REPORT FROM THE COMMISSION TO THE COUNCIL on the Functioning of the Transitional Arrangements on Free Movement of Workers from Bulgaria and Romania
Date: 2011-11-11
Institutions: European Commission
Subjects: Bulgaria, Italy, Romania, Spain, free movement of workers, occupational migration, transitional period (EU)

EUROPEAN COMMISSION 

Brussels, 11.11.2011 
COM(2011) 729 final 

REPORT FROM THE COMMISSION TO THE COUNCIL 

on the Functioning of the Transitional Arrangements on Free Movement of Workers 
from Bulgaria and Romania 

{SEC(2011) 1343 final} 

 
 
 
 
  
 
1. 

INTRODUCTION 

1.1. 

Purpose of the report 

The Commission presents this report in accordance with paragraph 4 of Annexes VI 
and  VII  to  the  2005  Act  of  Accession  of  Bulgaria  and  Romania.  Following  the 
request  of  Bulgaria  and  Romania  of  20  June  2011  for  a  further  review1  by  the 
Council  of  the  functioning  of  the  transitional  arrangements  on  free  movement  of 
workers,  it  is  to  serve  as  the  basis  on  which  the  Council  will  conduct  the  review, 
which must be completed within six months of receipt of the request. 

1.2. 

Free movement of workers as a fundamental freedom 

The free movement of persons is one of the fundamental freedoms guaranteed by EU 
law. It includes the right of EU nationals to move freely to another EU Member State 
to take up employment and reside there with their family members. Under EU law on 
the  free  movement  of  workers,  Member  States  cannot  directly  or  indirectly 
discriminate  against  EU  migrant  workers  and  their  families  on  the  basis  of 
nationality  in  employment-related  matters.  It  also  entitles  EU  migrant  workers  to 
equal  treatment  as  regards  tax  and  social  advantages,  membership  of  trade  unions, 
public housing, and the access of their children to general education, apprenticeship 
and vocational training. 

1.3. 

Transitional arrangements on the free movement of workers 

The 2005 Act of Accession allows EU-252 Member States to temporarily restrict the 
free access of workers from Bulgaria and Romania to their labour markets by making 
it  subject  to  their  national  law.  Despite  this  restriction  granted  by  the  transitional 
arrangements,  a  Member  State  must  always  give  preference  to  Bulgarian  and 
Romanian  workers  over  workers  who  are  nationals  of  non-EU  countries  as  regards 
first access to the labour market. No restrictions apply for EU-2 workers in the EU-2 
Member States. 

The overall transitional period of seven years is divided into three distinct phases (‘2-
plus-3-plus-2’). Different conditions apply during each phase: 

– 

The  national  law  of  the  other  Member  States  regulates  the  access  of  workers 
from Bulgaria and Romania to their labour markets in the first two years. 

–  Member  States  can  extend  their  national  measures  for  a  second  phase  of 
another 3 years upon notification to the Commission before the end of the first 
phase, otherwise EU law granting free movement of workers applies. 

1 

2 

First  review  of  EPSCO  Council  on  17  December  2008,  on  the  basis  of  Commission  report 
COM(2008) 765 of 18.11.2008. 
the  EU  before  1  January  2007;  
‘EU-25’  refers 
‘EU-2’ refers to Bulgaria and Romania; ‘EU-10’ to all countries that joined the EU on 1 May 2004 and 
‘EU-15’ to the Member States that formed part of the EU before 1 May 2004. 

to  all  Member  States  forming  part  of 

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– 

A Member State maintaining national measures at the end of the second phase 
may, in the event of serious disturbances of its labour market, or threat thereof 
and after notifying the Commission, continue to apply these measures until the 
end of the seven-year period following the date of accession. 

In addition, a safeguard clause allows a Member State that has stopped using national 
measures and applies EU law on the free movement of workers before the end of the 
overall transitional period to re-introduce restrictions if there are serious disturbances 
on the labour market, or threat thereof. 

