Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern and Western covering Gy ır-Moson-, Vas and counties, that is, the Western region in Hungary, and province and certain territories of Lower Austria and Styria provinces in Austria

Presented under the commission of the National Employment Service by Empirica Institute of Economic and Social Research Ltd, Sopron (9400 Sopron, Ver ı József út 1 / Tel: +36 99 514 504 / www.empirica.hu) in Cooperation by MKW GmbH, Munich Péter Csizmár Lívia Kovácsevics Andreas Woidich Tina Brochmann Anna Halász

Sopron, February 2008 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Table of Contents Page

Executive summary 4 List of tables, figures and maps 5 List of abbreviations 6

1 Preface 8

2 Regional demarcation of the partnership 9

3 Labour market and economic structure 12 3.1 Population 12 3.2 Higher education training 17 3.3 Employment and economic structure 20 3.4 Incomes 27 3.5 Unemployment 29 3.6 Registered vacant jobs 35 3.7 Economic performance 38 3.8 Bilateral contacts between Hungary and Austria in external trade 43 3.9 The flow of capital, and the cross-border activities of enterprises 45

4 Flow of commuters and services 47 4.1 Free flow of the labour force 47 4.2 Commuters 49 4.3 Free flow of services and freedom of establishment 52

5 Necessity for the establishment of a EURES Pannonia cross-border Partnership 53 5.1 Existing structures of cross-border co-operation 53 5.2 Geographical parameters 57 5.2.1 Geographical parameters, transport infrastructure 57 5.2.2 Obstacles to mobility 61 5.2.3 Cross-border synergic effects 64 5.2.4 Labour market deficiencies (Training deficit and surplus) 65 5.2.5 The Austrian–Hungarian cross-border territory in European comparison 5.3 Results of the questionnaire survey 67

EMPIRICA, February 2008 2 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

5.4 Summary 69 5.5 Project ideas before the full opening of the labour market 70

6 Practical implementation 72 6.1 Fundamental considerations 72 6.2 Regions and partner organisations participating 73 6.3 Significance and length of validity of the Framework Agreement 74 6.4 Organs of the EURES partnership 75 6.4.1 The Steering Committee 75 6.4.1.1 Definition and tasks of the Steering Committee 75 6.4.1.2 Members of the Steering Committee 75 6.4.1.3 Mandate and major data of the Chairperson 78 6.4.1.4 Decision-making and voting procedures 78 6.4.2 Working groups 79 6.4.3 Co-ordination 79 6.4.4 Budgetary liability 82 6.5 Financing and budget 83 6.6 EURES advisers 85 6.7 Co-operation with other EURES-T structures 87 6.8 Time schedule 88 6.9 Summary 90 Attachement

EMPIRICA, February 2008 3 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Executive Summary According to preliminary analyses (Chapters 1 to 5.2), it is clear that the establishment of an EURES-T partnership in the Austrian-Hungarian border region is reasonable and justified, and the establishment may be a very useful initiative for the future for the stakeholders of the labour markets of both countries.

• As regards its territory, the size of the population and the number of commuters, the planned extension of the partnership corresponds to the average sizes of already existing partnerships. • The region has extensive cross-border economic and trade relationships. • The economic activity of enterprises is strong, and their cross-border relation system is well-established, and although the level of cooperation is not yet appropriate, initiatives have been launched to accelerate this. • Despite the restriction of the free movement of the labour force, a higher level of cross-border mobility is to be perceived as regards employment compared to already operational partnerships. • Cross-border transport infrastructure, although with some deficiencies, does not have basic constraints against cross-border employment. The infrastructure expands continuously, and its modernisation is on the agenda in both countries. • The major factor preventing mobility in the region is the restriction of the free movement of the labour force which, following facilitation planned for 2009, shall be fully withdrawn by 01.05.2011 at the latest. Despite the retained restrictions, it is probable that the annual Hungarian quota granted employment permits in Austria shall increase continuously and it shall generate an ever-growing demand for the information provision activities of the EURES-T partnership to be established in the future. • In the region, there are active demands as regards counselling and information provision on the cross-border labour market. • Now there are a lot of already existing cross-border organisational or project structures in the region which supplements and promotes the operation of the EURES-T partnership.

EMPIRICA, February 2008 4 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

List of tables, figures and maps Page Tables Table 1 Regional division of the study region 10 Table 2 Size of the study area 11 Table 3 Major demographic and labour market data of the study area 11 Table 4 Population trends in the study area 12 Table 5 The composition of the population in the study area 15 Table 6 Development of the number of non Hungarian citizens, 1994 – 2006 16 Table 7 Universities and colleges at the Austrian side of the study area according to the numbers of students and majors 18 Table 8 Universities and colleges at the Hungarian side of the study area according to the numbers of students and majors 19 Table 9 The development of the number of the employed by workplace in the study area between 2001 and 2006 20 Table 10 Employment rate (15-64 years), % 25 Table 11 Monthly net salaries (in EUR) – Processing industry (single individual without a child, 100% of the AW* salary) 27 Table 12 Available income per capita of households as regards purchasing power parity (GDP-PPP) 27 Table 13 Costs of employment in processing industry (in EUR) 28 Table 14 Structural unemployment 2006 33 Table 15 The annual average of the number of monthly registered jobs 35 Table 16 Gross domestic product (GDP), current price, million EUR 38 Table 17 Per capita GDP-PPP value, in the proportion of EU27 average, % (EU-27=100) 40 Table 18 Division of gross added value (GAV) (prices in million EUR) in a economic sectors, % 41 Table 19 The external trade balance of Austria and Hungary between 2004 and 2006 43 Table 20 15 major trading partners of Austria 43 Table 21 Capital investments, 2001-2005 (million EUR) 45 Table 22 The number of workplaces generated by Austrian capital investment by target area (persons) 45 Table 23 The number of workplaces generated by foreign capital investment in Austria (persons) 46 Table 24 The trends in the quotas under the Commuters Agreement and the numbers of submitted applications, issued permits and certificates for exemption from authorisation 48 Table 25 Distance and travel time between major and cities (Car and train) 61 Table 26 The EURES-T Pannonia in European comparison 66 Table 27 Project proposals before the full opening of the labour market 70 Table 28 Distribution of seats on the Steering Committee 77 Table 29 Time schedule for the establishment of “EURES-T Pannonia Cross-border Partnership” 88

EMPIRICA, February 2008 5 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Figures Figure 1 The number of the registered unemployed, average in 2001-2006 29 Figure 2 The seasonal changes of unemployment in 2005/2006 32 Figure 3 Trends of vacant jobs registered monthly between June 2006 and July 2007 36 Figure 4 The annual average between 2002 and 2006 of monthly registered jobs 36 Figure 5 Regional division of gross domestic product (current price, million EUR), % 39 Figure 6 The “filtering” effect of factors preventing mobility 62 Figure 7 Basic Organisational Structure of the „EURES-T Pannonia Cross-border Partnership” 76 Figure 8 Activity development and implementation within “EURES-T Pannonia 84 Cross-border Partnership”

Maps Map 1 Regional demarcation of the partnership 9 Map 2 Population density in the study area, 2007 13 Map 3 The trend of the number of the inhabitants in the study area, 2002-2007 14 Map 4 Universities and colleges in the study area, 2007 17 Map 5 The development of the number of the employed between 2002 and 2006 21 Map 6 The number of the employed / population of working age by economic sectors 2004/2006 (annual average) 22 Map 7 The yearly average in 2006 of the unemployment rate 30 Map 8 The study of the traffic of Eastern border-crossings of Austria for target traffic 50 – commuters, individual travel (persons, 2005) Map 9 The study of the traffic of Eastern border-crossings of Austria for target traffic – commuters, public travel means (persons, 2005) 50 Map 10 Transport infrastructure of the study area (network of roads and railways) 59 Map 11 Accessibility of the Austrian border region (Austrian-Hungarian) (within 90 minutes) 60

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List of abbreviations

EMPIRICA, February 2008 7 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

1 Preface Hungary acceded to the European Union on 1 May. Despite that the free flow of the labour force should be provided for between old and new Member States following a provisional period not exceeding seven years ((2+3+2), even now we can see new opportunities for the creation of official and organised cross-border labour market cooperation between Hungary and Austria. Such opportunities and the newly emerging situation encouraged the National Employment Service to have a feasibility study prepared on the establishment of an EURES- T cross-border partnership following a longer preparation phase with its Austrian partner organisations in the Austrian–Hungarian cross-border region. The commission was awarded to Empirica Kft seated in Sopron in cooperation by MKW GmbH in Munich. The study consists of two modules:

Module 1 • Socio-economic description of the border region and analysis of cross-border commuter flows.

• Establishment of a EURES-T partnership and assessment of the necessity of the establishment: - Existing structures for cross-border collaborations. - Analysis of existing obstacles to mobility and assessment of ways in which EURES can help to overcome them.

• Definition of the optimum geographical scope of the partnership according to the

actual number and structure of commuters.

Simultaneously with Module 1, Module 2 is elaborated under the title “Suggestions for the establishment of organisational and technical structures necessary for the creation of EURES-T partnership”.

Module 2 • Definition of the optimal composition of partner organisations in the partnership. • Working out of recommendations regarding the organisation of the cross-border partnership. • Development of recommendations for priority measures and project activities. • Development of a draft contract.

This feasibility study report is organised according to these two modules. Chapters 2 to 5 contain the results from Module 1, while those of Module 2 are summarised in Chapter 6.

One of the biggest problems faced in this study was the availability, quality and comparability of statistical data from Hungary and Austria. While the basic economic and employment data are available and comparable to a large extent, the availability, reliability and comprehensive nature of data on commuters was rather deficient which resulted in difficulties for comprehensive analysis. Nevertheless, the study team was able to establish comparability and analysis for data by analysing studies from other fields, involving expert’s opinions and based on already existing experience.

EMPIRICA, February 2008 8 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

2 Regional demarcation of the partnership

Regional demarcation of the partnership as shown in Map 1 and Table 1 covers Gy ır- Moson-Sopron, Vas and Zala counties in Hungary, the whole Burgenland province (, , Neusiedl, , Oberwart, Stegersbach and Jennersdorf labour districts), Baden, Berndorf, Bruck a. d. Leitha, Mödling, Neunkirchen, Schwechat, Wiener Neustadt as Southern labour districts of Lower Austria, and Feldbach, Fürstenfeld and from among the labour districts of Styria in Austria.

Map 1: Regional demarcation of the partnership

Source: Own map

Austrian labour districts usually correspond to political administrative units of Austria (political districts). The administrative units of Burgenland, Güssing are named Stegersbach at the labour centre. The labour of Eisenstadt consists of the neighbourhood of Eisenstadt, Rust and Eisenstadt. Besides, it is only the south-eastern part of the administrative unit named “the neighbourhood of ” (labour district of Schwechat) that belongs to the Austrian-Hungarian cross-border area and is thus covered by the study. The administrative unit of Baden consists of the labour districts of Baden and Berndorf, and the city of Wiener Neustadt and the political districts of Wiener Neustadt together constitute the labour district of Wiener Neustadt.

From the Eastern Styria region classified as NUTS 31, Feldbach, Fürstenfeld and Hartberg belong to the area under consideration, while Radkersburg and Weiz districts fall outside the studied area.

1 NUTS is a hierarchical system for the clear determination and classification of the territorial units of the European Union. Territorial levels as defined by EUROSTAT on the level of the Territorial Statistical Regions EMPIRICA, February 2008 9 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

In Hungary, Gy ır-Moson-Sopron, Vas and Zala counties constitute the Region in Hungary. Gy ır-Moson- consists of , Gyõr, Kapuvár, Mosonmagyaróvár, Pannonhalma, Sopron-Fertõd and Tét microregions, consists of Celldömölk, , Kõszeg, Körmend, Szentgotthárd, , Sárvár, Vasvár and İriszentpéter microregions and consists of -Hévíz, , , , and Zalaszentgrót microregions.

Table 1: Regional division of the study region Labour districts / NUTS 2 NUTS 3 Microregions Burgenland Middle Burgenland Oberpullendorf Northern Burgenland Eisenstadt Mattersburg Neusiedl Southern Burgenland Oberwart Stegersbach Jennersdorf Lower Austria Southern Lower Austria Berndorf Wiener Neustadt Neunkrichen Southern neighbourhood of Vienna Baden Bruck/Leitha Mödling Schwechat Styria Eastern Stájeroszág Feldbach Fürstenfeld Hartberg Western Transdanubia Gyõr-Moson-Sopron Csorna Gy ır Kapuvár Mosonmagyaróvár Pannonhalma Sopron-Fert ıd Tét Vas Celldömölk Csepreg Kıszeg Körmend Szentgotthárd Szombathely Sárvár Vasvár İriszentpéter Zala Keszthely-Hévíz Lent Letenye Nagykanizsa Zalaegerszeg Zalaszentgrót Source: Hungarian Central Statistical Office and Statistik Austria 2007.

With its territory of more than 21,000 km², the study area covers the whole Austrian- Hungarian cross-border area. The Austrian part of the study area amounts to 12% of the whole territory of Austria and, within this, the territory in Lower Austria is 20% of Lower

divided into five levels (Nomenclature des Unités Territoriales Statistiques - NUTS) (The division refers to the area and the number of the inhabitants, EUROSTAT 2007): a) NUTS I. macroregion (province) b) NUTS II region c) NUTS III microregion (county) d) NUTS IV microregions e) NUTS V. EMPIRICA, February 2008 10 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Austria province while the Styrian area is 12% of Styria. The whole Burgenland province belongs to the study area with its 3,965 km² altogether.

The three counties in Hungary, with their 11,326 km², amount to 12% of the territory of Hungary.

Table 2: Size of the study area

Area Area (km²) Burgenland 3,965 Southern Lower Austria 3,902 Regions in Styria 1,947 Gyõr-Moson-Sopron 4,206 Vas 3,336 Zala 3,784 Austrian part 9,814 Hungarian part 11,326 Total 21,140 Source: Hungarian Central Statistical Office 2007, Statistik Austria 2007.

Major and most important cities and towns of the study area (the number of the inhabitants are indicated in brackets):

- Wiener Neustadt (39,652), Baden (25,212), Mödling (20,695), Schwechat (15,990), Perchtoldsdorf (14,398), Eisenstadt (12,190) and Neunkirchen (12,020) in Hungary:

- Gyõr (126,322), Szombathely (79,640), Zalaegerszeg (60,088) Sopron (56,206), Nagykanizsa (51,546) and Mosonmagyaróvár (31,322).

The following Table 3 provides an overview on major demographic and labour market data of the study area.

Table 3: Major demographic and labour market data of the study area Hungarian Austrian part Total part Number of inhabitants 2007 986,101 999,361 1,985,462 Area (km²) 9,814 11,326 21,140 Population density 100 88 94 Employees (AT) / Population of working age 305,889 425,586 731,475 (HU) 2006 Population of working age (15-65) 2006, % 66.7 69.7 - Employment rate % 70.5 62.8 - Number of the registered unemployed 2006 27,276 27,369 54,645 Number of commuters 2005 300 9.500 9.800 Source: Statistik Austria, Hungarian Central Statistical Office, HVB, EUROSTAT, Austrian and Hungarian labour centres 2007, Planungsgemeinschaft Ost 2005

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3 Labour market and economic structure

3.1 Population

The population of the cross-border study area was close to 2 million in January 2007 which is divided between the Austrian and the Hungarian part in rather the same proportion, with 1 million inhabitants in each. Approx. one quarter of those living in the study area (533,713 persons) live in regions of Lower Austria (Industrieviertel), 280,257 persons in Burgenland and 158,131 persons in Styria.

In the same period, the number of inhabitants is 442,667 in Gy ır-Moson-Sopron county in Hungary, 263,251 in Vas and 293,443 in Zala county. (See Table 4).

