EU: STAY-AT-HOME ATTITUDE UNDERMINES EMU VIABILITY.

EU: STAY-AT-HOME ATTITUDE UNDERMINES EMU VIABILITY. - Why a more mobile workforce is needed across the EU.

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Last Updated: 31 Aug 2010

Why a more mobile workforce is needed across the EU.

In spite of widespread scepticism about the benefits of membership of the European Union, UK nationals are the Europeans most willing to seek employment opportunities in other EU states. A recent survey by the European Commission found that 57% of British people are willing to work elsewhere on the Continent, compared to around 50% of the Italians and French (see chart). The least mobile are the Germans, only 26% of whom are willing to work in other EU countries. Differences in wage rates across the Community provide one obvious explanation for these findings: workers in relatively low wage countries (like the UK, Spain and Portugal) can gain more by moving than those in high-wage areas (such as Germany and Belgium). Such pecuniary factors would seem to outweigh the linguistic obstacles.

However the results highlight a potential problem for advocates of European Monetary Union, says Schroder Economics. If fewer than half the EU's nationals are prepared to move across borders to find work, labour mobility is unlikely to be sufficient to prevent high levels of unemployment from emerging in the less competitive regions. Once currencies have been locked together, the option of raising competitiveness through devaluation is no longer available.

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