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Introduction

Stiftung Wissenschaft und Politik German Institute for International and Security Affairs

SWP Co m ments 501962–2012

The Divisiveness of Mobility: Fuelling Populism in the and Schengen Areas WP S Roderick Parkes and Daniela Schwarzer

For years, politicians placed individuals’ mobility at the heart of the EU’s popularity. Projects such as the Schengen and Euro areas reduced obstacles to free movement, thereby creating greater employment chances as well as more choice and means of exchange for citizens. But not all citizens can or want to move. An immobile sub- section of the population has long worried that it bears the brunt of low-paid immi- grant labour. Now, it increasingly worries too that more mobile elites will emigrate and abandon it to face national economic decline and debt liabilities alone. If govern- ments are to convince their publics of the need for painful reforms to shore up the Euro and Schengen areas, they must ensure that all sections of society feel the benefits of mobility.

Flagship European projects such as the may have removed the controls and the Schengen -free between them, but there is still no real travel area have the aim of increasing the common policy on guarding their shared free movement of persons, goods, capital external or on dealing with immi- and services in order to fuel economic grants from outside the bloc, let alone asy- growth and employment. This is one basis lum-seekers or cross-border criminal net- for the EU’s popular legitimacy. Yet, it has works. In the Eurozone, while market inte- proved easier for the EU member states to gration was promoted, the first Barroso create these liberal areas than to sustain Commission neglected supervision and them. They were called into life largely by regulation, leaving the bloc vulnerable to “negative integration”. The member states the repercussions of the US-subprime crisis merely had to remove national obstacles – of 2007/2008. for example border controls – in order to International developments over the past increase intra-European mobility. Agreeing three years have revealed the structural on common flanking measures – positive weaknesses in both the Eurozone and the integration – has been rather neglected, . In the case of the Eurozone, and where attempted, much more difficult. the economic crisis uncovered the absence In the Schengen space, the member states of effective governance and surveillance

Roderick Parkes was head of the office of SWP until mid 2012 and will shortly become coordinator of the EU programme SWP Comments 21 at the Polish Institute for International Affairs (PISM) July 2012 Dr. Daniela Schwarzer is Head of SWP’s EU Integration Division

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mechanisms that would have been able to would create a land bridge to the south-east prevent the current crisis and to cushion for the first time. the impact of the shock. Governance If the past year has thus been a rude mechanisms for banking, budgetary and wake-up call for member governments, economic policies have to be improved in throughout 2012 they must race to remedy an acceptable way in order to regain the these structural lacunae since similar chal- ability to implement effective economic lenges are sure to arise. policy choices and to deliver public goods such as growth, employment and monetary stability. In case of competence transfers, Three major tasks for the the democratic quality of EU decision- northerners making needs to be improved. In the Schengen and Euro areas, much In the current crisis, however, these attention has focussed on the painful long-term structural reforms are taking reforms demanded of peripheral southern place alongside short-term crisis manage- states. But northern European govern- ment. The most pressing problem has been ments, such as the one in , also face a to implement a solution for debt-laden tough task when it comes to selling mea- that combines further debt restruc- sures to their citizens: first, these countries turing with a growth perspective, which have to agree to European “flanking mea- requires channelling financial support and sures” to shore up the two projects, even investment to the economy. Further rescue though this means losing discretion over packages and a possible debt restructuring sensitive issues such as budgetary affairs may be needed for other member states. and asylum and subjecting themselves to Recently, pressing problems in the banking stronger European oversight structures, for sectors, in particular in and , instance in the field of financial market have highlighted the possibly detrimental supervision. Second, northerners must bank/sovereign nexus. The resolution of recognise that past successes in exporting either the banking or sovereign their own domestic standards to the Euro- is impossible without progress in the other. pean level are part of the problem, with In the case of Schengen, the arrival of weak peripheral states signing up to com- 30,000 immigrants from North Africa last mon undertakings that are quite beyond year highlighted the weakness not only of them. Third, northerners need to defend the bloc’s common border policy, but its the liberal core of these projects, although immigration, immigrant-integration, the prospect of future crises will tempt asylum and refugee-resettlement measures them to re-regulate and re-nationalise their too. Where common home affairs standards activities. In three ways, then, they must do exist, supervision mechanisms need to give up power, in the narrow sense. be improved EU-wide in order to prevent implementation failures. These must be backed with greater operational and finan- 1. Deepening cial support for weak and overstretched In the Euro area, debates about a decisive peripheral states in areas such as asylum intensification of integration are ongoing. and the control of the shared external The Van Rompuy Report of June 2012 has border. And, as in the Eurozone, these long- sketched the path towards a banking and term structural reforms must somehow be as well as measures tackling calibrated with short-term measures related problems of legitimacy. The European to the leaky Greek-Turkish border, the Syria Council of June 28/29 has committed its crisis as well as ’s and ’s President to elaborate “a time-bound road accession to the Schengen area, which map for the achievement of a genuine - nomic and Monetary Union” in close co-