Table 4: Population trends in the study area Change 02-07 in 2002 2003 2004 2005 2006 2007 % Eisenstadt 52,256 52,356 52,546 53,125 53,574 53,861 3,1 Mattersburg 37,423 37,440 37,606 37,902 38,129 38,358 2,5 Neusiedl 51,547 51,613 51,805 52,169 52,618 53,037 2,9 Oberpullendorf 37,728 37,577 37,474 37,505 37,402 37,473 -0,7 Oberwart 53,111 52,959 52,853 53,158 53,278 53,269 0,3 Stegersbach 26,946 26,705 26,610 26,604 26,534 26,541 -1,5 Jennersdorf 17,929 17,883 17,746 17,752 17,782 17,718 -1,2 Burgenland 276,940 276,533 276,640 278,215 279,317 280,257 1,2 Wiener Neustadt 109,982 110,449 111,272 112,155 113,179 113,789 3,5 Neunkrichen 85,858 85,867 85,952 86,408 86,723 86,697 1,0 Baden* 126,701 127,686 129,192 130,670 132,425 133,741 5,6 Bruck 40,155 40,300 40,509 41,028 41,447 41,760 4,0 Mödling 106,567 107,310 108,120 109,762 110,812 111,726 4,8 Vienna 101,755 102,576 103,689 105,476 107,222 108,749 neighbourhood** 6,9 Lower Austrian 515,263 517,612 521,045 526,023 530,586 533,713 areas 3,6 Feldbach 67,498 67,489 67,515 67,556 67,656 67,626 0,2 Fürstenfeld 23,007 22,966 23,013 23,037 23,092 23,027 0,1 Hartberg 67,835 67,655 67,835 67,704 67,750 67,478 -0,5 Styrian areas 158,340 158,110 158,363 158,297 158,498 158,131 -0,1 Austrian part 950,543 952,255 956,048 962,535 968,401 972,101 2,3 Gyõr-Moson-Sopron 439,240 439,046 440,138 439,922 441,606 442,667 0,8 Vas 268,591 267,429 266,342 265,229 264,361 263,251 -2,0 Zala 299,112 297,853 296,705 295,197 294,175 293,443 -1,9 Western 1,002,959 1,004,328 1,003,185 1,000,348 1,000,142 999,361 Transdanubia -0,4 Total 1,953,502 1,956,583 1,959,233 1,962,883 1,968,543 1,971,462 0,9 * The labour district of Berndorf belongs to the political district of Baden. ** According to data from the labour centre, the number of the inhabitants of the Schwechat labour district was 46,428 in 2006 while 43,818 in 2001.

The population density of the study area in Austria was an average of 100 persons/km². This value roughly corresponds to the average population density of Austria. Burgenland (70 persons/km²) and the Styrian part (81 persons/km²) are definitely populated less densely than Industrieviertel in Lower Austria with its average of 130 persons/km².

EMPIRICA, February 2008 12 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Map 2: Population density in the study area, 2007

Source: Own map, according to data from the Hungarian Central Statistical Office, Landesstatistik Burgenland, Steiermark, Niederösterreich and Statistik Austria, 2007

Within the province of Burgenland, Mattersburg (160) and Eisenstadt (104) districts and towns are the most densely populated areas. Less densely populated are the districts of Neusiedl, Oberpullendorf and Stegersbach with their approx. 50 persons / km² population density. The population density indicator of Styrian areas is 81 persons / km² which slightly exceeds the provincial indicator of 72 persons / km². Feldbach (93) and Fürstenfeld (88) are a bit more densely populated than Hartberg (71).

Industrieviertel, that is, Southern areas of Lower Austria and the Southern neighbourhood of Vienna is, in national comparison, the economically strongest and most densely populated region in Austria. Especially densely populated districts are Mödling (400), the neighbourhood of Vienna (221) and Baden (176). These districts belong to the neighbourhood of Vienna, with a significant number of commuters.

The Hungarian cross-border region has an indicator of an average 88 persons / km² which clearly shows that it is less densely populated than Hungary regarding its national average (108 persons / km²). Gy ır-Moson-Sopron county has 105 persons / km² which is close to the EMPIRICA, February 2008 13 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Hungarian average, while Vas and Zala counties have 79 persons / km² and are significantly less densely populated.

Heavily populated districts are the cities of Gy ır (237), Sopron (109), Szombathely (176) and Zalaegerszeg (107) and their neighbourhoods.

Map 3 shows the trend of the number of the inhabitants in the region between 2002 and 2007.

Map 3: The trend of the number of the inhabitants in the study area, 2002-2007

Source: Own map according to the data of the Hungarian Central Statistical Office, Landesstatistiken Burgenland, Steiermark, Niederösterreich and Statistik Austria, 2007

What is extremely striking is that the number of inhabitants grew significantly in districts south from Vienna, e.g., in Schwechat (6.9%), Baden (5.6%), Mödling (4.8%) and Bruck (4.0%) which is due to the good economic situation and the significant labour need, most of all (see 3.3 Employment and economic structure). In Austria, it is mostly the relevant districts of Styria – Feldbach (0.2%). Fürstenfeld (0.1%) and Hartberg (-0.5%) – and the southern part of Burgenland – Stegersbach (-1.5% and Jennersdorf (-1.2%) – that the number of the inhabitants stagnates or is reduced.

The relevant territories of Hungary are rather characterised by emigration. Exceptions are the regional centres, e.g., Gy ır (1.7%) and Sopron (1.6%) as well as cities and towns close to

EMPIRICA, February 2008 14 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary the border, like Mosonmagyaróvár (1.3%) and K ıszeg (1.7%) and the Keszthely-Hévíz area next to the (0.9%). The population figure significantly fell primarily in economically weaker southern areas of the region, like Letenye (-6.2%), Õriszentpéter (- 6.2%), Vasvár (-5.4%) and Lenti (-5.1%).

Table 5 shows the age composition of the population and presents the proportion of foreigners.

Table 5: The composition of the population in the study area The The proportion 2006 0-14 15-64 65+ number of of foreigners foreigners, % Eisenstadt 53.574 14.5 66.7 18.8 3.073 5,7 Mattersburg 38.129 15.2 66.5 18.3 2.286 6,0 Neusiedl 52.618 13.9 66.6 19.5 2.418 4,6 Oberpullendorf 37.402 13.4 64.9 21.6 1.353 3,6 Oberwart 53.278 14.3 66.5 19.3 2.208 4,1 Stegersbach 26.534 12.5 65.9 21.6 1.117 4,2 Jennersdorf 17.782 13.2 66.1 20.7 561 3,2 Burgenland 279.317 14.0 66.3 19.7 13.016 4,7 Wiener Neustadt 113.179 16.0 67.0 17.0 9.057 8,0 Neunkrichen 86.723 15.2 65.6 19.2 5.665 6,5 Baden 132.425 16.1 67.4 16.5 14.783 11,2 Bruck 41.447 15.0 66.7 18.3 3.244 7,8 Mödling 110.812 15.7 66.9 17.4 9.746 8,8 Vienna neighbourhood 107.222 15.7 67.0 17.3 9.688 9,0 Lower Austrian areas 544.586 15.7 66.9 17.4 52.183 9,6 Hartberg 67.656 15.9 67.4 16.7 1.726 2,6 Fürstenfeld 23.092 15.9 66.3 17.8 794 3,4 Feldbach 67.750 15.4 66.5 18.1 1.851 2,7 Styrian areas 158.498 15.8 66.8 17.4 4.371 2,8 Gyõr-Moson-Sopron 441.606 14.9 70.1 15.1 - - Vas 264.361 14.6 69.5 15.8 - - Zala 294.175 13.9 69.3 16.8 - - Western Transdanubia 1.000.142 14.5 69.7 15.8 - - Source: Hungarian Central Statistical Office, Landesstatistiken Burgenland, Steiermark, Niederösterreich and Statistik Austria, 2007

EMPIRICA, February 2008 15 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Table 6: Development of the number of non Hungarian citizens, 1994 – 2006 Number of non Hungarian citizens Year male female total 1995. 37 667 43 759 81 426 1996. 35 553 41 844 77 397 1997. 33 660 40 081 73 741 1998. 32 265 38 879 71 144 1999. 32 955 39 400 72 355 2000. 35 364 41 321 76 685 2001. 37 295 43 115 80 410 2002. 38 082 43 890 81 972 2003. 39 578 45 689 85 267 2004. 42 278 48 052 90 330 2005. 46 247 51 675 97 922 2006. 51 249 55 011 106 260

Source: Office of Immigration and Nationality, www.bmbah.hu, 2006 * Regional dates about non Hungarian citizens are not available. The national dates were analysed.

The number of registered non Hungarian citizens continuously increased following the reduction between 1996 and 1998 in recent years and was almost 35,000 more on 1 January 2006 than in 1998. The number of those given the refugee status is 1,851, showing no change in volume compared to the previous year. 48% of non Hungarian citizens is male and 52% female. Most of them, that is, 34% live in , 12% in according to the register and 23% in the following five counties: Csongrád, Szabolcs-Szatmár-Bereg, Hajdú-Bihar, Bács-Kiskun and Fejér. 72% of non Hungarian citizens are 20 to 59 year old and 14% even younger. On 1 January 2006, almost 82% of all non Hungarian citizens entered into the register of personal data and addresses are citizens of a European country. 43% of these are almost 38,000 Romanians, 14,000 , more than 10,000 Ukrainians, almost 9,000 Serbians and Montenegro citizens.

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3.2 Higher education training opportunities

The study area has 12 universities and colleges altogether, from which 7 are located in Hungary and 5 in Austria.

Map 4 provides an overview on the number of operating faculties (Hungary) and majors (Austria) at training places.

Map 4: Universities and colleges in the study area, 2007

Source: own map

In 2006, a total of 4,000 students studied at colleges of the study area in Austria while 32,000 at universities and colleges in the Hungarian part (see Tables 7 and 8). As to majors and faculties, a close relationship can be traced in the study area between training opportunities of regional institutions issuing higher education qualifications and the local economic structure and related sector specific labour force demand. The Austrian side is stronger, e.g., on the level of colleges, in the fields of majors related to tourism, health care and business services while Western Transdanubia is stronger in the fields of agriculture, forestry, engineering studies, IT and food technology.

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Table 7: Universities and colleges at the Austrian side of the study area according to the numbers of students and majors Number of students, College majors 2006/2007 academic year Pinkafeld 434 Building Technology and Management 28 Energy and environment management 28 Health care management and health protection 30 Energy and environment management 221 Health care management and health protection 104 Sustainable energy systems 23 Eisenstadt 945 International economic relationships 159 IT 62 Information and Communication Solutions (ICS) 93 International economic relationships 325 International wine management 56 International wine marketing 34 IT 73 Applied knowledge management 72 Human resource management and labour law 20 European studies – EU project management 18 Internet technologies 33 Bad Gleichenberg 337 Touristical health management 151 Touristical health management 116 Dietetician 13 Physiotherapy training 31 Ergotherapy training 26 Wiener Neustadt 2.333 Economic counselling 253 Precision, system and information technology 113 Military management 428 Logistics 11 Geoinformation technologies 11 Economic engineer 262 Economic engineer 66 Mechatronics / Microsystem techniques 88 IT 80 Economic counselling 799 Economic counselling 48 Ergotherapy training 60 Biomedical technology 41 Speech therapy 11 Radiological technology 37 Police management 25 Source: Bundesland- bzw. Bezirksprofil, 2006 Austrian labour centre

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Table 8: Universities and colleges at the Hungarian side of the study area according to the numbers of students and majors Number of Number of majors students Gy ır 9 16,144 Széchenyi István University Health Care and Social Studies Institute Faculty of Law and Economic Studies Faculty of Technical Studies Institute of Music Mosonmagyaróvár 1 974 University of Western Hungary Faculty of Agriculture and Food Studies Sopron 4 5,196 University of Western Hungary Apáczai Csere János Teacher’s Training Faculty Benedek Elek Pedagogical College Faculty Faculty of Forestry Faculty of Forestry Industry Engineering College Faculty of Geoinformatics Faculty of Economy Faculty of Agriculture and Food Studies GY İR-MOSON-SOPRON COUNTY 14 22,314 Szombathely 9 5,934 Berzsenyi Dániel College College Faculty of Arts College Faculty of Sciences College Faculty of P. E. and Fine Arts VAS COUNTY 9 5,934 Keszthely 2 1,330 Georgikon Faculty of Agriculture Nagykanizsa 1 423 Pannon University, Branch of Nagykanizsa Zalaegerszeg 4 1,889 Budapesti Economic College, College Faculty of Finances and Accounting, Institute of Zalaegerszeg PTE – College Faculty of Health Care University of Technical and Economic Studies of Budapest, Faculty of Engineering, Special Training in Zalaegerszeg Gábor Dénes Technical and IT College Zalaegerszeg Public Foundation for Higher Education ZALA COUNTY 7 3,642 TOTAL OF WESTERN TRANSDANUBIA 30 31,890 Source: National Higher Education Information Centre, 2007

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3.3 Employment and economic structure

In the study area, the number of the employed was 731,475 in 2006 2 from which 42% was employed at the Austrian territory and 58% at the Hungarian one.

In the Austrian part of the study area, we can see the number of those employed to grow, basically due to the conjunctural development of recent years. The strongest growth was produced by the districts of Neusiedl, Oberwart, Stegersbach and Mödling by more than 20% (see Table 8). While the Austrian part saw the number of the employed grow by 10.1% altogether, this value was reduced by 2.0% in the Hungarian part. As to the whole study area, the number of the employed grew by 2.7% between 2001 and 2006 on the average (see Table 8).

Table 9: The development of the number of the employed by workplace in the study area between 2001 and 2006 Change 01-06, 2001 2006 % Eisenstadt 25,083 29,442 17,4 Mattersburg 9,073 9,663 6,5 Neusiedl 10,952 13,955 27,4 Oberpullendorf 8,542 9,515 11,4 Oberwart 13,243 16,308 23,1 Stegersbach 4,348 5,250 20,7 Jennersdorf 3,620 3,697 2,1 Burgenland 74,861 87,830 17,3 Baden* 34,860 34,155 -2,0 Bruck/Leitha 7,951 8,348 5,0 Mödling 50,279 60,840 21,0 Neunkrichen 21,405 20,584 -3,8 Vienna neighbourhood** 20,886 23,595 13,0 Wiener Neustadt 33,532 34,783 3,7 Lower Austrian areas 168,913 182,305 7,9 Feldbach 13,721 13,940 1,6 Fürstenfeld 7,001 7,599 8,5 Hartberg 13,384 14,215 6,2 Styrian areas 34,106 35,754 4,8 Austria 277,880 305,889 10,1 Gyõr-Moson-Sopron 188,669 185,296 -1,8 Vas 118,737 113,805 -4,2 Zala 126,783 126,485 -0,2 Western Transdanubia 434,189 425,586 -2,0 Total 712,069 731,475 2,7 Source: Austrian and Hungarian labour centres, 2007

2 While the number of the employed is relevant for Austria, published by Hauptverband der österreichischen Sozialversicherungsträger (HVB), Hungary uses the number of the population of working age according to the calculation methods of the Hungarian Central Statistical Office. EMPIRICA, February 2008 20 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Map 5: The development of the number of the employed between 2002 and 2006

Source: Own map according to the data of Austrian labour centres and the Hungarian Central Statistical Office, 2007

EMPIRICA, February 2008 21 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Map 6: The number of the employed / population of working age by economic sectors 2004/2006 (annual average)*

Source: Own map according to the data of Austrian labour centres and the Hungarian Central Statistical Office, 2007 * in Austria, the number of the employed is used (data from 2006), while in Hungary, data of the population of working age are available (data from 2004).

Burgenland The labour district of Eisenstadt with its 30,000 employees can be considered the economic centre of Burgenland. Between 2001 and 2006, the number of the employees grew by 17.4% in this district (see Table 9). This strong growth is related to growth of the tertiary sector (and mainly in the fields of economic services). In this district, the presence of the tertiary sector is above the average, and mainly sectors of the public sphere, trade, economic services and tourism are dominant. Major service providers include the Office of the Government of the Province of Burgenland, the Hospital of Eisenstadt and Hypo-Bank Burgenland AG. In the province of Burgenland, the proportion of the presence of agriculture and forestry are high, especially as a result of the significant agrarian activities of the northern part of the EMPIRICA, February 2008 22 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary province where plant production (vegetables, special plants, wine) and plant breeding are present.

