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European Economic Integration and South-East Europe

European Economic Integration and South-East Europe

Challenges and Prospects

Edited by Klaus Liebscher, Josef Christl, Peter Mooslechner and Doris Ritzberger-Grünwald

With both transition dynamics and the EU integration process having shifted to the south-east of Europe, a region fairly marginalized in the literature, this book fills a gap by taking stock of where South-East Europe’s economies and institutions stood in 2004. The authors evaluate the potential for investment and growth within the South-East European region, including the role of trade and FDI, and discuss the challenges associated with unemployment, poverty and ‘brain drain’. The book also provides insights into the particular monetary and exchange rate policies applied, including cases of ‘euroization’, and finally makes an assessment, against this background, of the European perspective of the countries of South-East Europe.

Chapter 18: Jobless growth in South-East Europe, migration and the role of the EU

Tito Boeri

Subjects: economics and finance, regional economics, urban and regional studies, regional economics


Tito Boeri 1. INTRODUCTION On 1 May 2004, ten new countries formally joined the European Union (EU). The new members are small economically – they have significantly lower income per capita levels than the EU-15 – but large demographically. By 2007 the second phase of the Eastern enlargement, involving two key countries of South-East Europe, namely Bulgaria and Romania, should take place. By then, the number of EU citizens will have grown by more than 100 million. The Eastern part of Europe is growing fast but, especially in its Southern components, failing to generate jobs. In some of the high-unemployment areas of the EU-15, such as Andalusia or the Italian Mezzogiorno, an opposite phenomenon is observed: low growth but decreasing unemployment. These developments add to income inequalities between old and new members of the EU another potential source of East–West migration, namely unemployment differences. Concerned about this migration potential and under the pressure of public opinion, governments in the EU-15 are de facto closing their doors to workers from the new member states (NMS). This is a by-product of a lack of coordination at the EU level. As there is no agreement at the EU level on a common set of rules to be applied to the new citizens during the seven-year transition period, each of the old members has decided to establish its own rules. In general, these rules substantially tighten migration or introduce other restrictions for the newcomers. Supra-national authorities in the EU are also taking a...

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