The  transitional  arrangements,  which  will  irrevocably  end  on  31  December  2013, 
only  apply  to  obtaining  access  to  the  labour  market  under  EU  law  on  the  free 
movement  of  workers.  Once  admitted  to  the  labour  market  of  a  Member  State,  an 
EU-2 worker benefits fully from all other rights under EU law on the free movement 
of workers. 

The transitional arrangements do not affect the fundamental right of EU citizens to 
move  and  reside  freely  within  the  EU,  under  Article  21  of  the  Treaty  of  the 
Functioning  of  the  EU  (TFEU).  There  are  no  transitional  arrangements  for  the 
application of EU law on coordination of social security schemes. 

The transitional arrangements do not apply to self-employed workers who establish 
or provide their services within the EU although Germany and Austria are allowed to 
apply restrictions on the cross-border provision of services involving the temporary 
posting  of  workers  as  defined  by  the  Directive  on  Posting  of  Workers  in  certain 
sensitive sectors3. 

1.4. 

Overview of national policies on access to the labour market 

Workers from Bulgaria currently have free access to the labour markets of 15 of the 
EU-25 Member States. 

After Spain invoked the safeguard clause and the Commission, on 11 August 2011, 
accepted  its  request  to  re-introduce  restrictions  for  Romanian  workers  until  31 
December 20124, Romanian workers currently have free access to the labour market 
of 14 of the EU-25 Member States. 

The Member States that maintain restrictions on labour market access apply a variety 
of national measures that result in legally different regimes for access to their labour 
markets.  Some  apply  full  work  permit  schemes  while  others  have  simplified 
procedures or eased conditions e.g. by not requiring work permits for occupations in 
certain sectors or by exemptions from labour market tests5. 

3 

4 
5 

On 10 February 2011 the Court of Justice held in case C-307/09 (Vicoplus) that Member States  may 
also restrict the posting of temporary agency workers. 
Commission Decision 2011/503/EU of 11 August 2011, OJ L 207, 12.8.2011, p. 22. 
More information on individual national measures available at http://ec.europa.eu/eures. 

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Table 1: Member States’ policies on access to the labour market 

Member States
Belgium
Czech Republic
Denmark
Germany
Estonia
Ireland
Greece

EU-25

Spain

France
Italy
Cyprus
Latvia
Lithuania
Luxembourg
Hungary
Malta
Netherlands
Austria
Poland
Portugal
Slovenia
Slovakia
Finland
Sweden
United Kingdom

Workers from Bulgaria and Romania

 Restrictions with simplifications
 Free access - national law (1.1.2007)
 Free access (1.5.2009)
 Restrictions with simplifications*
 Free access (1.1.2007)
 Restrictions 
 Free access (1.1.2009)
 Free access (1.1.2009)
 Restrictions for workers from Romania (22.07.2011)
 Restrictions with simplifications
 Restrictions with simplifications
 Free access (1.1.2007)
 Free access (1.1.2007)
 Free access (1.1.2007)
 Restrictions with simplifications
 Free access (1.1.2009)
 Restrictions
 Restrictions with simplifications
 Restrictions with simplifications*
 Free access (1.1.2007)
 Free access (1.1.2009)
 Free access (1.1.2007)
 Free access (1.1.2007)
 Free access (1.1.2007)
 Free access (1.1.2007)
 Restrictions

Source: DG EMPL Note: * Restrictions also on the posting of workers in certain sectors 

1.5. 

Third phase of transitional arrangements 

Restrictions  on  the  free  movement  of  Bulgarian  and  Romanian  workers  should,  in 
principle, end on 31 December 2011. Member States that still apply restrictions may 
maintain them after 31 December 2011 in the event of a serious disturbance  of the 
labour  market  or  a  threat  thereof  and  after  notifying  the  Commission  before  1 
January 2012. 