Apart from Northern and Middle Burgenland where agriculture is still significant, Southern Burgenland is rather dominated by the secondary sector due to the presence of textile and electronics businesses active in this area which established themselves in Southern Burgenland in the 1960s and 1970s mainly.

In the district of Neusiedl, the number of employees grew mainly in the tertiary sector (trade, tourism, health care and social benefits), and in the secondary sector as well (basically in the plastic industry). In the district of Oberwart, it is primarily the service sector that managed to raise the number of employees, while the secondary sector shows a weak increase only. In the district of Stegersbach, both the tertiary sector (mainly tourism, health care and social benefits) and the secondary sector (wood industry) saw the increase of the number of employees.

Study areas of Lower Austria Regarding the whole territory of Lower Austria, the number of employees was 515,489 in 2006. This value shows a slight difference only as compared to 2001 data, and the number of employees changed only to a very limited extent (-0.03%). The number of the employees increased the most in the areas of the neighbourhood of Vienna (southern and northern territories) and of St. Pölten. This growth is due to changes in the service sector mainly. In 2006, 1.4% of the employees was employed in the primary, 28.3% in the secondary and 70.3% in the tertiary sector. In the biggest province of Austria, the presence of industry is very high within the industry (28,3%), and intensive agrarian economy is also determining. Major industrial sectors include machine and steel industry, electronics, stone and ceramics industry, iron and metal processing, food industry and the manufacturing of consumer goods as well as the chemical industry.

The economic policy of Lower Austria is significantly shaped by clustering, that is, the creation of strategic associations between businesses. Creative cooperation and the sharing of existing competences may offer an important competitive edge for participating enterprises.

In territories relevant for the study of Lower Austria, the number of employees was 182,305 in 2006. The relevant territory of the province saw a growth of 7.9% between 2001 and 2006 as to the number of employees (See Table 9)

The economic structure of the district of Mödling is determined by the service sector where trade and economic services play an important role. In 2006, 78.6% of all the employees worked in the tertiary sector, 20.6% in the secondary sector and 0.8% in the primary one. As mentioned already above, the number of employees grew by more than 20% in the district between 2001 and 2006 (See Map 5).

The economic structure of the district of Schwechat is also determined by the presence above the average of the service sector in which transport (the international airport of Vienna) and economic services play an important role. In 2006, almost 80% of the employees were engaged in the service sector. Among major service providers of Schwechat, we can find Austrian Airlines Group, Österreichische Luftverkehr AG with 8,421 employees and Flughafen Wien AG with 3,834 employees.

The district of Wiener Neustadt is predominated by the tertiary sector, basically with the sectors of trade, economic services and health care and social benefits. Besides, the

EMPIRICA, February 2008 23 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary secondary sector is present above the average in the district, and basically it is construction industry which has a significant role.

The district of Baden/Berndorf is characterised by the presence above the average of the tertiary sector and the secondary sector. In 2006, 2.2% of the employees worked for the primary sector, 38.3% in the secondary and 59.5% in the tertiary sector. In the fields of industry and professional works, primarily machine production, metal industry and construction industry have dominance. As to the service sector, trade, public services and economic services have important role to play.

The district of Neunkirchen is situated in at a major transport node (highway of Semmering, southern motorway). The advantageous location benefits most of all the areas of the basin of Vienna (Neunkirchen, Ternitz, Wimpassing) and those next to Höllental (Gloggnitz, Reichenau an der Rax).

In the district of Neunkirchen, the number of employees shows a decreasing trend. Between 2001 and 2006, their number fell by 3.8%, to the detriment of the secondary sector, most of all. In 2006, 1.9% of the employees worked for in the primary sector, 48.2%-a in the secondary sector and 49.8%-a in the tertiary sector. The economic structure of Neunkirchen is determined by the presence of industry and professional work above the average, and construction industry, metal industry and plastic industry dominate within this. In the service sector, it is trade, health care and social benefits that are determining.

The district of Bruck/Leitha close to Vienna saw a 5% growth of the number of employees between 2001 and 2006 in all the three sectors (See Table 9). In the district, the service sector, and mainly trade is dominant. Within the secondary sector, construction industry and food industry predominate. In 2006, almost 6% of the employees worked in the primary sector, 34.7% in the secondary sector and 59.4% in the tertiary sector.

Study areas of Styria As to the whole territory of Styria, the number of employees was 422,471 in 2006. Between 2001 and 2006, their number grew by 1.4% (See Table 9). The growth of the number of employees is spectacular especially in the service sector. The economic structure of Styria is characterised by the presence above the average (30.6%) of industry and professional works.

In the areas of Styria relevant for the study, the number of employees was 35,754 in 2006. The respective territory of the province saw a 4.8% growth between 2001 and 2006 (exceeding the growth at province level) as regards the number of employees.

The economic structures of Feldbach, Fürstenfeld and Hartberg are predominated by the service sector, and within this by industry and professional works. In the district of Feldbach, the tertiary sector (59.9%), and especially trade, while in the secondary sector (36.5%) construction industry, food industry and leather processing industry dominate. The number of employees grew by 1.6% between 2001 and 2006 (mainly in the secondary sector). In the district of Fürstenfeld, it is trade and tourism within the tertiary sector (55.7%) (Loipersdorf, Blumenau medical baths), and mainly construction industry, machine industry and wood industry within secondary sector (42.3%) that play an important role. The number of employees grew by 8.5% in the district between 2001 and 2006. In the district of Hartberg, trade and tourism dominate the tertiary sector (59.1%), construction industry, furniture manufacturing, textile industry and food industry are dominant in the secondary sector (38.3%). The number of employees (primarily within the tertiary sector) grew by 6.2% in the district between 2001 and 2006 (comparative data of Arbeitsmarktservice Österreich and Wirtschaftsportal Niederösterreich from 2007). EMPIRICA, February 2008 24 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Western Transdanubia The number of employees fell in all the three studied counties between 2001 and 2006: in Gy ır-Moson-Sopron county by 1.8%, in Vas county by 4.2% and in Zala county by 0.2%. 3

In the studied year, 5.5% of employees in Gy ır-Moson-Sopron county worked in agriculture and forestry, 40.3% in industry and 54.2% in the service sector. In Vas county, we can find the following ratios for 2004: 5.2% in the primary, 45.1% in the secondary and 49.7% in the tertiary sector. In 2004, in Zala county, 4.1% of the employees worked in agriculture and forestry, 42.8% in industry and 53.1% in the service sector.

In the Western Transdanubia region, 4.9% of all the employees was employed in agriculture forestry, 39.7% in industry and 55.4% in the service sector in 2006. The ratio of those employed in the industry sector from all employees is above the average regarding the Hungarian average (the ratio of all the employees working in industry in Hungary is 32.4%). In the region, the number of employees fell between 2001 and 2006 in agriculture and forestry (-0.6%), and in industry (-2.1%), while we can see growth in the service sector. The dominant economic sector in Gy ır-Moson-Sopron county is industry followed by the service sector and agriculture and construction industry. In processing industry, a growth of 10.7% was achieved by 2006 exceeding the national average (the growth of processing industry in Hungary is 7.7%). Within the sector, metal industry (39.5%), plastic industry (19.1%) and chemical industry (13.4%) grew the most spectacularly and thus all these three values are above the national average. Wood and paper processing industry (2.3%) and food and consumer goods (7.8%) also showed a growth above the national average. In 2006, the number of employees in processing industry fell (-0.9%) in Vas county. In a national comparison, it is metal industry (30.4%), textile industry (13.6%), chemical industry (7.4%) and wood and paper processing industry (5.3%) that achieved a growth above the average 4.

The next Table 10 shows the employment rate of the study area 5 according to the calculation method of EUROSTAT.

Table 10: Employment rate (15-64 years), % 1999 2000 2001 2002 2003 2004 2005 2006 Styria 66.6 66.5 66.8 67.5 68 67.2 68.9 69.9 Burgenland 68.6 68.2 66.7 67.5 69.6 67.1 68.1 69.5 Lower Austria 69.4 69.2 68.6 69.9 69.8 69.5 69.9 71.5 Austria 68.6 68.5 68.5 68.7 68.9 67.8 68.6 70.2 Western Transdanubia 63.0 63.4 63.1 63.7 61.9 61.4 62.1 62.8 Hungary 55.6 56.3 56.2 56.2 57 56.8 56.9 57.3 Source: EUROSTAT 2007

3 In the Hungarian part of the study area, data on the number of employees are available at NUTS3 level broken down by economic sectors until 2004 via the Central Statistical Office. 4 Centrope Business and Labour Report 2007 and http://www.gymskik.hu/index.php?id=961 5 According to EUROSTAT calculations, the employment rate is calculated as follows: the number of the population of working age (15 to 64 years) is divided by the number of persons belonging to the same age group in the total population. The indicator serves as the basis of the European labour survey. It covers the number of the population living in private households, while it excludes collective households like colleges or hospitals. Those are to be considered employees who work at least one hour per week for salary or are at a temporary leave (illness, ordinary leave (EUROSTAT 2007).

EMPIRICA, February 2008 25 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Both the whole territory of Austria and the studied provinces, the employment rate evidently grew between 1999 and 2006. Although Burgenland province achieved a 0.9% growth, Styria (+3.3%) and Lower Austria (+2.1%) achieved a growth above the national average. Besides, the employment rate of Lower Austria achieved the highest value with its 71.5% from among the eastern provinces of Austria in 2006. In the Western Transdanubia region, the employment rate has hardly changed at all since 1999, and was 62.8% in 2006. With this, this value is the first among Hungarian regions as regards the population of working age (15 to 64 years), even exceeding the value of the region the centre of which is Budapest (62.7%).

EMPIRICA, February 2008 26 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

3.4 Income

In Hungary, the monthly net salary of an average employee in processing industry corresponded to EUR 398.3, after paying contributions and taxes in 2006. However, the monthly net salary of an Austrian employee on the average is five times that of the Hungarian one, that is, a monthly EUR 2,011.5 (see Table 11).

Average net salaries in Austria between 2000 and 2006 are well above the average of the EU-27 and in Hungary well below that. In the examined period, net average salaries grew by 78.2% in Hungary and by 17.6% in Austria. In comparison with the neighbouring and , average net salaries in Hungary were higher than in Slovakia and lower than in Slovenia.

Table 11: Monthly net salaries (in EUR) – Processing industry (single individual without a child, 100% of the AW* salary) Change 00-06 2000 2001 2002 2003 2004 2005 2006 (%) Hungary 223.5 252.2 310.4 342.8 368.4 401.0 398.3 78.2 Austria 1,710.6 1,731.1 1,765.0 1,829.7 1,917.2 1,971.0 2,011.5 17.6 Slovenia 520.4 547.5 580.0 602.8 629.6 667.5 - - Slovakia 233.3 245.1 267.2 288.4 325.2 364.4 402.3 72.4 EU27 1,357.4 1,410.9 1,453.7 1,483.1 1,509.3 1,562.7 - - Source: EUROSTAT 2007 *AW: Average Worker (average employee)

Available income is an income which covers the consumption expenses and savings and thus is an important indicator of the “welfare” of the population. Data regarding available incomes are available in the database of EUROSTAT at NUTS2 level.

Table 12: Available income per capita of households as regards purchasing power parity (GDP- PPP) Change 00-04 1999 2000 2001 2002 2003 2004 (%) Hungary - 6,062.2 6,590.5 7,172.0 7,400.3 7,812.0 28.9 Middle Hungary - 8,107.9 8,535.8 9,624.0 10,333.0 10,950.8 35.1 Western Transdanubia - 6.548,4 6.962,1 7.592,0 7.519,5 7.951,7 21.4 Austria 14,635.9 15,935.0 15,702.0 16,071.1 16,630.6 17,206.5 8.0 Burgenland 13,446.1 14,548.9 14,589.6 15,011.8 15,745.2 16,775.3 15.3 Lower Austria 14,895.5 16,119.6 16,004.1 16,326.7 16,999.6 17,572.0 9.0 Styria 13,661.5 14,875.8 14,710.8 15,093.1 15,676.3 16,201.6 8.9 Slovenia - 8,885.3 9,313.9 9,848.7 9,789.6 10,302.1 15.9 Slovakia 5,190.2 5,411.2 5,945.3 6,338.4 6,160.7 6,467.0 19.5 Source: EUROSTAT 2007

In Hungary, the available income per capita of private households as regards purchasing power parity 6 grew by 28.9% between 2000 and 2004. Available income per capita in Hungary showed a PPP value of 7,812 regarding purchasing power. The available income per capita of households was 7,951.7 in the Western Transdanubia region in 2004, while in Middle Hungary 10,950.8. Both values are above the national average.

6 Purchasing power parity, or PPP) is a method of economy for the calculation of al alternative exchange rate between two currencies. Purchasing power parity shows how many goods and services can be purchased in a currency compared to another one, thus measuring different prices in different countries.

EMPIRICA, February 2008 27 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

In Western Transdanubia, between 2000 and 2004, the level of available income grew by 21.4%. In Middle Hungary, in the same period, available income grew by 35.1%, that is, above the national average.

In Austria, the available income per capita of private households grew by 8% between 2000 and 2004 and was more than twice the Hungarian value. In Burgenland (15.3%), Lower Austria (9%) and Styria (8.9%) provinces, in the same period, we encountered a growth exceeding the national average. In national comparison, Lower Austria could achieve a growth well above the national average between 2000 and 2004 as regards available income.

For comparison, the neighbouring Slovenia and Slovakia had a growth of 15.9% and 19.5% regarding available income which, with the value of 10,302.1 of Slovenia is well above the Hungarian one and with the value of 6,467 in Slovakia is slightly below the Hungarian level.

In Hungary, monthly costs of employment 7 in the processing industry grew by 69.9% between 2000 and 2006 and hourly costs showed a growth of 66.3%. Costs of employment in 2006 were a monthly EUR 890.3 EUR and an hourly EUR 5.97.

Table 13: Costs of employment in processing industry (in EUR)

Monthly costs of employment – processing industry (in EUR) Change 00-06 2000 2001 2002 2003 2004 2005 2006 (%) Hungary 524.1 587.6 696.4 720.7 799.9 908.4 890.3 69.9 Austria 3,479.0 3,609.0 3,712.0 3,759.0 3,810.0 3,924.0 3,975.0 14.3 Slovenia 1,165.5 1,207.3 1,304.8 1,352.6 1,376.5 1,454.9 1,513.8 29.9 Slovakia 425.8 442.7 485.3 532.6 618.0 662.7 729.4 71.3 EU27 2,646.8 2,699.2 2,795.3 2,847.7 2,961.2 3,088.7 2,891.8 9.3 Hourly costs of employment – processing industry (in EUR) Change 00-06 2000 2001 2002 2003 2004 2005 2006 (%) Hungary 3.59 3.95 4.72 4.88 5.32 5.97 5.97 66.3 Austria 23.85 24.75 25.7 26.37 26.79 27.69 27.69 16.1 Slovenia 8.19 8.7 8.9 9.58 9.51 9.84 9.84 20.1 Slovakia 3.05 3.14 3.46 3.88 4.34 4.61 4.61 51.1 EU27 18.76 19.23 19.95 20.31 20.95 21.62 21.62 15.2

Source: EUROSTAT 2007

In Austria, monthly costs of employment in the same period grew by 14.3% while hourly costs did by 16.1%. Employment costs in 2006 were a monthly EUR 3,975, and an hourly 27.69. Compared to Hungary, employment costs of Austria were 4.5 times higher in 2006 which is well above the EU average. (EU27: 2,891.8 per month and 21.62 per hour).

For comparison, the monthly employment costs of the neighbouring Slovenia and Slovakia in the studied period in processing industry grew by 29.9% and 71.3%, respectively, while hourly costs by 20.1% and 51.1%, respectively. The relevant indicators of Hungary between 2000 and 2006 were between the Slovenian and the Slovakian values (See Table 13).