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operation with the member governments extensive domestic implications (e.g. some until mid-October 2012. sort of joint liability for public debt or an Here, concerns about competence trans- ESM with a banking licence that can actual- fers and a loss of sovereignty will determine ly borrow from the ECB). the scope of possible progress. The new In the Schengen area, the EU has been rules for budgetary policy and macro-eco- seeking to deepen integration already since nomic surveillance and coordination are 2009, aiming to improve the implementa- being applied for the first time this year tion of the . The lack of while the Fiscal Compact and the European progress was revealed last year in the wake Stability Mechanism (ESM) – a permanent of the Arab Spring, when northerners cal- rescue fund for Euro-area members – are led for greater scope to reintroduce domes- likely to enter into force soon. Conflicts tic border controls as the only means of between national spending and European protecting themselves from faulty stan- discipline are likely to occur. The key ques- dards in other member states. For a mo- tion is how the EU system handles this ment, it looked as though governments challenge without undermining its own would begin rolling back the principles of rules or provoking a polarization between free movement, but the European Commis- national constituencies and the EU system. sion quickly revised its proposals. It sug- The potential for polarization between gested ending the gentle system of peer-to- national imperatives and European ratio- peer review amongst member governments, nales is highlighted by the recent opposi- and replacing it with unannounced spot tion to an EU approach perceived to em- checks of its own. This put northerners in a phasise at the cost of economic dilemma. Whilst they are keen to improve growth. Voiced mainly by southern Euro- supervision of the peripheral members, pean leaders and a few social democrat and they remain hesitant to subject themselves socialist policy-makers in northern , to the same intensity of oversight or to this critique shows very clearly that the hand over powers to the Commission. chosen European strategy to cope with the Under the Danish presidency in the first sovereign debt crisis is by no way unani- half of 2012, this became a matter of inter- mously accepted. The European debate has institutional deadlock, with a sovereignty- finally become a domestic one, with an conscious Council finally deciding to side- EU-wide growth strategy and investment- line the Commission and Parliament. enhancing measures being demanded by And this is not the only sensitive area national opposition parties. In many states, where European integration is being such measures have become the quid-pro- deepened. With concerns about a further quo for the ratification of a Fiscal Compact influx of refugees to the Schengen area, that privileges budgetary austerity over member states will also have to reform the growth, cohesion and social objectives. EU’s common minimum standards on Meanwhile, there is growing criticism asylum if they are to meet the challenge of the European ’s (ECB) together. EU members have already com- rather lonely role as firefighter in the battle mitted to create by the end of 2012 a against the sovereign debt and banking common asylum system based upon uni- crisis. The ECB’s crucial support measures form standards. After years of deadlock, have reached such intensity that the Bank’s there are signs of movement. Yet, each pro- role has become a matter for overt national posal in the package hangs together with debate. If the crisis progresses, northern another, and progress in one (for example governments will be obliged to either the reception of asylum-seekers or the so- accept a discretionary role for the ECB that called laying down the transgresses its narrow treaty-based man- responsible for an asylum date or to set up credible alternatives with claim made in the EU) can be undermined