Notification by a Member State within the deadline will extend the restrictions after 
31  December  2011  without  need  for  the  Commission’s  assent.  However,  by 
temporarily  allowing  restrictions  on  the  free  movement  of  workers,  the  transitional 
arrangements derogate from a fundamental freedom of EU law. The Court of Justice 
has  consistently  held  that  derogations  from  fundamental  freedoms  must  be 
interpreted strictly. A strict interpretation also applies to the conditions under which 
Member  States  may  continue  to  restrict  labour  market  access  in  the  third  phase. 
Therefore, while recognising that labour markets within the EU vary widely and that 
it is for each Member State to identify a disturbance  of its labour market,  or threat 
thereof,  the  Commission  expects  Member  States  to  provide  a  full  justification  with 
data  and  convincing  arguments  on  the  existence  of  a  labour  market  disturbance  or 
threat thereof that goes beyond simply citing the unemployment rate. 

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2. 

EXTENT OF INTRA-EU LABOUR MOBILITY BY EU-2 CITIZENS 

2.1. 

Bulgarian and Romanian citizens resident in other Member States 

The  exact  scale  of  post-enlargement  mobility  flows  is  difficult  to  ascertain  due  to 
shortcomings in existing data. However, population statistics and data from the EU 
Labour  Force  Survey  (LFS)  suggest  that  at  the  end  of  2010,  around  2.9  million 
Bulgarian  and  Romanian  nationals  of  all  ages  —  irrespective  of  labour  market 
participation — reside in the EU-256 (Tables A1 and A27), more than twice as many 
as  shortly  before  accession  (1.4  million  at  the  end  of  2006).  This  represents  an 
average net growth of 360 000 persons per year. This process had, however, already 
started before 1 January 2007 with an average net growth around 220 000 per year 
between 2003 and 2006. 

The two main destination countries have been Italy and Spain, which together house 
more than 70 % of all Bulgarian and Romanian nationals resident in another Member 
State  (end  of  2010).  Romanian  nationals  represent  more  than  80 %  of  all  EU-2 
nationals resident in another Member State and are found mainly in Italy (41 %) and 
Spain  (38 %),  followed  by  Germany  (5 %)  while  Bulgarian  nationals  live  mainly  in 
Spain (38 %), Germany (15 %), Greece (12 %), Italy (10 %) and UK (7 %). 

While the recent inflows seem substantial in absolute terms, in relative terms, EU-2 
nationals  resident  in  an  EU-25  Member  State  represent  only  0.6 %  of  the  total 
population  of  the  EU-25  at  the  end  of  2010,  compared  to  0.3 %  four  years  before. 
This  share  is  the  highest  in  Cyprus  (4.1%),  followed  by  Spain  (2.2 %)  and  Italy 
(1.8 %). 

Focusing  on  recently  arrived8  mobile  citizens  of  working  age  (Chart  A1),  EU-2 
nationals  represent  a  fairly  significant  share  of  the  working  age  population  only  in 
Cyprus (4.3 %), Spain (1.4 %) and Italy (1.1 %) — though even in these countries, the 
share  of  recently  arrived  workers  from  non-EU  countries  has  been  significantly 
higher. 

LFS  data  also  indicate  (Table  A3)  that  recent  working-age  movers  from  Romania 
mainly went to Italy and Spain (close to 40 % each), with a smaller share going to the 
UK,  Germany  and  France  (around  12 %  combined).  Around  one  third  of  recent 
movers  from  Bulgaria  went  to  Spain,  followed  by  the  UK,  Germany,  Italy  and 
Greece (all between 10 and 15 %). 

2.2.  Mobility flows from the perspective of Bulgaria and Romania 

Out of all recent intra-EU movers, Romanians constitute the largest group of working 
age citizens living in another Member State (Chart A2) in 2010 (27 %), followed by 

6 

7 

8 

As more than 95 % of EU-2 nationals living in another Member State are in EU-15 countries, it does not 
make a significant difference to use EU-15 instead of EU-25 as reference for the receiving countries. 
This is done several times for sake of simplification or data availability. 
All  tables  and  charts  referred  to  with  ‘A’  are  given  in  the  Commission  Staff  Working  Paper 
accompanying this report. 
Recently arrived mobile citizens are defined as persons resident 7 years or less in another EU Member 
State. 

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Polish  citizens  (21 %).  Bulgarians  constitute  the  fourth  group,  with  a  much  smaller 
share (5 %). 