7 Costs of employment consist of direct wage costs and contributions after the salaries, e.g., social security contribution. EMPIRICA, February 2008 28 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

3.5 Unemployment

According to the registered data of Austrian and Hungarian labour centres, in 2006 the number of the registered unemployed was 56,566 in the study area, and the number of the unemployed was roughly the same in the Austrian and Hungarian target area (approx. 29,230).

Figure 1 provides an overview on the number of the registered unemployed in the studied regions and partial regions.

Figure 1: The number of the registered unemployed, average in 2001-2006

16.000

14.000

12.000

10.000

8.000

6.000

4.000 2001 2002 2003 2004 2005 2006

Burgenland Lower Austria Styria Gy-M-S Vas Zala

Source: Austrian and Hungarian labour centres 2007

While the number of the registered unemployed was relatively the same between 2001 and 2006 in the study areas of Burgenland and Styria, it had significant changes in relevant parts of Lower Austria and the Western Transdanubia counties. The number of the unemployed grew by 25% between 2001 and 2005 in Lower Austria (33,387). Since 2006, however, it has shown a decreasing tendency due to the economic growth and the increasing number of vacant jobs.

In studied Hungarian counties, between 2001 and 2005, a significant growth was to be perceived. The number of the unemployed grew to more than 30% of the original figures in Zala county (+3,706). In Vas county, the number of the unemployed grew by approx. 20% between 2001 and 2005 (+1,218), and in Gy ır-Moson-Sopron county by 15% (+1,209). Between 2005 and 2006, in the studied Hungarian counties, the number of the unemployed changed only to a slight extent.

EMPIRICA, February 2008 29 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

The following Map 7 provides an overview on the territorial division of the unemployed according to the unemployment rate (actual national calculation methods) according to the average of 2006.

Map 7: The yearly average in 2006 of the unemployment rate

Source: Austrian and Hungarian labour centres 2007

The average unemployment rate of Burgenland province in 2006 is 8.5%, being the highest in whole Austria after Vienna (9.3%). The study areas of Lower Austria and Styria, with their 6.9% and 6.8% unemployment rates, respectively, are at the level of the Austrian average (6.8%). As to the values of labour districts, clear regional disparities appear. While the northern districts of Burgenland, like Eisenstadt (5.6%) and Neusiedl (5.7%) and Mödling in Lower Austria have relatively low unemployment rates, Fürstenfeld (7.4%), Wiener Neustadt (7.5%) and Oberwart (9.7%) districts obviously struggle with the fact that Southern Burgenland is among the economically weakest regions of Austria.

In Western Transdanubia, the regional disparity regarding the unemployment rate is significantly higher, well illustrated by the difference of 10.7% between the two labour

EMPIRICA, February 2008 30 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary districts showing the lowest and the highest values, respectively (Sopron-Fert ıd 3.3% and Letenye 14.0%). While the unemployment rate in Gy ır-Moson-Sopron county in 2006 was an average of 4.6%, Vas (6.1%) and Zala (9.0%) counties had a higher average value. In the latter counties, it was mainly Vasvár (10.9%), Zalaszentgrót (10.8%), Szentgotthárd (10.6%) and Letenye (14%) regions that had extremely high unemployment rates.

EMPIRICA, February 2008 31 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

The next Figure 2 provides an overview on the seasonal changes of unemployment in 2005/2006.

Figure 2: The seasonal changes of unemployment in 2005/2006 25.000

20.000

15.000

10.000

5.000

0 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 Burgenland Lower Austria Styria

12.000

10.000

8.000

6.000

4.000 1 2 3 4 5 6 7 8 91011121 2 3 4 5 6 7 8 9101112 Gyõr-Moson-Sopron Vas Zala

Sou rce: Austrian and Hungarian labour centres 2007

Seasonal aspects of show relatively similar values for all the three Austrian target areas. The change between winter an summer months is still of a major importance as a consequence of the large volume of summer tourism season and the well-known seasonality of construction industry in Styrian areas and in Burgenland. In the relevant areas of Styria, the absolute number of the registered unemployed grew by 145% between July 2005 and January 2006 (+5,004), and in Burgenland by 108% (+7.047). As to the study areas of Lower Austria, the relative seasonal growth of unemployment was only 40% between winter and summer months in the same period (+5,719).

According to existing data, the seasonality of unemployment is less significant in Western Transdanubia than in Austria since in this region the major part of employees is rather employed in industry (see 3.3 Employment and economic structure), and especially in the processing industry. Therefore the seasonally sensitive unemployment values of tourism and construction industry cannot influence the received values to such a great extent. The level of seasonal changes between winter and summer months was 15-25% in 2005%2006. EMPIRICA, February 2008 32 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

The next Table 14 presents major structural indicators of unemployment in the study area.

Table 14: Structural unemployment 2006 8 50+ Unemployed Women 15-24 Foreigners 2006 /45+ for > 1 year Eisenstadt 1,244 43.0 17.1 23.8 3.5 11.4 Mattersburg 1,062 43.8 16.2 22.0 3.7 12.4 Neusiedl 1,217 44.1 15.9 23.8 2.9 9.3 Oberpullendorf 1,066 45.4 14.1 20.7 5.0 9.1 Oberwart 2,144 44.5 15.3 21.7 7.2 6.9 Stegersbach 747 42.8 15.9 23.7 1.5 5.6 Jennersdorf 516 42.6 18.2 17.8 0.4 5.2 Burgenland 7,997 44.0 15.9 22.2 4.2 8.8 Baden 3,316 43.0 13.8 25.5 6.4 20.7 Berndorf 699 42.6 15.2 24.5 5.7 21.6 Bruck/Leitha 985 41.1 16.6 25.3 8.3 17.6 Mödling 2,511 45.6 11.5 24.4 7.6 13.7 Neunkirchen 2,269 39.0 17.5 22.7 5.2 14.1 Schwechat 1,388 42.4 15.1 23.1 4.6 18.8 Wiener Neustadt 3,614 43.4 15.6 22.8 9.2 16.0 Lower Austrian areas 14,782 42.7 14.8 23.9 7.0 17.0 Feldbach 1,835 38.9 19.1 13.7 2.1 5.0 Fürstenfeld 707 41.4 18.0 16.5 5.7 6.5 Hartberg 1,955 42.3 18.4 16.8 5.2 4.8 Styrian areas 4,497 40.8 18.6 15.5 4.0 5.2 Austria 27,276 42.8 18.8 24.6 5.7 12.6 Gy ır-Moson-Sopron 9.131 54,0 16,8 22,4 12,5 n.a. Vas 7.492 48,1 17,9 22,6 19,8 n.a. Zala 12.667 48,5 16,2 24,6 23,1 n.a. Western 29.290 50,2 17,0 23,2 18,5 n.a. Transdanubia Source: Austrian and Hungarian labour centres 2007

The proportion of the registered unemployed women in Austria was between 38.9% (Feldbach labour district) and 45.6% (Mödling labour district) in 2006. The district of Mödling shows a spectacularly low level of unemployment among the young (15-24 years) (11,5%), while Styrian districts had significantly higher values (18-19%). As to the unemployment of those above 50, Styrian districts show major differences for the other parts of the study area. While in 2006, the unemployment of those above 50 amounted to 15.5% of the total unemployment, the same value was much higher on the national level (18.8%), Lower Austrian areas (23.9%) and in Burgenland province (22.2%). The number of the permanently unemployed (for a longer time than 1 year) in 2006 was 4.0% in Styrian areas, 4.2% in Burgenland, and 7.0% in the areas of Lower Austria so all the three values were around the Austrian national average (3.5%). The unemployment of foreigners may show a rate of 22% in certain districts of Lower Austria which is worth mentioning beyond doubt. In this part of the study area, the rate of foreign population is the higher (see 3.1 Population). In the whole territory of Austria in 2006, an average of 5,316 foreign unemployed persons were registered. From which, 1,981 persons (37%) came from successor countries of , 1,262 (24%) from Turkey and 172 (3%) from Hungary.

8 Statistical data on the structural composition of the unemployed differ in several aspects in the two countries. For comparison, we made efforts to approximate the values, however, differences can occur. In Hungary, there are no data on the number of the foreign unemployed. EMPIRICA, February 2008 33 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

In Burgenland province, in the same year, an average of 702 foreign citizens were registered as unemployed from which most were (145 persons).

Comparing values presenting the high unemployment structure of Hungarian regions, we find relatively the same values between Hungarian counties. The ratio of 54% of registered unemployed women in Gy ır-Moson-Sopron is relatively high as compared to other counties (around 48% körüli), and all the three counties have high values as compared to the average of Austrian territories. The unemployment data of young career-starters (between 15-24; Hungarian values are contracted data) show no major differences by county (16 to 17%), and these values roughly correspond to the average of Austrian territories, too. The proportion of the unemployed above 50 is roughly the same in Gy ır-Moson-Sopron and Vas counties (22.4 and 22.6%), while it is 2% higher in Zala, however, this difference is irrelevant. In comparison with the studied Austrian territories, we can state that this value largely corresponds to the average of Burgenland, Lower Austria and the national average of Austria, too, however, it is well below the extremely low value of Styrian territories. However, the difference is strong in the proportion of the permanently unemployed, both in comparison with the values of Hungarian counties and Austrian territories. Even the 12.5% of Gy ır-Moson-Sopron county which performs the best is almost twice the 7% in Lower Austria which performs the worst and the average in Hungarian counties is three or five times the Styrian and Burgenland values. 23.1% in Zala is extremely high and is is twice as much as the average of Gyır-Moson-Sopron. The number of the foreign employees entered into the registry of the Employment and Social Affairs Office grew constantly after the second half of the 1990. In 1996, a total of 20,296 employment permits were issued and in 2005 more than 53 thousand. In 2006, Labour Centres issued 52,505 general and 2,216 agricultural seasonal employment permits, registered 16,132 persons and issued 275 green card certificates. With a view to all the four entitlements, a total of 64,626 foreign employees had valid employment permits or certificates on 31 December 2006. Within the whole population, the proportion of employees with Romanian citizenship was 42.6%, of Slovaks 25.8% while of Ukrainians 12.8%. The number of permits and green card certificates issued for Austrian citizens was 304 in 2004, 279 in 2005, 371 in 2006, and only 182 in the first three quarters of 2007, so their numbers are insignificant. Almost 60% of the employees got employment in the central region (40,020 persons), 22.6% (15,141 persons) in the Middle Transdanubian region, 5.4% (3,607 persons) in the Western Transdanubian region, and 5.1% (3,399 persons) in the southern Great Plains region. However, after 2005 and 2006, due to the data registering system modified after the accession, the year 2007 saw a continued slow decrease in the number of the foreign employees (reduction of 25.2%) 9.

9 According to the registers of the Employment and Social Affairs Office.

EMPIRICA, February 2008 34 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

3.6 The number of registered vacant jobs

Table 15 provides an overview on the number of registered vacant jobs in the study areas between 2002 and 2006.

However, the data of labour centres on the number of registered vacant jobs do not correspond to the total number of vacant jobs. The reason is that in Austria it is not compulsory to register vacant jobs with local labour centres, but still, a lot of employers avail themselves of this opportunity, as the figures show it, and naturally, these figures cannot be considered to be absolute. In Hungary, however, this is a statutory obligation of employers and, still, most of them do not comply with this. According to preliminary estimations, it is only 25 to 30% of Hungarian employers which comply with these statutory obligations and no sanctions are imposed against non-compliers. Thus the data of labour centres are rather informative and the number of registered vacant jobs is to be used as a labour market specific indicator to a quite limited extent only.

According to data of Table 15, the number of registered vacant jobs grew significantly in the study areas of Lower Austria between 2002 and 2006. Burgenland province also saw in the studied period. Only the Styrian study areas had a decreasing trend in the number of vacant jobs.

Table 15: The annual average of the number of monthly registered jobs Change 2002 2003 2004 2005 2006 02/06 Eisenstadt 127 111 110 172 160 26.0 Mattersburg 93 96 106 112 102 9.7 Neusiedl 120 140 136 106 140 16.7 Oberpullendorf 121 92 96 94 109 -9.9 Oberwart 67 90 93 100 263 292.5 Stegersbach 63 58 70 80 92 46.0 Jennersdorf 76 55 68 61 58 -23.7 Burgenland 667 642 679 725 924 38.5 Baden 417 376 391 530 500 19.9 Berndorf 43 47 56 70 94 118.6 Bruck/Leitha 108 122 116 76 100 -7.4 Mödling 266 207 266 376 449 68.8 Neunkrichen 205 189 189 224 308 50.2 Schwechat 296 202 269 311 226 -23.6 Wiener Neustadt 251 369 683 510 589 134.7 Lower Austrian areas 1,586 1,512 1,970 2,097 2,266 42.9 Feldbach 230 197 172 138 158 -31.3 Fürstenfeld 88 107 125 111 82 -6.8 Hartberg 99 108 95 77 104 5.1 Styrian areas 417 412 392 326 344 -17.5 Austrian areas 2,670 2,566 3,041 3,148 3,534 32.4 Gyõr-Moson-Sopron 1,327 1,398 1,758 1,598 1,971 48,5 Vas 646 966 1,033 1,171 1,080 67,1 Zala 1,212 1,774 1,558 1.,047 1,436 18,0 Western Transdanubia 3,185 4,138 4,349 3,816 4,487 40,0 Source: Austrian and Hungarian labour centres 2007

EMPIRICA, February 2008 35 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Figure 3: Trends of vacant jobs registered monthly between June 2006 and July 2007

3.000 2.500 2.000 1.500 1.000 500 0 Jun. Aug. Oct. Dec. Feb. Apr. Jun. Aug. Oct. 06 06 06 06 07 07 07 07 07 Burgenland Lower Austria Styria

Source: Austrian and Hungarian labour centres 2007

Figure 4: The annual average between 2002 and 2006 of monthly registered jobs

2500

2000

1500

1000

500

0 2002 2003 2004 2005 2006

Burgenland Lower Austria Styria

Source: Austrian and Hungarian labour centres 2007

Burgenland In Burgenland province, the number of vacant jobs grew by 38.5% between 2002 and 2006 (See Table 14). By economic sector, in 2006, 17.7% of vacant jobs were related to hotel industry and catering, 17.3% to public administration, 14.6% to enterprise-related services, 14.1% to construction industry and 10.4% to the production sector.

EMPIRICA, February 2008 36 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

From among the total number of vacant jobs, 48.6% required mandatory primary education; 41.2% required a skilled worker’s qualification, 4.7% a secondary 10 and 5.2% a tertiary qualification 11 . Table XY shows that the winter period means that the number of vacant jobs is reduced and, evidently, the unemployment rate increases.

Lower Austrian study areas In Lower Austrian study areas, between 2002 and 2006, the number of registered vacant jobs grew by 42.9%. By economic sector, 32.3% of vacant jobs were related to enterprise- related services, 12.7% to trade, 12.2% to production sectors, 10.2% to hotel industry and catering, and 9.2% to construction industry in 2006, in Lower Austria province. By school education, vacant jobs show the following proportions in 2006: 41.% required mandatory primary education, 46.5% a skilled worker’s qualification, 3.3% a secondary, and 7.7% a tertiary qualification. For the study areas of Lower Austria, we can also say that the number of vacant jobs is lower in winter months, which evidently suggests a strong presence of seasonal jobs.

Styrian study areas In Styria study areas 2002 and 2006, the number of registered vacant jobs fell by 17.5%. From among vacant jobs, the major part was related to enterprise-related services in 35.8%, then to hotel industry and catering with 13.9%, production sectors with 13.0%, trade with 9.5%, and construction industry with 9.4% in 2006. In the Styrian province, in 2006, almost half of registered vacant jobs (48.4%) required a skilled worker’s qualification, 38.3% mandatory primary education, 9.0%-a a tertiary and 3.4% a secondary qualification. As shown by Table 14, seasonality in winter months is very significant in Styria as well (Source: AMS Österreich 2007).

Western Transdanubian study areas According to data of Hungarian counties, the number of registered vacant jobs grew by 40% in the Western Transdanubia region between 2002 and 2006. This value results mainly from the high data of Vas county (67.1%) and Gy ır-Moson-Sopron county (48.5%), and in Zala, the 18% expansion is under the average.