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by deadlock in another (asylum procedures credible commitments and tough but imag- or the fingerprinting of asylum-seekers). inative measures to avoid moral hazard. Moreover, the member states are trying to In the Schengen area, member states are avoid thorny issues such as a robust system putting the finishing touches to the reform for the relocation of asylum-seekers from of the Dublin regulation, under which one member state to another, although this asylum-seekers may be returned to the EU option was set out already back in 2001 state by which they gained entry to the during an earlier wave of regulation and bloc. This measure has long been felt to put was heavily discussed in a Commission undue pressure on the border states, which communication in December 2011. are the first port-of-call for many asylum- seekers who would otherwise have aimed for northern members. This feeling that 2. Stepping up solidarity northerners are shifting the burden to peri- Northern member governments are thus pheral states has undermined the latter’s being asked to draw up robust European appetite for cooperation and implementa- rules and invent joint instruments in order tion. The matter has come to a head. A to ensure a rise in standards in the south series of court cases has obliged northern- and east. In the face of domestic political ers to suspend the measure’s application hostility to this pooling of sovereignty, to Greece, with the European Court of Jus- northerners have tried to show that these tice ruling that “an may not new rules are essentially about norm trans- be transferred to a member state where he fer: through conditionality and sanctioning risks being subjected to inhuman treat- mechanisms, they are ensuring that any ment.” The pressure is now on to agree a formal loss of sovereignty is offset by the formal suspension-mechanism as well as imposition of their domestic standards and to provide technical and financial support interests upon other states. to struggling peripheral states. This tendency is clear not just in the In the form of the European Asylum conditions attached to financial support Support Office and the Frontex agency for offered to Eurozone members. In order to cooperation at the external border, mecha- ensure that the onus of nisms have been established for the pro- remains in the peripheral south and the vision of operational and technical assis- east of the Schengen area, for example, tance to the periphery. This year, however, northerners have pushed for greater scope it is financial assistance that will be on the to suspend weak states from the free-move- agenda. Under the EU’s proposed multi- ment provisions as well as for maintaining annual budget, states will have broad lee- the veto on hopefuls’ accession to the way to manage their own share of EU funds Schengen area. Yet, this marks a failure to for migration and security issues (“shared recognise one important root of the crisis management”). Northerners will therefore present in both projects: both the Schengen be keen to make full use of the budget’s and Euro regimes reflect northern stan- wording to carefully detail the use that can dards, putting a high adaptation burden be made of the money. But they must be on southern and eastern states with fewer careful that restrictive terms and condi- resources, less experience and divergent tions do not prejudice progress towards political and administrative cultures. A ownership and capacity-building in the sustainable solution will instead require periphery. They will also have to resist the special measures in favour of peripheral temptation – offered by the Commission countries. Northerners must offer opera- proposal – to shift too much funding to tional, technical and financial support to northern priorities, such as the expulsion those member states that still need to im- of illegal immigrants, at the expense of plement all rules – but in exchange for longer-term projects in “softer” areas,