Over  the  period  2003-2010,  the  number  of  EU-2  nationals  living  in  other  Member 
States  increased  by  2.1  million  persons  which  was  around  7 %  of  the  domestic 
population  of  EU-2  countries  (measured  in  2003)  and  much  higher  than  the 
corresponding figure for the EU-109 countries over the same period (around 2 %).  

Focusing on the working age population, the outflow of Romanian citizens to other 
EU Member States since accession amounts to about 3.1 % of the Romanian working 
age population (Chart A3). In Bulgaria, the corresponding rate has been 2.1 %. These 
mobility rates are significantly higher over the period since 2004 (6.6 % for Romania, 
3.7 %  for  Bulgaria)  showing  that  labour  mobility  from  these  countries  was  already 
significant  before  2007.  LFS  data  also  suggest  that  the  majority  of  EU-2  citizens 
living  in  other  Member  States  were  already  there  before  accession  (Chart  A4). 
Finally, there are indications (Holland et al, 201110) that the substantial wave in 2007 
did  not  correspond  entirely  to  real  new  inflows  but  reflected,  at  least  partly,  the 
regularisation of existing migrants already living in the country. 

2.3. 

Trends in mobility flows 

Intra-EU mobility seems to follow the trends of the economy. The 2004-2007 period 
of strong economic growth saw the highest inflows from EU-10 and EU-2 countries 
to EU-15 countries, but this trend changed radically from 2008 with the start of the 
economic and financial crisis. Overall, the recession and the resulting fall in labour 
demand  caused  a  slowdown  in  the  inflow  of  EU-10  and  EU-2  citizens  in  EU-15 
countries,  especially  in  2009.  It  also  triggered  some  higher  return  outflows  to  the 
countries  of  origin  but  there  is  no  evidence  of  large-scale  returns11  as  a  significant 
portion of the workers from the EU-10 and EU-2 decided to stay in the destination 
country (Koehler et al, 2010). 

Mobility  outflows  from  Bulgaria  and  Romania  peaked  in  2007  before  decreasing 
substantially  in  2008  and  especially  in  2009,  and  increasing  again  in  2010  in  line 
with the improvement in economic conditions. While the flows towards IT, UK, FR 
and  DE  have  risen  again,  inflows  have  decreased  in  ES,  largely  explained  by  the 
adverse situation on its labour market. Between 2007 and 2010, there has been a shift 
in  the  geographical  distribution  of  EU-2  nationals  living  abroad  with  a  rise  in  the 
share in Italy (from 32 % to 37 %) and a decrease in Spain (from 44 % to 35 %). 

The decline in intra-EU mobility during the crisis has been less pronounced for EU-2 
than  for  EU-10  nationals  (Table  A4),  because  EU-2  enlargement  took  place  more 
recently and is therefore still impacting on workers mobility. Another reason is that 
Bulgaria  and  Romania  have  been  severely  affected  by  the  economic  recession  and 
the  large  wage  difference  with  the  EU-15  countries  still  constitutes  a  strong  pull-
factor (Holland et al, 2011). Nevertheless, mobility flows from EU-2 appear to have 

9 

10 

11 

As  a  basis  for  comparison,  some  tables  and  graphs  in  this  report  and  its  annex  also  include  figures 
related to the situation of EU-10 nationals.  
The  complete  references  of  the  external  studies  quoted  in  the  text  are  listed  in  the  Commission  Staff 
Working Paper accompanying this report.  
According to Eurostat population statistics and the LFS. 

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peaked in 2007 and, despite a recovery, were in 2010 far below the levels recorded in 
the period 2006-2008. 

2.4. 

Transitional arrangements and factors impacting on mobility 

Table  A5  shows  that  the  impact  of  opening  the  labour  market  early  (in  FI,  SE  and 
most EU-10) on inflows from EU-2 has been very limited. As for the countries that 
opened their labour markets in 2009 after the end of the first phase, the net inflows 
have  also  been  very  limited  following  the  opening  (DK,  HU)  or  decreased 
significantly  compared  to  the  previous  years  (ES,  EL,  PT),  which  can  partly  be 
explained by the economic recession. Meanwhile, the countries that continued to use 
transitional measures have received significant inflows since 2007. In Italy, no work 
permits  have  been  required  in  major  sectors  since  2007,  which  explains  the  strong 
rise in mobility from EU-2 countries. 