We can also state that annual figures are below the desired value as compared to the registration obligation in Hungary and perhaps a stricter accountability and labour market incentives would help to increase the number of registered jobs.

10 Secondary schools: skilled worker’s school, secondary trade school, other secondary schools 11 Schools providing tertiary qualification can be the following: general tertiary school, tertiary technical college, tertiary trade school, other tertiary school, academies, college, B. A. EMPIRICA, February 2008 37 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

3.7 Economic performance

Table 16 provides an overview on the regional trends of the gross domestic product 12 (current price, million EUR) between 2000 and 2004.

The gross domestic product grew by 12.9% in the Austrian part of the study area, and by 45.6% in the Hungarian part between 2000 and 2004. It is worth mentioning that in Zala county, gross domestic product grew well above the average (69.2%) as compared to the average of the whole Western Transdanubia region.

In Austria, Burgenland, and especially Northern Burgenland with the Eisenstadt centre and Southern Lower Austria were the strongest in achieving average growth. The total study area, including Hungarian and Austrian parts had a GDP of 34.4 billion EUR in 2004. For comparison, this value corresponds to the total GDP of Slovakia in 2004, being approx. 34 billion EUR.

Table 16: Gross domestic product (GDP), current price, million EUR 2000 2001 2002 2003 2004 Change 00-04, % Middle Burgenland 574 600 658 677 660 15.0 Northern Burgenland 2,718 2,839 2,988 3,108 3,309 21.7 Southern Burgenland 1,453 1,512 1,532 1,571 1,616 11.2 Burgenland 4,746 4,952 5,179 5,357 5,585 17.7 Southern Lower Austria 4,832 4,917 5,118 5,352 5,526 14.4 Vienna neighbourhood, southern areas 8,935 8,558 9,169 9,349 9,782 9.5 Eastern Styria* 4,453 4,614 4,704 4,778 5,026 12.9 Austrian areas 22,966 23,041 24,170 24,836 25,919 12.9 Gyõr-Moson-Sopron 2,975 3,098 3,608 3,910 4,141 39.2 Vas 1,578 1,598 1,849 2,088 2,182 38.3 Zala 1,297 1,515 1,805 2,042 2,193 69.1 Hungarian areas 5,851 6,211 7,262 8,041 8,517 45.6 Total 28,817 29,252 31,432 32,877 34,436 19.5 Source: EUROSTAT 2007

12 GDP is an indicator of the economic situation of a country. It is the total value of goods produced during the given period at the given area, including products and services. International GDP comparison does not pay attention to price differences in different countries and thus values per capita can be determined and the absolute purchasing power parity of national economies can be expressed (EUROSTAT 2007). EMPIRICA, February 2008 38 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

The next Figure 5 shows a territorial division of the GDP in the studied region in 2004.

Figure 5: Regional division of gross domestic product (current price, million EUR), %

Zala Vas 6% 6% Burgenland 16% Gyõr- Moson- Sopron 12% Southern Lower Austria Eastern Styria 16%

15% Vienna neighbourhood / southern areas

29%

Total GDP 2004: 34.4 billion EUR

Source: own figure, EUROSTAT 2007

Although in the study, the parts in Austria and Hungary of the study area are very similar as to the sizes of their areas, the population numbers and the number of the employees, 76% of the gross domestic product of the whole territory came from Austria and only 24% came from the 3 counties of the Western Transdanubia region of Hungary. Thus the high economic advantage of Austrian parts is evident. In the Austrian part of the study area, the GDP was the highest in the district of “Vienna neighbourhood / southern areas”, with 29%, and in the Hungarian part it was Gy ır-Moson- Sopron county to be leading with 12%.

EMPIRICA, February 2008 39 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Table 17 compares the gross domestic product (at per capita purchasing power parity, %) with the average of the 27 EU Member States.

Table 17: Per capita GDP-PPP value 13 , in the proportion of EU27 average, % (EU-27=100) 2001 2002 2003 2004 Austria 128 126 129 129 Burgenland 85 86 90 90 Middle Burgenland 76 80 83 79 Northern Burgenland 96 97 102 104 Southern Burgenland 74 72 75 74 Lower Austria 103 102 104 104 Southern Lower Austria 95 95 100 99 Vienna neighbourhood, southern areas 139 143 146 145 Styria 110 105 110 111 Eastern Styria 82 81 82 84 Gyõr-Moson-Sopron 73 74 77 74 Vas 61 61 67 65 Zala 52 54 59 58 Hungary 60 62 63 64 Source: EUROSTAT 2007

The gross domestic product of Austria between 2001 and 2004 was clearly above the EU average. In 2004, the Austrian GDP was 129% of the average of the EU 27. Between 2001 and 2004, Lower Austria and Styria also had high GDPs as compared to the EU average. Compared to this, the southern part of Lower Austria in 2004 achieved 99% of the EU average, Eastern Styria 84%, and the Vienna neighbourhood 145%, well above that value. The GDP of Burgenland in the whole studied period was lower than the average of the EU, however, Northern Burgenland in 2003 and in 2004 achieved 102% and 104%, respectively, of the EU average. In the same period, GDP of Hungary was well below the European average, in 2004 achieving only 64% of the EU average. Between 2001 and 2004, the gross domestic products of all the three counties were especially low. Besides, Gy ır-Moson-Sopron county in 2004 had 74% which was the same per capita economic indicator as in Southern Burgenland.

The next Table 18 shows the proportions of the three economic sectors as regards gross added value 14 in the study area.

13 P urchasing power parity indicates how many goods and services can be purchased in a currency compared to another one, thus paying attention to different prices in different countries. Purchasing power parity is possible between two geographical units when the same product basket (products and services) are available at the same price. When two geographical units with different currencies are compared, prices can be compared with the help of exchange rates. 14 Gross added value: the difference between output of sectors (production value) and the value of goods and services used during the production (current production use). When calculating the gross added value, output is evaluated at basic price and the current production usage at market purchase price. (Source: Central Statistical Office and EUROSTAT 2007). EMPIRICA, February 2008 40 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Table 18: Division of gross added value (GAV) (prices in million EUR) in a economic sectors, % 2000 2001 2002 2003 2004 Primary sector A,B agriculture, forestry, fishery Austria 2.1 2.1 2.0 1.9 1.9 Burgenland 5.4 5.7 5.3 5.7 5.8 Middle Burgenland 6.4 6.3 5.6 5.6 5.9 Northern Burgenland 5.7 6.3 5.7 6.4 6.6 Southern Burgenland 4.5 4.3 4.3 4.3 4.1 Lower Austria 4.1 4.3 4.0 3.8 3.8 Southern Lower Austria 3.1 3.2 3.0 2.7 2.8 Vienna neighbourhoods, southern areas 1.1 1.2 1.1 1.0 1.0 Styria 3.2 3.2 3.2 3.1 2.8 Eastern Styria 6.2 6.3 6.1 5.9 5.4 Hungary 4.3 4.3 3.7 3.3 3.9 Western Transdanubia 4.6 4.3 4.2 3.8 4.8 Gyõr-Moson-Sopron 4.0 4.0 3.7 3.6 4.4 Vas 4.2 3.9 4.5 3.5 4.8 Zala 6.4 5.2 4.8 4.4 5.4 Secondary sector C-F Industry Austria 30.9 30.3 30.1 30.0 29.7 Burgenland 30.7 30.3 31.4 31.4 30.4 Middle Burgenland 39.2 39.4 41.1 42.7 40.2 Northern Burgenland 26.9 26.9 28.6 27.6 27.1 Southern Burgenland 34.3 32.9 32.7 33.9 33.3 Lower Austria 36.4 35.5 35.5 35.7 35.7 Southern Lower Austria 40.4 40.9 42.4 43.0 42.4 Vienna neighbourhood, southern areas 37.1 33.7 32.2 32.1 31.9 Styria 36.4 36.8 35.8 35.7 35.5 Eastern Styria 38.2 38.2 37.1 37.1 36.6 Hungary 33.2 31.3 30.3 30.5 30.9 Western Transdanubia 49.1 43.4 42.5 44.4 42.9 Gyõr-Moson-Sopron 53.0 46.3 45.9 45.7 45.5 Vas 50.8 44.3 42.2 46.1 44.0 Zala 38.0 36.3 36.0 40.0 36.8 Tertiary sector G-P Services Austria 67.0 67.6 67.9 68.0 68.4 Burgenland 63.9 64.0 63.3 62.9 63.8 Middle Burgenland 54.2 54.4 53.1 51.7 54.1 Northern Burgenland 67.4 66.7 65.7 65.9 66.3 Southern Burgenland 61.1 62.7 63.0 61.8 62.7 Lower Austria 59.5 60.2 60.4 60.5 60.6 Southern Lower Austria 56.5 55.9 54.6 54.3 54.8 Vienna neighbourhood, southern areas 61.8 65.1 66.7 66.9 67.1 Styria 60.4 60.0 61.0 61.3 61.6 Eastern Styria 55.6 55.5 56.8 56.9 58.0 Hungary 62.6 64.4 66.0 66.2 65.2 Western Transdanubia 46.3 52.4 53.3 51.9 52.3 Gyõr-Moson-Sopron 42.9 49.7 50.4 50.7 50.1 Vas 44.9 51.8 53.3 50.3 51.2 Zala 55.7 58.4 59.1 55.6 57.7 Source: EUROSTAT 2007

Primary sector Agriculture, forestry and fishery in Hungary and in Austria (in national average) contributed to the production of gross added value (GAV) to a very low extent between 2000 and 2004 (between 1.9 and 2.1%), and both countries show a decreasing trend in the studied period. Compared to this, Burgenland, Lower Austria and Styria provinces were characterised by the presence of the primary sector above the average in national comparison. Northern Burgenland had the highest proportion with 6,6%. The primary sector contributed to the EMPIRICA, February 2008 41 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary growth of the gross added value in all the three counties in Western Hungary above the national average, too, the highest value produced by Zala county with 5.4%.

Secondary sector 29.7% of the Austrian GAV was produced by the secondary sector in 2004. In the same year, Burgenland (30.4%), Lower Austria (35.7%) and Styria (35.5%) provinces had industries performing above the average while the total national performance of industry between 2000 and 2004 slightly decreased. The highest proportion was achieved by Middle Burgenland (40.2%) and Southern Lower Austria (42.4%). in 2004, in Hungary, industry contributed with 30.9% to GAV. The secondary sector performed better than the national average between 2000 and 2004 in all the three studied counties. Highest values were achieved by Gy ır-Moson-Sopron county with 45.5%. The proportion of industry fell slightly in the studied period in all the three counties.

Tertiary sector The service sector contributed to the growth of the gross added value very significantly both in Austria and in Hungary. This value in Austria in 2004 was a total of 68.4%, and in Hungary 65.2%. Between 2000 and 2004, Austria had a growth of 1.4%, and Hungary a 2.6% growth as regards the service sector. The presence of the tertiary sector in Burgenland province between 2000 and 2004 showed a very slight decrease (-0.1%) while in Lower Austria and Styria a slight growth appeared with 1.1 and 1.2%, respectively. The tertiary sector achieved its highest values in Northern Burgenland due to the dominance of tourism with 66.3% and in the Vienna neighbourhood with 67.1% while Middle Burgenland dominated by industry (54.1%) and Southern Lower Austria (54.8%) showed the worst indicators

In Hungary, the permanent development of the service sector resulted in that between 2000 and 2004 all the three studied counties saw the growth of the presence of the tertiary sector (+6 percentages), primarily due to the development of tourism, enterprise-related services, health care services, higher education training systems. In Zala county, the service sector achieved its highest value in 2004 with 57.7% from among the three studied counties.

EMPIRICA, February 2008 42 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

3.8 Bilateral contacts between Hungary and Austria in external trade

The next Table 19 illustrates the trade balance of Austria and Hungary between 2004 and 2006.

Table 19: The external trade balance of Austria and Hungary between 2004 and 2006 2004 2005 2006

Import Export Balance Import Export Balance Import Export Balance Hungary 2,602.9 3,338.1 735.2 2,463.9 3,222.8 758.9 2,587.4 3,508.0 920.6 Source: Statistik Austria 2007

The balance of the external trade between Austria and Hungary was positive for positive Austria, Austria had a surplus of 920 million EUR in 2006 which is a growth of 25% (185 million EUR) since the accession of Hungary in 2004 to the EU.

Table 20 provides an overview on the 15 major trading partners of Austria in 2006.

Table 20: 15 major trading partners of Austria 2006 Million EUR Export Import Trading balance 1 Germany 31,475 43,264 -11,789 2 Italy 9,235 7,183 2,052 3 United States 6,118 3,462 2,656 4 Switzerland 4,394 3,495 899 5 France 3,941 3,598 344 6 United Kingdom 3,922 2,049 1,874 7 Hungary 3,508 2,587 921 8 Czech Republic 3,384 3,354 30 9 Spain 2,896 1,549 1,348 10 Poland 2,393 1,617 776 11 Russia 2,254 2,399 -144 12 Slovenia 1,873 1,020 854 13 The Netherlands 1,862 3,049 -1,187 14 Romania 1,804 752 1,052 15 Slovakia 1,768 1,788 -21 Source: Statistik Austria 2007

Hungary is the 7 th most important trading partner of Austria with an export of 3.5 million EUR annually. Preceding the Czech Republic (3.4 billion EUR) and Poland (2.4 billion EUR), Hungary is the most important Eastern European partner of Austria. The export of goods to Hungary in 2006 was 5% of the total Austrian export into EU25 countries, and 26% for the 10 Eastern and Middle European countries acceding in 2004. According to 2006 data of the Statistik Austria, the major exported goods from Austria into Eastern and Middle European countries are electric machines and equipment, transport equipment, iron and steel, machines and metal industry products. Imported goods from these countries were electric machines and equipment, oil and oil derivatives, transport equipment, and metal industry products.

Bilateral economic contacts between Hungary and Austria

5.5% of the external trade of Hungary is realised with Austria.

EMPIRICA, February 2008 43 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

In Hungarian export, the export of machines and machine equipments was stabilised in 2006 following the reduction in 2005. Within the export of raw material export expanding by more than 20%, it is primarily the export of raw materials of chemical industry and medicine industry that grew as a result of the launch of the production of newly created or expanded enterprises. The export of food product grows continuously and in particular the export of meat products, preserved products and deep-frozen products is outstanding, together with the ever-growing wine export. In the import, the attack of Austrian food industry continued. Growth was realised by processed meat products, milk products and deep-frozen products. The Austrian export policy considers Hungary to be a significant import market and thus they perform a continuous and intensive marketing activity. The growth of the import of machines is determined mainly by the purchase and goods distribution strategy of multinational companies. The incoming processed products are used by the national machine industry (vehicle production, electronics, etc.) and ready-products are exported to third countries.

EMPIRICA, February 2008 44 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

3.9 The flow of capital, and the cross-border activities of enterprises

One of the characteristics of the studied target area is economy, the cross-border activities of enterprises in the border region, market link systems, cooperation opportunities, and growing competition situations, and advantages and disadvantages of the border situation.

When analysing enterprises with cross-border interests, it is soon clear that enterprises with Austrian interests have an outstanding activity in Hungary. This is shown in the following table where it is well seen that the invested capital from Austria was close to 5.2 billion EUR in 2005 which is larger than the 18.5 million EUR of the Hungarian capital by order of magnitude and which latter has fallen to one fifth since 1998.

Table 21: Capital investments, 2001-2005 (million EUR) 2001 2002 2003 2004 2005 Austrian capital 446,7 605,9 706,5 178,7 742,7 investments in Hungary Austrian invested capital 2 754,6 3 235,7 3 725,0 4 593,5 5 183,6 in Hungary Hungarian capital -11,7 7,9 -3,0 38,0 -0,8 investments in Austria Hungarian invested 57,9 7,1 10,2 16,3 18,5 capital in Austria Source: Hungarian National Bank

According to recent data of the Ministry of Economics and Transport and the Hungarian National Bank, the value of the whole invested Austrian capital in Hungary is already above 5.4 billion EUR and its proportion in Hungarian investments is 11%. In 2006, Austrian companies were the second after Germany in the volume of investments. (While the German investment has doubled since 1998, Austrian investors achieved five times the 1998 value by 2006.). Thus Austria became an investor with an importance exceeding its size and economic potentials in Hungary. This is well shown in the next table where we can see the number of workplaces established by Austrian investments (considering the nominal ownership share) and below, the same is presented for Hungarian investors in Austria.

