Challenge That Europe Must Not Shrink from; How Can the EU Boost Its Workforce to Ensure Economic Growth?

Article excerpt

Byline: STEWART FLEMING

AS THE rousing strains of the Marseillaise echoed around the Stade de France before last October's football match between France and Algeria, jeers and whistles filled the stadium. The howls of derision which poured down on the national anthem sent a shockwave through the salons of Paris. For it was thousands of Frenchmen, many of them second or third-generation immigrants from North Africa, who were giving voice to their disaffection with the country into which they had been born.

The jeering football supporters in Paris, last summer's race riots in Burnley and Oldham and high levels of violence against immigrants in eastern Germany, Italy and Spain all send the same message at a time when the working age population in the European Community is beginning to shrink so alarmingly that it is posing a threat to economic growth.

Tackling this long-term problem is not only going to mean that people will have to start retiring later. It will also require countries to do a far better job of integrating racial minorities, including more new immigrants, into the workforce and workers themselves are going to have to show a much greater willingness to leave their communities, even their countries, and move to where the jobs are.

At their economic summit in Barcelona next month, Europe's leading ministers will once again wrestle with the challenge of how to inject new vigour into the sluggish EU economy.

Two years ago, at the Lisbon summit, they set a target of turning Europe into "the most competitive and dynamic knowledge-based economy in the world" by 2010.

At that time, against a background of surging US growth and the dot com boom, issues such as promoting electronic commerce, telecommunications deregulation and the reform of EU financial markets took the limelight.

But as they prepare for Barcelona, the Continent's leaders are recognising that even though Euroland's unemployment rate is still 8.5%, looming labour shortages in some regions and industries coupled with the difficulty of getting workers to move to where the jobs are, pose as big a challenge to the Continent's growth potential as any technological deficiencies.

This is why countries such as Germany are struggling to develop a highly selective immigration policy designed to fill skills gaps and why the EU Commission launched this month an " action plan" designed to deliver increased worker mobility in Europe by 2005.

Once again, as with the internet and information technology innovation, invidious comparisonsare made with the United States.

The Commission points out that whereas only 1% of the EU population moved between regions in 1999, in the US the figure is around six times higher.

Even this understates the legendary willingness of US workersto abandon their homes and communities in search of work, immortalised in the John Steinbeck novel The Grapes of Wrath.

A recent study of labour mobility in the EU by accountants PricewaterhouseCoopers and lawyers Landwell is dismissive of the limited progress being made in this area. …