These examples suggest that transitional measures have only had a limited influence 
on the distribution of intra-EU mobility and that mobility flows are driven by other 
factors,  such  as  general  labour  demand,  network  effects  through  existing  foreign 
population and language. 

As  stated  in  the  2008  report12,  if  anything,  restrictions  on  the  labour  market  access 
can  have  side  effects  such  as  the  increased  incidence  of  undeclared  work.  The 
relatively  high  share  of  self-employed  among  recent  intra-EU  movers  from  EU-10 
and  EU-2  countries  in  countries  keeping  restrictions  is  another  side  effect  of  the 
restrictions13.  Finally,  during  the  recession,  fears  of  losing  access  to  the  labour 
market may have pushed EU-2 workers to stay in the destination country even when 
they  lost  their  jobs  instead  of  leaving  and  coming  back  when  the  labour  market 
recovers. 

3. 

MAIN CHARACTERISTICS OF INTRA-EU MOVERS 

3.1. 

Age, gender and education 

Out  of  all  EU-2  nationals  living  in  other  Member  States,  85 %  are  of  working  age 
(15-64) compared to an average of 67 % in the total resident population of the EU-25. 
Mobile  citizens  from  EU-2  countries  are  therefore  much  more  likely  to  be  in  the 
economically  productive  period  of  their  life  than  the  native  population.  Moreover, 
recent mobile EU-2 workers are younger than the overall population in both sending 
and  receiving  countries.  Persons  aged  less  than  35  represent  62 %  of  the  EU-2 
economically active working-age movers compared to only 34 % in the EU-15 labour 
force  (Chart  1).  As  for  the  gender  breakdown,  there  is  a  higher  share  of  women 
among  recent  active  intra-EU  movers  from  EU-2  (50 %)  than  the  average  in  the 
labour force of the receiving countries (45 %). 

12 
13 

COM(2008) 765 of 18.11.2008. 
In 2010, the share of self-employed among EU-2 nationals is much higher where salaried employment 
was subject to restrictions on the free movement of workers (UK, DE) than where it was not (ES) or in 
Italy (where no work permits are required in major sectors). This was also underlined by Kausar (2011) 
and Fellmer and Kolb (2009).  

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Chart  1  also  indicates  that  around  one  third  of  recent  intra-EU  movers  from  EU-2 
countries are low skilled (compared to only 18 % among EU-10 recent movers) and 
more than half of them are medium-skilled (see Chart 1). The share of high-skilled 
(14 %) is much lower than in the EU-15 labour force (29 %). 

Chart 1: Socio-economic breakdown of recent movers from the EU-2/10 to the 
EU-15 (age group 15-64), 2010 (% of total per variable and group) 

Total EU-15 population

Recent EU-10 movers

Recent EU-2 movers

80

70

60

50

40

30

20

10

0

74

65

63

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53

50

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45

55

53

44

28

21

18

23

18

15

11

61

52

45

29

21

14

36

27

34

26

18

13

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Labour market status 

Sex

Age

Educational attainment

Source: Eurostat, EU LFS, annual data. 

Note: Recent movers are defined as persons resident 7 years or less in their EU-15 
host  country.  Data  on  gender,  age  and  educational  attainment  refer  to  the  active 
population aged 15-64 and data on labour market status refer to the total population 
aged 15-64. 

3.2. 

Labour market status 

In  2010,  recent  movers  from  EU-2  have  an  employment  rate  slightly  lower  (63 %) 
than the average in the EU-25 (65 %)14. However, the breakdown by main destination 
country shows that employment rates are much higher than the average working age 
population in IT and the UK, close to the average in ES and significantly lower only 
in DE (Chart A6). Moreover, the inactivity rate of EU-2 movers is much lower than 
the average (Charts 1 and A6). 