Table 22: The number of workplaces generated by Austrian capital investment by target area (persons) 1998 1999 2000 2001 2002 2003 2004 2005 Europe 174 341 181 298 223 361 247 689 275 671 302 011 339 306 397 164 EU-25 159 841 163 374 198 834 210 104 228 018 244 049 239 999 264 744 EU-15 50 550 50 360 57 571 53 071 61 880 64 000 67 472 82 823 Eastern 121 141 128 107 162 406 190 195 209 399 233 359 266 178 304 554 Middle Europe Hungary 52 492 49 288 48 514 54 217 50 806 55 345 57 680 55 661 Total 187 654 199 164 248 628 270 136 299 074 327 696 370 525 431 744 Source: Austrian National Bank

As to the number of employees, Hungary is the second after the Czech Republic.

EMPIRICA, February 2008 45 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Table 23: The number of workplaces generated by foreign capital investment in Austria (persons) 1998 1999 2000 2001 2002 2003 2004 2005 Europe 196 905 197 260 217 813 217 188 216 564 215 283 210 555 197 210 EU-25 164 369 165 402 179 186 185 418 186 314 183 222 178 046 166 543 EU-15 163 609 164 730 178 520 184 639 185 559 182 490 177 220 165 748 Eastern 893 779 680 801 714 687 778 888 Middle Europe Hungary 442 326 153 184 189 192 227 243 Total 228 450 228 427 251 234 245 559 244 812 240 928 232 802 220 692 Source: Austrian National Bank More than 20% of the approx. 26,000 registered companies with foreign interest are Austrian (5200). According to certain estimations, this value had already achieved 6,000 by 2007 and is to increase further to all probabilities (surveys show that 40% of Burgenland-seated enterprises wishes to get established in Hungary in the near future). A large part of the companies (approx. 70%) are seated / established premises in Budapest or in the Middle Hungarian region and 25% of them, naturally due to the geographical proximity, in the Western Transdanubia region. According to available data, almost half of the investors come from Vienna, and Lower Austria and Upper Austria are also important (15-15%). They are followed by Styrian and Burgenland investors, slightly lagging behind (8 and 4%, respectively). Foreign investments focussed on the competitive area of industry, that is, on processing industry where new manufacturing cultures and products and product families (e.g., the manufacturing and assembly of car parts, computer industry) were established and capacities were modernised. More than 20% of enterprises is interested in machine industry, while one sixth in textile, clothes and leather product industry. In the former sector (mainly in Gy ır-Moson-Sopron county), big entities – with more than 300 employees – are characteristic while in other sectors, mainly in Vas county, smaller enterprises are dominating. Recent years saw a strong increase of foreign interest in hotel and catering industry (mainly thermal bath tourism), trade, and in different services, including financial and personal services (e.g., dental services). From among factors motivating the selection of the seat, respondents highlighted the following areas: • geographical proximity: contacts with home units are easier, they are already aware of Hungarian circumstances, the region was characterised with active economic relationships as early as from the 1980s, and thus, during their development activities, they could have built their Hungarian and later the Eastern European networks from here; • low labour costs; • skills and relatively good language proficiency of the labour force, • advantageous infrastructural facilities; • the obtaining of new markets; • availability of EU tendering sources (Hungary, with the exception of the Middle Hungarian region, belongs to Objective 1 regions). Despite, we can say that it is problematic for long-term dynamic development that the cooperation willingness between enterprises is very low, there are only few projects and developments and the intensity of the relationship between the economic sphere and the higher education and research sectors. However, it is a positive trend that cluster initiatives in the major sectors of the region have been launched continuously since 2000 the objective of which is the promotion of company cooperation and mutual influences, the provision of special services and infrastructure for key sectors and related and background industry being determining in the economy of the region.

EMPIRICA, February 2008 46 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

4 Free movement of commuters and services

4.1 Free movement of the labour force

As from 1 May 2004, Hungary is a member of the European Union. According to Article 18(1) of the Treaty establishing the European Community, every EU citizen has a right to free movement and, within this, to free employment in the whole territory of the European Union. However, during accession negotiations, “old” Member States, in particular Austria and Germany, anxious about labour force from newly acceding countries appearing in large numbers in their labour markets achieved that they were allowed to retain temporary restrictions as to the free movement of the labour force. The temporary period cannot be longer than seven years. In the first two years following the accession, all the old Member States authorise employment of citizens of acceding countries in accordance with their own national legislation. Within the framework of its own national legislation, Austria has a discretionary power either to allow employment free from authorisation, similar to Community rules, or to choose the retaining of restrictions for another three years. Following the end of the fifth year (2+3 years) and until the end of the seventh year, the EU15 or the Member States retaining restrictions may apply rules deviating from the principle of free employment when it can be proven that the application of the Community law, that is, the influx of employees from new Member States without restriction could result in labour market problems.

Citizens of states acceding together with Hungary and their family members, may be employed in each other’s countries without authorisation according to mutuality. However, for those employees who come from old Member States which apply restrictions against Hungary, including Austria, have to obtain an employment authorisation.

No authorisation is needed for the citizens of those Member States which are otherwise subject to authorisation when the person concerned has been employed either under or free from authorisation, • in a legal relationship of at least 12 months, • legally and without interruption at the time of the accession or later.

The two countries have concluded an agreement on the employment of professionals (trainees), and the host country shall issue the authorisation permit without regard to the actual situation of the labour market for these persons (naturally when the application and the applicant comply with requirements of the agreement). Every agreement is mutual meaning that these relate not only to Hungarian citizens being employed abroad but to the employment in Hungary of citizens of states party to the agreement in Hungary, too. Such agreements are valid with Germany and Austria from among older EU states. Individual employment in Austria is governed by two agreements, both concluded in 1998. One is “on the exchange of employees for the enhancement of professional and language skills” in the framework of this young skilled Hungarian persons without a criminal record of 18 to 35 years of age may be employed as trainees for one year (subject to a prolongation of six months) in Austria.

The other agreement is “on employment in border regions”. The agreement relates to the employers commuting every day from Vas, Zala and Gyır-Moson-Sopron counties to Burgenland province of Austria and the district of Bruck/Leitha. Such an employment permit is subject to the person having resided in one of the three counties at least for one year. An employment permit is valid for six months, but may be prolonged several times for the same period. There are professions where Austria does not accept Hungarian employees (e.g., masons and construction industry semi-skilled workers, textile and machine processing industry skilled workers), however, commuters are welcome in agriculture and tourism. EMPIRICA, February 2008 47 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

The Austrian–Hungarian Joint Committee increased the number of permits to be issued under the Commuters Agreement from 2,200 to 2,350 at the end of 2006. From the allowed 2,350 persons, 2,080 may be employed in Burgenland and 270 in Bruck an der Leitha. The numbers in Burgenland are divided along the three categories defined by the Austrian party as follows: catering 516, agriculture 379 and other 1,185. The number of first permits issued in Burgenland is 138, those prolonged 130, and that of certificates for exemption from authorisation is 1,961. In Bruck an der Leitha, the number of first permits is 36 due to the withdrawal of some permits, that is vacant permits remaining after 2006, and that issued as prolongation is 18, while of certificates for exemption from authorisation is 15. The trends in the quotas under the Commuters Agreement and the numbers of submitted applications, issued permits and certificates for exemption from authorisation is shown in the below table:

Table 24: The trends in the quotas under the Commuters Agreement and the numbers of submitted applications, issued permits and certificates for exemption from authorisation 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007* Quota 550 650 900 1200 1400 1700 1900 2050 2200 2350 Appl. 1 365 673 1 126 1 163 825 934 852 431 372 349 1st permit 585 300 404 409 274 414 360 160 154 174 Prolong. 197 884 1 349 1 954 2 329 2898 1057 168 174 148 Ex. cert. ------1401 1687 1857 1976 Source: Regional Employment Service West Transdanubia *: until 12 November 2007

The division of commuters applications corresponds to proportions of the recent years: 69% of applications were submitted by employees from Gyır-Moson-Sopron county, 29% from Vas county and 2% from Zala county. The same proportions apply to the division by county of issued commuter’s permits. From among the categories, it is still the individual sector that produced the largest number of applicants (66%), followed by catering (30%); agriculture (4%).

Although the number of applications submitted in 2007 is beyond that in the previous year, the number of applications with an employer’s promise and the requests from Burgenland employers clearly show that demands are present at both sides and exceed the present quota. Therefore it can be suggested from the Hungarian side that the quota be increased to an extent, approx. by 200 to 300, that does not result in special problems in the labour markets of counties of Western-Hungary and Burgenland. All this means that despite temporary regulations to be kept until 30 April 2011, more and more demands emerge in issues of the Austrian–Hungarian border region relating to employment. This information demand could be provided for by an EURES-T partnership the best.

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4.2 The number of cross-border commuters, their characteristics and motivations

An accurate analysis of employees with authorisation and thus appearing in official statistics, employed in neighbouring countries were provided above. The accurate number of those employed officially and non officially commuting across the border is much more difficult to estimate. At the end of the nineties, the number of daily commuters was estimated to be 10 to 15 thousand which was quite unilateral, that is, it has meant the commuting of Hungarian employees to Austria up to now. Now it is mainly the owners and the managerial level that comes to Hungary to work, their number is 200 to 300. In such a case, employees are salaried in Austria and it is common that the managers of several companies with foreign ownership live in Austria instead of moving to Hungary and commute to their Hungarian premises every day.

Several studies, analyses and surveys were prepared on Hungarian employees commuting to the neighbouring state recently 15 . In his 2005 study, Tamás Hardi (MTA Centre of Regional Researches) 16 tries to present the group of legal and illegal employees working in Austria with the help of a questionnaire designed for the population and especially for employees, to estimate their numbers, to describe their characteristics, motivations and difficulties. According to the results of his survey, when projecting the results to the whole population, it can be said that already 60 to 70 thousand persons from the population of the three border counties have been employed in Austria since the change of regime and, nowadays, it is 7 to 8 thousand persons from the 30 km range affected most and 9 thousand persons altogether from the three counties that commute to work in these days. Those who have already worked in Austria, the majority (57,7%) had no permits while the others did. The answers show that Austrian employment is typical in the case of young adults mainly and of the age group of 50 to 59 years, and rather in the case of men than women. Within this, illegal employment concerns young adults mainly (30 to 39 years). According to approximating estimations, the number of those who go to work to Austria every day during seasonal agricultural works is above 10,000. Such calculations were supported by several experts but a survey at the end of 2005 provided accurate data, too.

According to the survey of Planungsgemeinschaft Ost in Vienna 17 , under the commission of CENTROPE region and which contains data from Gy ır-Moson-Sopron county only, the whole traffic of the border-crossing included more than 6,000 persons crossing the border individually and 600 by train or bus in Nickelsdorf- and Sopron. When comparing these data with the value that from the Hungarian commuters of the study area 65 to 70% commutes from Gy ır-Moson-Sopron county, then the total number of the commuters of the whole Hungarian border area is actually around 9,400 to 10,100. This value approximates the calculations of Mr Hardi (9000 persons), however, it does not contain the number of commuters participating in trainings (200 to 300 persons).

15 One of the deepest analyses were prepared by WIFO under the title „Labour Market Monitoring II – Veränderungen auf dem Arbeitsmarkt im Zuge der EU-Erweiterung” (Vienna, 2007) 16 Tamás Hardi: Határon átnyúló ingázás, munkavállalás az osztrák-magyar határtérségben (Tér and Társadalom Vol. XIX., Issue 2005/2: pp. 65–81) 17 Planungsgemeinschaft Ost: Personenverkehrserhebung Grenzübergänge Ostregion, 2005, http://www.pgo.wien.at EMPIRICA, February 2008 49 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Map 8: The study of the traffic of Eastern border-crossings of Austria for target traffic – commuters, individual travel (persons, 2005)

Source: PGO Wien, 2005

Map 9: The study of the traffic of Eastern border-crossings of Austria for target traffic – commuters, public travel means (persons, 2005)

Source: PGO Wien, 2005

From this, the proportion of those employed without authorisation is to be estimated at 60 to 70% (Hardi, 2005), however this value did not change significantly since the accession of Hungary to the EU. This range is a labour force seeking for occasional plus salary and typically with low qualifications.

Employees without authorisation work usually in agriculture/wood industry, households and other sectors, usually those requiring low qualification. An evident relationship can be traced between qualification and the obtaining of work permits since the employee would not launch the authorisation procedure for occasional jobs which cannot be pre-designed and it is not supported by the employer, either.

Examining the motivations of the commuters, higher income and supplementary income are evidently prominent. Besides, further factors may also play a role, including:

• better working conditions than in the home country, • professional aspects, professional development opportunities; EMPIRICA, February 2008 50 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

• opportunity to use Austrian social benefits (for authorised employees only) • language learning opportunity (mainly for the young)

When assessing the availability of information on employment, and the way of obtaining employment, results were definitive regarding the EURES-T partnership and the necessity of its establishment, too. According to these, most people prefer individual search for work and information from friends and relatives. It is striking, however, that only few try to get Austrian jobs through official bodies, labour offices or municipalities. Job seekers first contacted official bodies only for administrative matters and not for prior information gathering and job searching. From among anti-mobility factors (discussed in Chapter 5), the above mentioned study analysed the area in question and established that the biggest problem is deficient language proficiency and consequent negative discrimination. Besides, different cultural habits, and working culture do not result in so many problems for employees in the Hungarian–Austrian border region. The least difficulty, however, is caused by integrating into the legal framework and everyday life, quite surprisingly. This is probably the result of the fact that several years of experience of commuting, and information from the narrow and wider environment are an appropriate basis for those with entrepreneurial wishes. As a summary, we can say that the phenomenon of commuting at the border of Austria and Hungary has always been the inevitable and everyday phenomenon of an economic area being traditionally related. Changes of forthcoming years, including the introduction of free movement of labour, equalisation of differences in living standards, the elimination of legal obstacles shall all contribute to the elimination of illegal elements of the labour market and to the creation of a uniform region.

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4.3 Freedom of the provision of services, and freedom of establishment

Enterprises of the European Union are free to provide services within the territory of the Community (Article 49 of the EC Treaty on the free movement of services). This right is available for newly acceding Member States, too. Similarly to the issue of the free movement of labour, it was Germany and Austria from “old” Member States to express their concerns regarding the service providers of new Member States as threatening their markets during the accession procedure and thus they introduced temporary restrictions, similarly to the issue of the free movement of labour:

• horticulture services; • stone processing; • manufacturing of metal structures and structural elements; • construction industry and related activities; • security activities; • industrial cleaning; • home patient care; • social care without accommodation.

Similarly to the issue of the free movement of labour, temporary arrangements can be prolonged until 30 April 2011 at the latest for services (the first two-year phase lasted until 30 April 2006). In the sectors concerned, employees of companies seated in Hungary can provide services in Austria under agreements between states on commission only until the elimination of restrictions. Accordingly, quotas of Hungarian employees allow that the employee of a Hungarian company may work in Austria under a contract of commission between his employer and the commissioning Austrian company. Companies seated in Hungary active in every other sector may provide services freely, without any restriction in Austria. They may second their employees for the duration of the commission contract, in order to perform a certain job, without any restriction on employment whatsoever. Furthermore, the citizens of the European Union are entitled to free establishment meaning that they may establish companies or seats or branches in any Member State (Article 43 of the EC Treaty). In our case, it means that Hungarian and Austrian citizens are free to establish companies with any field of activity without restrictions in Austria or Hungary even with an activity which is still subject to restrictions.