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where peripheral states have traditionally 3. Protecting liberalism been weak, such as immigrant integration. The current shift from “negative integra- In the Eurozone, meanwhile, the debate tion” – the removal of national barriers to on financial solidarity is likely to gain pace. the free movement of goods, persons, ser- Member states will face the costs of bring- vices and capital – to “positive integration” ing the crisis countries on track, digesting – the creation of flanking measures in areas possible losses from a debt restructuring such as borders or – brings and setting up a credible growth strategy with it the temptation of re-regulation. In for this and other southern European the face of increasing populist and pro- countries suffering from high debt levels tectionist pressures at home, the northern- and low growth prospects. The debate on ers’ commitment to liberalism will be fiscal transfers is currently focussed on the tested. Some governments – like the one in question of how to channel public invest- – may look at national and European ment from the EU level to support the long- interventionism as the best means of pro- term development of member states in tecting themselves and the bloc from out- need. If the situation in the crisis countries side pressures, even at the expense of the becomes more acute, however, this focus original mission to encourage internal may shift – namely to help the recipient mobility and exchange. This kind of re- states to maintain the basic functions of the regulation could, of course, undermine the welfare state in order to prevent a societal very aims of the Schengen and Euro areas decline, which could create a breeding as well as disrupt moves by the EU to open ground for populism, extremism and polit- these internal goods to the outside world. ical instability. Should the political will If Eurozone policy-makers pursue this among the northerners be insufficient to course, they will likely fail in their quest for bear these short-termist measures, the only more efficient financial-market regulation. real alternative is to cast out troublesome For one thing, EU decision-making pro- states, with all the unpredictable contagion cesses are slow, with some member states effects this would entail (see SWP-Aktuell blocking legislative acts in the Economic 54/2011). and Financial Affairs Council as they seek The fact that countries with a compara- to secure competitive advantages for their tively low per-capita GDP find themselves financial centres. The financial supervisory on the donor side of the rescue mechanisms structures – and in particular the European further complicates the relationship be- Banking Authority – are scratching at the tween the northern core and its weaker limits of their competencies. For another, partners. Ireland and Greece have respective- efficient regulation would require a wider ly a GDP per capita (in purchasing power geographic scope than the Euro area or the standard, PPS) of 127 per cent and 82 per EU-27 only. Progress in the , however, is cent of the EU average. and Esto- slow to non-existent. nia, two countries on the donor side of the Meanwhile, the EU is desperately search- mechanisms, only have a GDP per capita in ing for “new sources of growth”, and in this PPS of 73 per cent and 67 per cent of the context the single-market programme has EU average. Should a country like Ireland, been rediscovered. With 2010’s draft Single moreover, base its recovery upon what Market Act, the has many other member governments perceive tabled an encompassing programme of as anti-social tax competition with striking- liberalisation. But it seems more and more ly low corporate tax rates? The issue of fair- obvious that, in some member states, these ness will gain new salience as soon as fur- objectives can only be pursued if they are ther rescue packages are needed – or worse, complemented by measures that can be as soon as donor countries actually lose sold as helping to maintain the key fun- their money in the case of recipient states. daments of European welfare states, for