In these main destination countries, their employment rate is also comparable to the 
average  among  EU-10  movers  (Chart  A6),  showing  that  it  is  mainly  the 
concentration of the EU-2 in countries with a lower overall employment rate (Italy, 
Spain) — see Chart A13 — that explains their overall less favourable performance 
(compared to EU-10 movers). 

14 

In 2007, before the crisis, these two rates were identical (see Chart A7). 

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EU-2 movers have been the group hardest hit by the economic recession (Chart A7) 
and their unemployment level is very high. This is mainly due to the general labour 
market  situation  in  ES15,  one  of  the  two  main  destination  countries,  to  their  on-
average  low  educational  attainment  (Chart  A9)  and  their  predominance  in  sectors 
strongly impacted by the crisis, in particular the construction sector. 

The  employment  rate  of  EU-2  movers  is  higher  (63 %)  than  the  average  in  the 
sending countries (59 %), see Chart A5. 

3.3. 

Occupations and sectors 

Recent movers from Bulgaria and Romania tend to work predominantly (Table A6) 
in construction (21.2 %)16, private households (17.5 %) and accommodation and food 
service  activities  (14.2 %).  Their  share  in  public  administration,  education,  ‘health 
and social work’ and ‘professional, scientific and technical activities’ is much lower 
than the average. 

EU-2  mobile  workers  are  concentrated  in  occupations  requiring  low  (40 %)  or 
intermediate (53 %) qualifications and highly-skilled occupations employ only 7 % of 
the  workers  (Table  A7  and  Chart  A10).  The  most  frequent  occupations  are 
elementary occupations and ‘craft and related trades workers’. 

The  sectoral  and  occupational  distributions  of  EU-2  workers  broadly  reflect  their 
skill  pattern,  with  an  overrepresentation  of  the  low-  and  medium-skill  segments. 
During  the  period  of  economic  growth,  inflows  of  EU-2  workers  were  positive  for 
the labour markets of the receiving economies as they entered occupations or sectors 
with  labour  shortages  and  accounted  for  a  limited  share  in  local  employment17. 
However, the high share of young and/or low-skilled among EU-2 movers has had a 
negative impact on their employment performance during the recession (in particular 
in Spain, see Chart A11) since they are more vulnerable to job losses, have limited 
adaptability and find it difficult to re-integrate into the labour market. 

4. 

ECONOMIC AND LABOUR MARKET IMPACTS 

4.1. 

Impact on growth and GDP per capita 

A  recent  model-based  study18  estimates  that  mobility  from  the  EU-2  during  2004-
2009  may  have  boosted  the  aggregate  GDP  of  the  EU  by  about  0.2 %  in  the  short 
term and 0.3 % in the long term (based on the increased labour force and allowing for 
adjustment of production capacity). For the receiving EU-15 countries, the long-term 
impact is even stronger (0.4 %). However, countries that received significant inflows 
from EU-2 countries have the highest long-term impact on GDP: +1.7 % in Spain and 
+1.3 % in Italy. There seems to be no significant long-term impact on GDP per capita 
for receiving countries. Other studies (such as D’Auria, Mc Morrow and Pichelmann, 

15 
16 

17 

18 

More than 60 % of unemployed EU-2 nationals living in another Member State are in ES (23 % in IT).  
The  concentration  of  EU-2  workers  in  the  construction  sector  was  even  more  pronounced  before  the 
crisis with a share around 27 % in 2007. 
While  the  three  main  sectors  quoted  above  constitute  around  53 %  of  EU-2  recent  movers  in 
employment, they play a minor role on average in EU-15 employment (less than 14 %).  
Holland et al, 2011. 

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2008; Brücker et al., 2009; and Baas, Brücker and Hauptmann, 2009) tend to confirm 
the overall positive impact on overall GDP and moderate effects on GDP per capita. 

For the EU-2 sending countries, the long-term impact on GDP is largely negative (-
9.2 %) due to significant outflows in 2004-2009, but the impact on output per capita 
is  much  lower  (-2.5 %).  Moreover,  remittances  can  partially  offset  the  negative 
growth impact in the short and medium term (see section 4.4). 

