously by locals. Immigrants may take advantage of generous health care, unemployment or welfare systems.  And they’ll never go home once they discover the burial benefits. 

The new EU members disagree. They point to a long history in which they have been occupied, exploited, and oppressed. Yet, they have never left their country voluntarily. Quite telling is the comment of a Hungarian who points out that “we live in brick houses” to explain that families have stayed in place for centuries. Perhaps a few excursions abroad, but never a move!

Right now, fear has the political upper hand. The old European nations have implemented special escape clauses to safeguard their systems. An abundance of new regulations are aimed against the new Europeans. For up to seven years, they will need special work permits, are restricted in their unemployment and health care benefits, and constrained in their retirement programs. The current European expansion is remindful of the prayer of Saint Augustin: “Lord make me chaste – but not yet!” 

There are several aspects to this arrangement which are worthy of research: Delay often introduces uncertainty, discontent and suffering. Those seeking the benefits are disappointed. Their hopes of rapid improvement and dreams of equality are shattered. After a century of misery due to accidents of history and geography, here is another painful setback. What is the price of delay ?

Those seeking to postpone the effects of expansion may only weaken their station. Won’t jobs continue to move to locations where they are performed better and at a lower price? There is likely to be less inflow of new enthusiasm and elasticity.  Rather than welcoming a shift to a new productive era, there may well be a stultifying wait for the “inevitable”, discouraging the old but not encouraging the new. How large is such an opportunity cost? 

Europe is different from the United States, but some post World War II U.S. experience can offer insights: Each year, on average, every seventh American moves. Most moves are within the same county, or within the same state. But year after year, U.S. movers to a different state almost reach 3 percent of the population. That is the equivalent of the entire U.S. population transiting to a new home state in little more than one generation. 

Not everybody moves equally. The wealthy and well entrenched have very low migration patterns.  Those with low household incomes are the most avid movers, seeking new opportunities. Young adults move frequently to broaden their views. 

All this mobility has maintained a sense of adventure in America. It has retained a spirit of flexibility and exploration. If there are no new jobs in Illinois but lots of new opportunities in Arizona, then that’s where people go. There has been the creation of entirely new regional industry and service clusters, the absorption of many immigrants into the economy and relatively low long term unemployment. There remains strong local pride of place yet there is little xenophobic fear from out of state migrants. Vermonters don’t fear Virginians! 

What does all this mean for the new Europe? The opportunities to pick up and move are there. Even large increases in mobility would only represent a small population flow (which is now less than one half of one percent). Europe seems to be in need of new approaches and perspectives. People deserve to explore new options. New moves may well become an action signal for the European economy and way of thinking. This may be a key opportunity to enrich the quality of life of regions and individuals. Are the same groups of people amenable to moving in Europe as they are in the United States? Can the benefits of moving be predicted and measured ? 

Moves will change cultures. After all, culture is the result of learned behavior and adjustment to new conditions. Opening up to others should bring the reward of growing flexibility, better understanding, and rising tolerance levels. Mobility has brought the power of improvisation and adjustment to the United States. What would a newfound mobility bring to Europe’s ability to innovate and its willingness to take risks ? Is mobility perhaps the key to bridge the difference and distance between old and new Europeans ? Is so, who should support such mobility and how should such support be provided ? 
 

 
Michael R. Czinkota, Georgetown University
Ilkka A. Ronkainen, Georgetown University
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