In recent times, several pretended single-person undertakings were reported which were established by Eastern European professionals, mainly butchers, tilers etc., who tried to avoid restrictions on the free movement of labour in such a way. It cannot be proven with reliable sources, however, we can say that the number of such cases is not significant as related to the number of all commuting employees. According to the opinion of experts, the avoiding of restrictions due to opportunities provided by free establishment under which employees were employed from new EU Member States as pretended entrepreneurs is not significant in the border region between Austria and Hungary. According to experiences, the opportunity of legal commuting, the continuous increase of commuters’ quotas and the increasing demand for good professionals makes it senseless to establish and operate pretended undertakings which have serious sanctions under labour law.

However, the issue should be revised in details, too, to be realised within the framework of the future EURES-T partnership mainly. Results and experiences from the survey may be passed to partnerships already existing or to be established in the near future between old and new Member States of the EU.

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5 Necessity of forming the EURES cross-border partnership

5.1 Existing cross-border structures, synergy effects

The EURES-T partnership to be established in the Austrian-Hungarian border region could join several cooperations already existing on project level. Links to be established can be determining in the first phase of cooperation since several successful and determining projects in the field of the labour market were realised in recent years in the border region the results and experiences of which can be utilised by the organisation of “EURES-T Pannonia”, too. Most of these were launched as projects financed by PHARE CBC and later by Interreg programmes and in the following we present the most significant ones of these.

EUREGIO – West / Western Pannonia

It is the cross-border interest community of three counties of the Western Transdanubia region (Gy ır-Moson-Sopron, Vas, Zala) and Burgenland province the framework agreement establishing it was signed in Eisenstadt on 7 October 1998. The organisation is a private interest community without legal personality and as such it has no competences, it is rather a decision-preparing and proposal-making body. The development strategy of the border region was elaborated not earlier than in 2004.

EuRegio has common economic, social and cultural affairs and infrastructural issues on its agenda which are realised within the framework of concrete projects. The development of partner regions is made possible by intensive cooperation affecting the following areas, basically in the framework of working groups.

• Land planning, regional development, transport and information • Economy • Tourism, culture and common cultural heritage • The protection of nature, environment and waters • Public security and disaster eliminating services • Health and social affairs • Education and youth policy • Employment

The EuRegio also includes the coordination, management and support of cross-border projects and programmes.

EUREGIO – West / Western Pannonia EuRegio Employment Pact

A cross-border employment policy cooperation of more than one decade has been launched in 1991 and is still existing between Western Hungary and Eastern Austria which first was supported by the aid programme to eastern countries (Ost-Hilfe) and later by the Office of the Federal Chancellor of Austria, and later by the Federal Ministry of Labour of the Republic of Austria and the Ministry of Labour of the Republic of Hungary than by Phare CBC and Interreg programmes of the European Union after 1995 and own national resources of the two states. The joint work resulted in the continuous development and deepening of labour market and employment policy cooperations between the partners concerned, between the Federal Ministry of Economy and Labour, the Labour Market Service of Burgenland (AMS) in Austria, and the Labour Centres of Gy ır-Moson-Sopron, Vas and Zala counties in Hungary. An excellent form of this cooperation is the Convention on Cross-border Commuters between Austria and Hungary entering into force in 1998, together with the continuous exchange of experiences and the transfer of know-how within the working group of the EuRegió. As a sign of the deepening of the cooperation, the three counties (Gy ır-Moson-Sopron, Vas and Zala) and the County Labour Centres, Burgenland province, and the Burgenland Labour Market EMPIRICA, February 2008 53 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Service (AMS) signed a framework agreement in 2004 for the preparation of a cross-border employment pact within the EuRegio. The employment pact was concluded as a result of this framework agreement. The employment pact of the area is the contractual cooperation of the stakeholders of several sectors of a region for the development of employment structures. The agreement was signed on 27 June 2007 in Szombathely. As a general objective, the improvement of the employment level within the EuRegio, and the equalisation of real wages and the related positive development of the social level were declared. The realisation of this objective is to be achieved by the following measures, most of all: the continuation, construction and development of existing cross-border cooperations, networks and partnerships within the framework of the EuRegio, the intensifying of the exchange of experiences between project partners within the EuRegio, the common development and realisation of innovative regional labour market projects by taking into account the provisional measures and the valid statutory provisions.

EXPAK – Austrian-Hungarian Expert Academy

Austrian-Hungarian Expert Academy is a programme for the development of cross-border cooperation in the fields of labour market and employment policy. The offering of this programme in the fields of information, debate and network building targets stakeholders relevant for employment policy, organisations and offices in Western Hungary and Eastern Austria. It is an institutionalised learning environment in the framework of which participants prepare for challenges to be expected following the accession of Hungary to the European Union.

Major objectives of the Expert Academy include: • the elimination of unemployment in the whole border region by improving communication between the stakeholders of labour market policy, and the economic life, the social partnership and civil social spheres and making it more intensive, • the concept, debate and realisation of programmes and measures in the fields of labour market and regional policy being new or already established in the European Union, • the permanent institutionalisation of the Austrian-Hungarian Expert Academy as a theoretical and conceptual workshop for the labour market and regional policy of the whole region.

LAMO – labour market monitoring

Within the framework of the “INTERREG III A” project entitled “Labour market monitoring (LAMO) – The development, application and enforcement of a monitoring tool for the regular monitoring of changes in the labour market during the enlargement of the EU”, national and international experts elaborated a common monitoring set of tools which communicate reliable data on changes in the labour market, with a special regard to labour migration and to the employee potential who commute to another country to work. The monitored area includes the areas neighbouring the Czech Republic and Slovakia of Lower Austria, the Vienna agglomeration and areas next to Hungary and Slovakia of Burgenland province and thus affect “the CENTROPE Middle European region”, too. The aim of the project was to supplement objective data on the labour market with subjective information on the willingness of people living in border areas to commute or to move to another country for work and to foresee future development according to data received. For the complex knowledge of the labour market, we should survey the actual labour force demand of the given regions.

IGR – Interregional Trade Union Council

The original aim of the project was to prepare Hungary and Austria to the accession into the EU in 2004 of Hungary. Strong cooperation and coordination was established between EMPIRICA, February 2008 54 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Hungarian and Austrian professional organisations so that they aim at a constructive accession and multilateral integration process within the framework of a project. However, the activities of IGR Burgenland-Western Hungary have not been terminated with the EU accession of Hungary. The reason is that the border region between Burgenland – Western Hungary is confronted with basic modifications arising from the Eastern enlargement of the EU(e.g., labour market).

Major aims include: • The establishment of cross-border employment relationships being correct for social and labour law • The equalisation of collective agreements and working conditions • The harmonisation of labour law and social security systems • The ensuring of a minimum social level of employees • Cross-border training measures • The construction of cooperation and coordination networks and their permanent development • The elimination of “barriers” in the thinking of people.

EU enlargement may provide a lot of advantages for every stakeholder, however, this is subject to the proper management of the process. Thus plans and strategies are continuously developed which, on the one hand, reduce possible negative effects of the EU enlargement, and utilise the undoubtedly great potential of the EU both on the regional and the extra-regional level.

LAGERA – Labor for the common development of regional labour market

LAGERA – „Labor for the common development of regional labour market” – this INTERREG IIIA project aims at preparing the labour market, enterprises and employees of the Austrian- Hungarian border region for the period following the provisional regulations of the free movement of labour. Major stakeholders and interest representations of the labour market participate in the work so that problems in organisation, economy, society and atmosphere between the two countries be highlighted and solved. Project aims include, among others, the clarification of legal and training demands, the collection of information related to the structure of employment, and the realisation of a pilot workforce exchange project.

CENTROPE – Labour experimental project

In the CENTROPE region (involving border areas of Austria, Hungary, the Czech Republic and Slovakia) in the heart of Europe, approx. 6.5 million people live and work. The major aim of the project is to create a competitive and dynamically developing European region in the area which utilises economic and political opportunities just like linguistic and cultural diversity. In order to have this achieved, policy-makers declared their will to support the establish and support CENTROPE in 2003. Within the framework of an INTERREG IIIA project, preparatory works were realised for that the CENTROPE initiative may be positioned as a cross-border region and a cooperation structure. CENTROPE is to be considered a “pilot project” which provides a multilateral and sustainable framework for cooperation for the undertakings, social organisations and municipalities of the region in question. Furthermore, it contributes to the coordination of already existing cross-border activities and future initiatives, their coordination and linking with each other. Where possible, it works with a professional management on the promotion of the establishment of synergies benefiting those concerned in the most possible areas. For this purpose, it tries to activate public institutions, private and trade organisations which may contribute to the reinforcement of the region. The dynamic development and the flourishing economy of the region necessitates the introduction of labour market and employment policy measures for the operation of a

EMPIRICA, February 2008 55 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary common labour market. Within this, the priorities are the mutual provision of information e.g., in the form of comparable data which may serve as a basis for the debate of provisional regulations maintaining the restriction of the free movement of labour, on the one hand, and the knowledge of organisational structures and competent entities in the neighbouring countries which may have an important role in future cooperation on wage dumping and black work, and the establishment of future strategies.

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5.2 Specific local and regional parameters

5.2.1 Geographical parameters, transport infrastructure

The establishment of an EURES-T partnership is basically subject to that regional geographical features and in particular the transport infrastructure allow for cross-border commuting between the residence and the workplace. We do not encounter hard geographical obstacles in the Austrian-Hungarian border area and transport infrastructure is presented as follows.

Certain areas of the region have different transport capacities. Whilst the Vienna – Northern Burgenland and Gy ır-Moson-Sopron county axle has a road network of big capacity and high level (A2, A3, , S4, S31 and M1), it is basically the southern areas that have accessibility difficulties for the elimination of which serious parallel efforts are made. The construction of the B63 or the Fürstenfeld motorway can be the result of this development intention. Furthermore, the Kittsee bypass of A6 and the prolongation of A3 until Sopron and of E84 to Sárvár, and of E65 from Hegyeshalom through Csorna to Szombathely is foreseen. According to the plans, B65 is to be expanded to having four lanes and to be linked to the Budapest motorway (M8).

The transport situation of the Western Transdanubia region is basically determined by its location next to four countries (Slovakian, Austrian, Slovenian, Croatian border sections) and its settlement structure. Major road, railway, and water movement axles can enter the country here and cross its territory (it is this region where 60% of the total road and especially road transportation traffic leaves the country).

The region is connected to three Helsinki transport corridors, too, one of these being the pan- European transport corridor No. IV which connects the western part of Europe and the Balkans, and the other is No. VII which indicates the water course of the River Danube while the third one is the pan-European transport corridor No. V and one of its sub-branches is corridor V/B. Part of corridor No. IV is the M1, M15 motorway and the railway line between Budapest-Hegyeshalom, while that of No. V is motorway M7 which connects to at Letenye, and M70 connects to Slovenia at Tornyiszentmiklós as part of corridor No. V.

These transport corridors cannot serve North-South traffic routes which show dynamic development. In the Western Transdanubia region, a prominent North-South transport corridor is missing, together with M9 and M86 motorways and a quality railway line which could have special importance both for the internal cohesion of the region and in the Baltic– Adria relation while it could link the mentioned pan-European corridors, too.

Border-crossings

As from 22 December 2007, personal checks were abolished, among others, at the Austrian- Hungarian border, too, since Hungary acceded to the Schengen area. As regards cross- border commuters, the following border-crossings have to be mentioned as possible transport corridors from which 6 road border-crossings are expressly recommended and 3 are of limited use for commuters and there are 6 railway border-crossings altogether. The major part of the traffic is managed by Nickelsdorf-Hegyeshalom and Klingenbach-Sopron border-crossings. Almost two third of the commuters between the two countries commute from Gy ır-Moson-Sopron county and use the above-mentioned two border-crossings.

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Border-crossings between Gy ır-Moson-Sopron county and Burgenland:

By car: • Nickelsdorf – Hegyeshalom • Klingenbach – Sopron • Deutschkreuz - Kópháza

Limited: • Pamhagen - Fert ıd

Railway border crossings: • Fert ıújlak-Pamhagen • Hegyeshalom-Nickelsdorf • Sopron → Schattendorf; Loipersdorf;

Border-crossings between Vas county and Burgenland:

By car: • Schachendorf- • Rattersdorf-Liebing-Kıszeg • Heiligenkreutz- Rábafüzes

Limited: • Eberau-Szentpéterfa • -Bozsok

Railway border crossings: • Szentgotthárd

Rail transport:

The situation is similar in the area of railway transport. Sopron is part of the Transport Network of the Eastern Region (VOR) even now; the northern part of the region is well accessible and, some cross-border rails have not yet been replaced which were cut after the second world war. From strategic aspects, the construction of the Vienna – Schwechat airport – Vienna – Wampersdorf (EWIWA) is an especially important project together with the development of the Wampersdorf – Eisenstadt – Sopron (EWESO) railway section to Szombathely (connecting to the link between Graz – Budapest). Thus Eisenstadt and the two centres in Western Hungary, Szombathely and Sopron, could be linked to the airport of Vienna.

Now the region has connections to several major railway lines of the international basic network which provide links between the Hungarian capital and neighbouring countries via the border-crossings at Hegyeshalom, , Sopron, Szentgotthárd, Bajánsenye, Murakeresztúr. The northern-southern railway link is determined by the Gy ır-Celldömölk- Szombathely, Sopron-Szombathely, Szombathely-Nagykanizsa lines. The region has two railway companies, MÁV and GYSEV. There are two major regional airports in the Hungarian part of region. One is the Sármellék airport next to the Lake Balaton and the other is the airport of Pér next to Gy ır. In Austria, the international airport of Schwechat is the most important airport of the region in general.

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Map 10: Transport infrastructure of the study area (network of roads and railways)

Source: Centrope and Mecca Consulting

The next table shows distances from larger towns in Austrian border areas within 90 minutes of travel time (for one way). By taking into account the obstacles of geographical and transport infrastructure, it well illustrates routes relevant for cross-border commuters and the advantageous situation of the north-western part of the region.

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Map 11: Accessibility of the Austrian border region (Austrian-Hungarian) (within 90 minutes)

Source: Statistik Austria; Design: ÖIR Informationsdienste GmbH

The average travel time can be estimated only, and is subject to several factors. The following table presents the distance between major towns and cities and the corresponding travel time. The table is a good illustration of the fact the use of mass transportation means, e.g., railways is not possible in every case. This is well illustrated by surveys which show that individual travels (by car) amount to 95%. The disadvantage of southern areas is well shown by the travel values of the two towns in Zala country, Nagykanizsa and Zalaegerszeg, from where not a single Austrian can be reached within one hour. Thus commuters are mainly the inhabitants of small directly next to the border the proportion of which is below 5% from all commuters.

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Table 25: Distance and travel time between major towns and cities (Car and train) Car Train Distance / Travel time / Travel time / km min min Gy ır-Wiener Neustadt 134 93 140 Gy ır-Eisenstadt 105 77 x Gy ır-Schwechat 111 66 x Mosonmagyaróvár-Schwechat 75 49 x Mosonmagyaróvár -Wiener Neustadt 98 75 180 Mosonmagyaróvár -Eisenstadt 70 59 x Mosonmagyaróvár -Bruck 46 35 40 Sopron-Mödling 59 42 x Sopron-Wiener Neustadt 42 35 40 Sopron-Eisenstadt 23 22 x Sopron-Mattersburg 32 28 15 Szombathely-Oberwart 36 40 x Szombathely-Güssing 52 61 x Szombathely-Oberpullendorf 37 47 x Szombathely-Wiener Neustadt 88 82 130 Szentgotthárd-Fürstenfeld 23 24 x Szentgotthárd-Feldbach 44 43 35 Szentgotthárd-Hartberg 60 48 x Nagykanizsa-Fürstenfeld 152 156 x Zalaegerszeg-Fürstenfeld 77 86 x Zalaegerszeg-Güssing 55 69 x Source: Own calculation

On the whole, we can say that the transport infrastructure of the Austrian-Hungarian border region, with the exception of the northern axle, shows significant weaknesses which naturally affect the number and the mobility willingness of commuters. With the help of the above- described road and railway developments, this is to be improved in the near future however we can see that such deficiencies have not deterred those who wished to get employment in the neighbouring country. Following the Schengen opening, the opening of further, smaller border-crossings should be made available together with these being linked to the regional traffic.