4.2. 

Impact on public finances, welfare systems and public services 

According to various studies (e.g.: Barrett and Maître, 2011), there is no evidence of 
a disproportionate use of benefits by recent intra-EU mobile citizens. Mobility flows 
have in some cases created pressure on education, housing and health care services at 
local  level.  However,  most  studies  (e.g.:  D’Auria,  Mc  Morrow  and  Pichelmann, 
2008)  estimated  that  the  impact  of  recent  mobility  flows  on  public  finances  is 
negligible or positive at national level and there is no recent counter evidence. 

In  the  longer  term,  intra-EU  mobility  may  put  the  age  structure,  and,  as  a  likely 
result,  public  finances  of  the  sending  countries  under  pressure  since  the  EU-2 
Member States have seen large outflows of young citizens. 

4.3. 

Impact on wages and employment 

Most  studies  of  the  impact  of  EU-2  labour  mobility  on  wages  and  employment  of 
local workers conclude that the effects are very small. For example, a recent study19 
finds that that wages in the EU-15 are on average 0.24 % lower in the short term than 
they  would  have  been  without  additional  mobility  from  the  EU-2,  with  a  similar 
impact in the long term (-0.28 %). The impact is stronger for countries that received 
significant inflows from the EU-2 (about -0.7 % for both ES and IT). 

The short-term impact of the inflow of EU-2 workers on unemployment is also found 
to be marginal, with an estimated increase of the average EU-15 unemployment rate 
only 0.02 percentage points in the short term and no effect in the longer term, even in 
countries that received significant inflows from EU-2. 

Disaggregated  results  for  specific  skill  groups,  sectors  or  occupations  may  differ 
from aggregated results. Brücker et al (2009) showed that the employment effect for 
low-skilled workers would be larger than the aggregate. However, even when taking 
into account differences in worker’s qualifications, the impacts tend to be moderate. 

4.4. 

Impact of the economic recession 

The  macro-economic  and  employment  effects  described  above  are  the  isolated 
effects  of  mobility,  not  taking  into  account  other  factors  that  have  an  impact  on 
wages  and  employment.  It  should  be  noted  that  the  period  in  which  these  effects 
were estimated (2004-09) was mostly characterised by economic growth. During the 
growth  period  (2004-07)  EU-2  nationals  filled  labour  shortages  in  the  receiving 

19 

Holland et al, 2011. 

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countries, but since the recession, their labour market integration has become much 
more difficult, especially in Spain20. 

However, it is clear that recent EU-2 movers played a very minor role in the labour 
market crisis of individual countries. For instance, in 2010 they represented only 1 % 
of all unemployed persons (aged 15-64) in EU-15 countries21, compared to 4.1 % for 
recently arrived third-country nationals.  

4.5. 

Remittances 

Remittances  sent  by  workers  living  abroad  to  Bulgaria  and  Romania  represent 
around 3 % of GDP in both countries (average 2004-201022). They are a substantial 
source of income in the sending country and can help to drive economic growth by 
supporting  aggregate  demand  and  financing  investment  in  education  or  the  start-up 
of capital-intensive businesses. Therefore, remittances can be a partial compensation 
for  losses  in  sending  countries  that  result  from  the  loss  of  potential  labour  input. 
They  can  also  have  a  positive  impact  on  the  balance  of  payments  of  sending 
countries. 

4.6. 

Brain drain and labour shortages in the sending countries 

The significant emigration from Bulgaria and Romania of mostly younger workers to 
other Member States has sparked concerns over a brain drain. However, as the share 
of highly skilled workers among recent movers from EU-2 countries is lower (14 %) 
than in the active population in origin countries (19 %), there does not seem to be a 
strong brain-drain effect in these countries (Chart A8). Moreover, enrolment rates for 
tertiary  education  in  the  EU-2  have  substantially  accelerated  over  the  past  years, 
which may begin to compensate the outflow of skilled labour. 

Although there does not seem to be a brain drain overall, such effects may be felt in 
specific sectors or occupations, such as the health sector. 