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example more regulation in social policy, The divisiveness of mobility some degree of tax harmonisation or more The challenge facing northern member transfers. These proposals are not shared governments in making the case for these by, for instance, the or policies is not to be underestimated. The some central and eastern European mem- citizens of these highly-regulated states are ber states. Much progress is hence unlikely. angry at the way liberal European projects Or if there is joint progress on single- have exposed them to international pres- market issues, “regulatory compensation”, sures, and they felt more secure when their namely in the field of social and taxation governments enjoyed greater domestic dis- policies, will either be confined to the Euro cretion over issues such as immigration area or even be implemented only in an à la control or fiscal and economic policy. These carte fashion. governments will therefore struggle to con- Meanwhile, in the Schengen area, the vince their voters that the way to increase spectre of the reintroduction of national resilience to international pressures is to border checks and the unnecessary creation give up further national competencies. This of other forms of surveillance and control is particularly difficult as populist move- are not the only threats to the liberal prin- ments find the perfect breeding ground in ciples of free movement. The bloc has long situations of economic and social insecu- made up for its own failures to cooperate rity, of “unfair” burden-sharing and of in- on asylum, by “ex- ternational or legal constraints on govern- ternalising” their immigration and crime ments’ capacity to act. They offer seemingly controls – they have exported illiberal con- straightforward and cheaper “national solu- trols to their neighbours in order to shore tions” – in this case a break-up of the Euro up their liberal internal project. Countries area or a repatriation of competencies in neighbouring the Schengen area have been home affairs. conceived of as a “cordon sanitaire”, pre- There is nevertheless a means of making venting unwanted migrants from entering the case for these policies: the creation of the Union. European flanking measures based on soli- Rather than undertake the painful and darity is necessary to maintain intra-EU laborious task of deepening the EU’s policy mobility. Policy-makers have identified mo- on borders, asylum and immigration, the bility and as the bed- temptation will again be to shift the onus rock of the EU’s popularity. On an abstract for controlling migration to the EU’s neigh- level, this is because increased contact and bours. That would end badly. The approach exchange has seen European citizens grow of co-opting third countries into carrying closer, perhaps even transferring some of out controls for the Union worked well their loyalty from national governments to enough when the EU’s neighbours were the EU. In more practical terms, mobility is autocratic governments wary of letting a prerequisite for economic growth and a their nationals travel to the EU or keen for means of correcting economic and financial western approval, but the wave of democra- disparities within the internal market, tisation at the bloc’s periphery makes such whilst cross-border labour mobility is an an approach normatively and practicably important adjustment mechanism in the impossible. With negotiations underway Economic and Monetary Union in the case to conclude a “mobility partnership” with of shocks. Tunisia and , the EU needs to reach Most significantly, mobility is associated a liberal settlement with its neighbours. with the poorest and the unemployed – those social strata where populism and protectionism are usually most strongly anchored. By opening the scope for greater travel and migration, the EU has given

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those otherwise most hostile to European where, or who have simply invested heavily integration greater opportunities to seek in a particular location, cannot take advan- work in other member states. tage of the opportunities of mobility. Unsurprisingly then, the goal of increas- They also feel that they disproportion- ing personal mobility has become an over- ately bear the costs. One reason for this riding aim of the Schengen cooperation, an feeling lies in a classic fear of immigration: initiative originally aimed merely at reduc- the immobile are concerned they will bear ing waiting times for lorries at national the brunt for an influx of competitive customs points. It was also important for forces from abroad, seeing their wage rates the establishment of the single sink and societal integration falter. Yet, area, which aimed at giving citizens scope there is a second reason for their concerns. to spend cash in other member states As the popular reaction in Greece and without encountering exchange charges or Spain to the recent “exodus” of university even restrictions on exporting currency. graduates from southern and eastern The strategy seems to have paid off. The Europe suggests, EU citizens are worried “freedom to study, work and travel any- about emigration too. Europe’s immobile, where in the EU” is typically mentioned by it seems, worry about being left behind to around 45 per cent of interviewees in Euro- deal with daunting national challenges. barometer surveys as an element they asso- Economic decline, national debt liabilities, ciate closely with European integration. demographic aging and environmental The sense of association is particularly change are, after all, essentially territorial strong in the north (66 per cent in , in nature, and the mobile can avoid their and 58 per cent in , Eurobarome- effects simply by shifting regions. The ter 75/2011). Meanwhile, EU-wide, only a immobile do not have this luxury. small number of respondents associate Concerns about “brain drain” and the their country’s membership of the EU emigration of the well-qualified have been with an increase in crime (13 per cent) or a constant refrain in poorer EU member a deficit in border controls (18 per cent). states. Yet, this fear of “being left behind” Yet, it is notable that, in making the case by a more mobile elite has recently become for the reform of the Schengen and Euro a feature of politics in as areas, northern states have not played the well. In 2005/2006, when experi- mobility card. The enthusiasm for mobility enced net emigration for the first time in is not, it seems, as deeply anchored in soci- 40 years, there was widespread disquiet ety as they believed, nor is the support for that the “brightest and the best” were leav- free movement shared to the same degree ing the country – statistical analysis of by all social strata. This reflects something those leaving Germany confirming that that academics have been warning of for the emigrants were indeed better qualified some time: the opportunities and costs of than the compatriots they were leaving mobility are not evenly spread throughout behind. Meanwhile, figures on the intra-EU society, and this is reflected in patterns of migration of scientists and managers give and hostility to integration. many northern governments cause for The unemployed poor are, for example, concern, with , Denmark and the often the least mobile strata of society. frequently suffering net defi- Mobility is not, as so often assumed, an cits, even if analysis suggested the vast important lifeline to the poorest in society majority of emigrants return home. but rather a successful adaptation strategy dominated by those with economic and social capital seeking economic gain and Recognising trapped populations new skills. Individuals who do not have There are three quite serious implications the capital or language skills to settle else- for northern governments that follow from

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this suggestion that well-qualified elites, Ending unwelcome mobility offers rather than the low-skilled and unem- Without a concerted effort to change this, ployed, are the most mobile. the EU’s decision to base its legitimacy on Firstly, it means governments have mis- the highly divisive issue of mobility could read the character of the people who immi- backfire badly. The current efforts to shore grate to northern Europe. A mass influx up the Schengen and Euro areas must of poor and needy immigrants from North therefore be complemented by measures Africa or the eastern neighbourhood is un- to ensure that all citizens can make use of likely, even in the wake of Arab Spring-style their freedoms. This entails not only an uprisings. Recent projections of south-north improvement of classic mobility measures, migration point instead to the existence in such as better access to information about poor countries of sizeable “trapped popu- job opportunities through, say, the EURES lations” that simply do not have the re- portal, or final improvements to the por- sources to move (UK Government Office for tability of pensions, to the recognition of

© Stiftung Wissenschaft und Science). Rather than concentrating on the qualifications and to the facilitation of Politik, 2012 threat of mass immigration, the EU needs family reunification. It also means an active All rights reserved to concentrate on the implications of the effort on the part of the EU to tailor its

These Comments reflect development of large and potentially dis- existing mobility schemes to the demo- solely the authors’ views. gruntled immobile populations just beyond graphic profile and aspirations of those

SWP its periphery. citizens who need them most – the young, Stiftung Wissenschaft und Secondly, the incidence of trapped popu- the poor, and the badly qualified. Politik German Institute for lations pertains also to EU citizens, and to Organisations working with these pro- International and the patterns of migration from the south- grammes complain that their bureaucratic Security Affairs ern and eastern periphery to the north: nature is out of touch with the needs and Ludwigkirchplatz 3­4 those making the move to northern Europe sensitivities of the immobile. Those Euro- 10719 Berlin Telephone +49 30 880 07-0 following the eastern enlargement were, pean programmes aimed at school leavers, Fax +49 30 880 07-100 for example, often the skilled and ambi- for instance, seldom take account of the www.swp-berlin.org tious rather than the unemployed “welfare fact that youngsters may initially be ner- [email protected] tourists” feared by some governments. Yet, vous about going abroad but will probably ISSN 1861-1761 without more concerted policies to teach want to extend their stay once they get

immigrants language skills or to officially there, or that pupils may leave school be- recognise their work qualifications, north- fore the age of 18 when EU schemes start, ern governments succeeded in pushing or indeed that mobility policies must begin these newcomers into the low-skilled sec- even earlier through an active language tor, potentially creating a self-fulfilling policy. prophecy and causing tensions with less A concerted effort to improve mobility mobile sections of the local population. rates amongst the young, the poor, and Thirdly, northern governments have the badly qualified seems a necessary pre- misread the character of those of their requisite if the EU is to sustain its flagship citizens who will take advantage of the achievements. Yet, for northern European enhanced rights to move away. Increased governments – already faced with popular opportunities for mobility are unlikely to concerns about “welfare tourism” and an be welcomed across all strata of their soci- influx of low-skilled labour – investing in eties. Northern Europe likely has “trapped the mobility of this disadvantaged demo- populations” of its own, and these popu- graphic may be the tallest order of all. lations will be concerned about giving their mobile compatriots greater opportunities to abandon them to domestic problems.

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