5. 

CONCLUSIONS 

The  main  destination  for  movers  from  Bulgaria  and  Romania  has  been  Italy  and 
Spain, with very limited inflows into most other Member States. The rate of inflows 
fell  sharply  during  the  recession,  especially  in  the  countries  most  affected  (such  as 
Spain), and since accession have, in total, been substantially lower than the inflow of 
third country nationals. There is no evidence of a direct link between the magnitude 
of labour flows from EU-2 Member States and the transitional arrangements in place. 
Most EU-2 nationals were already in the destination countries before accession, and 
the countries that applied EU law on free movement upon accession did not attract 
the largest inflows. While the future trend in EU-2 mobility will depend on a host of 
factors,  most  of  them  uncertain  (such  as  growth,  job  creation  and  wages  in  both 
receiving  and  sending  countries),  there  are  indications  that  many  of  the  EU-2 

20 

21 
22 

The limited return mobility despite the adverse labour market situation also implies that there has been 
a significant stock of recently arrived EU-2 movers to be integrated in the labour market, in a period of 
weak labour demand.  
The highest shares are found in ES (2.4 %) and IT (2 %).  
Source: Eurostat and World Bank. 

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nationals who wanted to move have already done so, suggesting a lower potential for 
migration. 

The  vast  majority  of  recent  movers  from  Bulgaria  and  Romania  participate  in  the 
labour market to the same extent as the average population, or even at a higher rate. 
They  have  played  overall  a  positive  role  for  the  economies  of  receiving  countries, 
contributing  to  the  skill  mix,  and  working  in  sectors  and  occupations  where  labour 
shortages  needed  to  be  filled.  This  was  especially  true  during  the  growth  period 
2004-2007.  Since  the  recession,  the  integration  into  the  labour  market  of  EU-2 
nationals, including many young and low-skilled people, has been more difficult. 

Econometric  estimates  show  a  positive  impact  on  GDP  (especially  in  the  countries 
that received significant inflows of EU-2 workers) and a neutral impact on GDP per 
capita  of  the  receiving  countries.  Studies  have  not  found  a  significant  impact  on 
unemployment  or  wages  of  local  workers, even when  disaggregating by skill level. 
However,  these  estimates  indicate  a  mostly  negative  effect  on  sending  countries, 
especially  over  the  long  term.  They  have  seen  substantial  outflows  since  2003, 
affecting  the productive capacity and  contributing to an older workforce. However, 
remittances  can  partially  offset  this  negative  impact  and  the  brain-drain  effect  is 
considered to be limited. 

In conclusion, the effects of mobility from the EU-2 seem limited for most countries, 
less so for Italy and Spain, and existing evidence shows that intra-EU mobility has 
generally  not  led  to  serious  labour  market  disturbances.  The  current  labour  market 
disturbances  faced  by  a  number  of  Member  States  are  due  to  a  variety  of  factors, 
notably the financial and economic crisis and structural labour market problems. 

Nevertheless,  post-enlargement  mobility  may  have  had  some  economic  and  social 
costs  for  the  receiving  countries  as  well  as  for  the  sending  countries.  The 
Commission  believes  that  these  costs  will  not  be  reduced  by  restricting  labour 
mobility but by addressing them through specific policies. As the experience of the 
2004  enlargement  has  shown,  restricting  the  free  movement  of  workers  may  have 
negative side effects, such as an increase in undeclared work. In essence, restricting 
the free movement of workers is not the answer to high unemployment in Europe. 

The freedom of movement of workers is one of the fundamental freedoms of EU law. 
It makes a positive contribution to labour markets throughout Europe and therefore is 
a  key  element  of  the  Europe  2020  Strategy  to  which  all  Member  States  have 
subscribed.  It  is  a  powerful  and  positive  symbol  of  what  Europe  means  for  the 
individual EU citizen. 

The  Commission  trusts  that  this  report  and  its  supporting  material  will  provide  the 
Council with the information it needs to review for a second time the functioning of 
the transitional arrangements of Bulgaria and Romania. 

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