5.2.2 Factors preventing mobility

As we have already presented it in Chapter 4.2, the extension of cross-border mobility within the study area corresponds to the European average. Despite, it is significantly weaker than the domestic mobility of the countries in question. It has several reasons, and a range of factors prevent commuters from cross-border mobility, including those which are not relevant within a country. Such factors preventing mobility operate as “filters”. Every obstacle is a kind of a “filter” between those who are willing to commute in theory and those who actually do. As a result of the obstacles, the number of the employees is significantly reduced. This filtering effect is shown in the next figure.

EMPIRICA, February 2008 61 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Figure 6: The “filtering” effect of factors preventing mobility

Employees who are willing to commute in theory

Geographical obstacles Transport infrastructure Lack of information and of the transparency of the labour market Wage level, taxation and social security systems Legal and administrative problems Recognition of qualifications Cultural and linguistic obstacles ↓↓↓↓↓↓

Employees actually commuting

According to Figure 6, major selective factors can be divided into six groups.

I. Geographical obstacles, transport infrastructure Such factors have already been presented in subchapter 5.2.1.

II. Lack of information and of the transparency of the labour market When an employee looks for employment in the Austrian-Hungarian border region, it is evident that he can get information from sources only which actually reach him and with which he can get acquainted and which he can understand. Evidently, the same applies to employers looking for well-qualified labour force, too. It is hard for both parties to get information from the other side of the border which is easily accessible, reliable and utile. The study area features these information problems in several aspects:

• Linguistic obstacles between the two countries pose great difficulty in understanding and processing existing information material. • Sources from which employees and employers can get information regarding vacant jobs and job-seekers (newspapers, Internet job databanks) usually target the national public and have no cross-border coverage. • The unlimited exchange between regional labour centres of registered vacant jobs is an inevitable condition of the establishment of a transparent cross-border regional labour market, however, conditions of this are still not provided. • Access to relevant information is more difficult in issues where differences between the two countries are high (e.g., in taxation and social security issues), since here no relevant information points or contacts are established. • Information sources are dispersed. Not a single database is available for those interested where all the relevant information can be accessed at the same place (job vacancies, recognition of qualifications, social security and taxation law etc.). • The description / presentation of training levels and qualifications, and the presentation of the recognition of qualifications and of differences are deficient.

EMPIRICA, February 2008 62 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Due to such information problems, it is evident that many employees are deterred from looking for employment in the neighbouring country and many employers do not prefer to employ foreign employees or decide on the basis of bad and unreliable information. Cross-border counselling and information provision have been operational both for the employee’s and the employer’s side within the framework of IGR and is expected to continue its operation in the coming period. There are no commuters’ associations and organisations which are able to provide information on the basis of their contact systems as regards the topic. In the future, this area poses a lot of tasks which could be covered by an EURES-T partnership, in cooperation with partnership programmes and organisations.

III. Wage levels, tax and social security systems The most important questions asked by an employee when looking for jobs in the neighbouring country are the following:

• “How much money will I earn there? How much will my wage be?” • “Shall I get the same level of social benefits as at home?” • “What about my pension following the period spent abroad?”

In answering the above questions, several factors should be paid attention, including the characteristics of wage costs, or the characteristics of several national social security and tax systems. High differences in wages between Austria and Hungary (see subchapter 3.4) have encouraging effects naturally mainly for Hungarian employees to seek jobs in Austria, and, at the same time, prevent Austrian employees from getting employment in Hungary. Despite the fact that wages increase speedily in Hungary, this difference and therefore the direction of commuting shall not be reversed soon. Commuters have to get acquainted with the different taxation systems of the two countries, apart from major differences in wages. This affects both direct taxes (e.g., personal income tax), and indirect taxes (e.g., value-added tax, VAT) which might result in practical problems the answering of which is not quite easy. (Such are, for example, the deduction of kindergarten costs from the tax when the child is placed in a kindergarten of the neighbouring country). And the regulation of social security issues is settled on national level by all EU Member States which does not pay much attention to eventual problems of cross-border commuters.

IV. Legal and administrative problems For commuters, it is very annoying to cope with the series of bureaucratic obstacles posed by different laws and regulations and, naturally, official procedures for the employees and thus these often become factors preventing mobility. The operation of offices organised on territorial basis can be a preventing factor regarding mobility in some cases just like the lack of flexibility in competence issues (the country being centred on the capital)

Still, now the major factor preventing mobility is the restriction of the free movement of labour (see 4.1 Free movement of the labour force). Related provisional regulations shall be repealed by 01.05.2011 at the latest and the free movement of labour can be actually realised in the whole territory of the European Union.

V. Recognition of qualifications In theory, every EU citizen has an opportunity to apply to jobs in the whole area of the European Union, except for the public administration in some cases. This basic right, however, is highly restricted by national regulations on the recognition of foreign qualifications. In many cases, an employee may not get a job in the neighbouring country because his qualifications are not recognised there. However, it is not only the recognition of qualifications but the comparability of work experiences and trainings that has to be stressed, too.

EMPIRICA, February 2008 63 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Apart from several differences of the statutory regulation, problems arising from the training systems of the two countries further impede the situation; employers often cannot make certain the actual training contents an applicant has acquired during his training and whether he is able to fulfil the required job or not. We already have initiatives for the solution of this problem however the present situation is far from being appropriate.

The EURES-T partnership to be established should present the characteristics and differences of training systems and solution suggestions.

VI. Cultural and linguistic obstacles The multicultural character of European regions is an invaluable asset of the European Community however in some cases it might produce mental and psychological obstacles the elimination of which is a very difficult and usually hard factor in preventing mobility. Many employees prefer commuting more than 100 km within their own country to even considering the possibility to look for employment in the neighbouring country just 20 km away. Employers are characterised by the same; many times they just do not think about recruiting labour from the other side of the border, although it could be an economically advantageous step for them. People are highly influenced in their decisions by “mental borders”.

In the studied cross-border area, further cultural aspects might occur:

• The presence of linguistic obstacles and the lack of language skills may play an important role here, too. This is particularly true for the participants of the Austrian labour market since the majority of Hungarians living next to the border does speak some German which is not true backwards, due to characteristics and difficulty of . • The old and the middle-aged generation still keeps memories from history which had strong effects on a certain period of their lives, the traces of which cannot be eliminated and which strongly influence them in their decisions. (Second world war, cold war between Eastern and Western Europe for forty years, the iron curtain, etc.)

For the younger generation, it is now no more than history to which they do not pay much attention and they lack personal links. Open borders, the exchange of cultural goods and multi-culture are natural for them. Accordingly, we can only hope that factors preventing mobility arising from cultural differences keep on losing from their significance.

As a summary we can say that there are a lot of factors preventing mobility in the Austrian- Hungarian border region which, however, do not pose unsolvable problems, regarding the relatively high number of commuters from Hungary to Austria. However, opportunities of Austrian commuters, due to lower wages in Hungary, are to be remain restricted for a longer time.

5.2.3 Cross-border synergic effects A range of economic and labour aspects are present on the Austrian and the Hungarian side of the studied target area within the framework of which, the two sides of the border may be complementary to each other. The mutual and proper utilisation of such experiences can have synergy effects which may be useful for the whole border region:

• Economic experiences

The Austrian side has comprehensive and reliable knowledge as regards market economy processes social partnership and corporate management. On the other hand, the Hungarian side is more experienced in the proper management of Eastern European markets and economic and social structures.

• Economic structure and labour market EMPIRICA, February 2008 64 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

As to the structure of the labour market, the two sides might be considered similar meaning that there is a labour force with the similar level of training and knowledge on both sides from industry to tourism. This enhances the choices of the employers in the selection of the appropriate labour force.

In certain sectors, significant cross-border cooperations and economic networks have been established (e.g., cluster initiatives). Cooperation in common sectors must include the common training of the labour force, too. Tourism in the study area benefits even now from the fact that both sides are basically strong regions of tourism and this could be utilised more by common measures. Advantageous production conditions and capacities of the Hungarian side allow that Austrian cross-border companies retain and even enhance their international competitiveness.

• Training systems

The structure of the educational system shows major differences between the two countries. Such differences are not just obstacles to development; different experiences allow for learning and benefiting, too. The EURES-T partnership to be established would have as one of its major tasks the management of this problem and to provide proper information on the characteristics of deviating systems.

5.2.4 Deficiencies of the labour market (training deficit and surplus)

The 9 to 10 thousand commuters of the studied border region commute in one direction, from Hungary to Austria and got employment mainly in the agriculture, in tourism and in industrial production.

As a result of demographical changes occurring in the following period (decrease in the number of the population, ageing society, emigration, etc.), the effects of which concern both countries alike, the labour market structure of Austria and Hungary undergo a significant change and their social benefit systems have to be reformed deeply. The young and middle- aged generation of the common region may play an important role in the solution of above mentioned problems of the whole border region. This potential may be reinforced by the partnership basically in the field of cross-border cooperations in training and vocational training (e.g., the exchange of trainees).

The elimination of the restriction of the free movement of the labour force and deficiencies in training systems, linguistic obstacles, and deficient language skills are still against the establishment of a common labour market pool. As soon as these problems are solved, a more efficient utilisation of a common labour market pool would be possible which could be advantageous for the economic development of the study area, too. Problems can be solved by all means. Within some years, provisional regulations shall be repealed and the free movement of labour is to be realised.

The EURES-T partnership may play an important role in that it provides information about the training contents of the neighbouring country on both sides of the border.

EMPIRICA, February 2008 65 5.2.5 The Austrian–Hungarian cross-border territory in European comparison

Table 26: The EURES-T Pannonia in European comparison Order by Area Area (km²) Order by Inhabitants Inhabitants (Person) 1 PYREMED/PIRIME 105 032 PYREMED 10 994 945 2 Tornedalen 65 800 EuresChannel 7 913 705 3 Galicia/Região Norte 50 853 Saar-Lor-Lux-Rheinland/Pfalz 7 887 951 4 Saar-Lor-Lux-Rheinland/Pfalz 48 554 Galicia/Região Norte 6 273 422 5 EURES-INTERALP 39 699 EURAZUR 6 132 021 6 EURAZUR 36 818 Oberrhein 5 714 653 7 P.E.D. 29 369 EURES-INTERALP 5 662 443 8 TransTirolia 27 153 EURES Rhein-Waddenzee 5 370 000 9 Northern Ireland-Ireland 25 692 Euregio Rhein-Waal 4 539 000 10 Bayern-Tschechien 24 993 Bodensee 3 735 694 11 Danubius 23 355 Øresund 3 520 000 12 EuresChannel 23 063 Euregio Maas-Rhin 3 216 052 13 EURES Rhein-Waddenzee 23 000 EURES Danubius 3 124 398 14 Oberrhein 21 517 Scheldemond 2 875 886 15 Øresund 21 000 P.E.D. 2 784 271 16 EURES „Pannonia” 20 780 Bayern-Tschechien 2 409 826 17 Bodensee 15 936 Northern Ireland-Ireland 2 099 295 18 Euregio Maas-Rhin 11 908 EURES „Pannonia” 1 947 505 19 Euregio Rhein-Waal 8 976 TransTirolia 1 323 483 20 Scheldemond 7 931 EURES Cross Border Sonderjylland 679 707 21 EURES Cross Border 4 145 Tornedalen 371 420 Sonderjylland

5.3 The results of the questionnaire survey

The background and the objectives of the survey

The study was complemented by a study so that we get acquainted with the opinions of those employed in Hungarian and Austrian institutions as regards cross-border cooperation, EURES-T partnership and the mobility of the labour force in the territories of Eastern Austrian and Western Hungary.

The research posed the following questions:

Part I: Existing cross-border cooperations and their characteristics • Visibility of cross-border cooperations • Participation in cross-border cooperations, motivation and intensity • Reasons for rejecting the participation in cross-border cooperation • Attitudes regarding cross-border cooperations • Effects of cross-border cooperations on border relationships • Quality of cross-border cooperations before and after the EU accession and in the near future • Part II: Issues related to EURES-T partnership • Essential elements, advantages and possible disadvantages of EURES-T partnership cooperation • Short and long-term expectations related to EURES-T partnership cooperations • The assessment of partnership tasks related to EURES-T cooperations • Willingness for cooperation in EURES-T partnership

Part III: Issues related to the mobility of the labour force • The assessment of difficulties related to the employment of Hungarian employees living in settlements next to the border • The assessment of difficulties related to the employment of Austrian employees living in settlements next to the border • Solution suggestions for difficulties related to cross-border employment • The assessment of aspects arising during the employment of employees living in settlements along the Hungarian and Austrian border

The full bilingual questionnaire is attached to the study as its annex.

Methodology of the research

As to the methodology of the research, we used questionnaires to be filled in by the respondents. The questionnaire had both open and closed questions. Questionnaires were sent to the respondents via e-mail; 52 questionnaires were sent and 28 were received filled in. The period of the data taking was from 19 to 29 October 2007.

Results of the research

In the following, we present major results of the research.

On the whole, respondents think that cross-border cooperations are advantageous for both parties since these contribute to the expansion of the employment knowledge of both the employees and the employers regarding cross-border employment, the expansion of the mobility of the labour force, the creation of a uniform labour market, the reinforcement of the Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary economy of the cross-border region, and, finally, to the improvement of the quality of life in the region. Prior to the accession to the European Union of Hungary, cross-border cooperations were characterised by the transfer of Austrian experiences and know-how and the creation of friendly relationships. Following the accession, the relationship became more intensive, and the cooperation of the two countries is characterised by target-orientation, appropriate structures and quality.

As to EURES-T partnership cooperations, expectations of respondents show an extremely positive picture. They think that the cooperation systematizes information provision, realizes cross-border employment exchanges, facilitates the recognition of qualifications and creates a common regional awareness within the population. Within the framework of the partnership, they think that the creation of job-seekers’ and job offering databases is feasible, allowing for quicker and more efficient organization in the case of labour exchanges, as well as for direct cooperation between labour centres, the gradual reduction of provisional restrictions and the establishment of good business relationships. Furthermore, they see that the awareness of the mentality and habits of partner countries will generate a strong cultural link between the two countries.

The majority of the respondents would like to participate in the EURES-T partnership. Respondents expressed their participation intention along a scale between 1 to 5 where 1 stood for “I am sure I would not participate”, while 5 for “I am sure I would participate in the partnership”. The result is an average of 4.38 which leads to the conclusion that the willingness to participate in the partnership is high among respondents.

As regards the mobility of the labour force between the two countries, we assessed aspects arising during employment regarding their applicability to Hungarian and Austrian employees. From among aspects arising during the employment of employees living in settlements along the Hungarian–Austrian border, we found that the most appropriate were the school education and language skills of Hungarian employees, common identity awareness of the two countries, mobility willingness of employees, the number of border-crossings and the B2B relationships of the two countries as indicated by the respondents. As to the age of the employees, the administration burden related to employment, the structure of the labour market, the comparability of the training system, getting information regarding employment and the capacity of border-crossings, these were regarded as less appropriate aspects for the cross-border employment of Hungarian employees. The assessment of Austrian employees is similar to Hungarian employees for most of the aspects, except for the mobility willingness and language skills of employees which were regarded as less appropriate and access to information on employment which were regarded as more appropriate.

Respondents think that the solution of problematic aspects related to the mobility of the labour force shall be contributed by the EURES-T partnership cooperation by facilitating the further development of the legal counselling system which has been operational on the Austrian side for years, and the building of the system on the Hungarian side, the expansion of counselling for employers on the establishment and operation of businesses and the provision of services. Furthermore, by the comparison of the contents and the description of qualifications, the partnership shall facilitate the finding and exchange of proper labour force between the two countries.

EMPIRICA, February 2008 68 5.4. Summary

According to preliminary analyses (Chapters 1 to 5.2), it is clear that the establishment of an EURES-T partnership in the Austrian-Hungarian border region is reasonable and justified, and the establishment may be a very useful initiative for the future for the stakeholders of the labour markets of both countries.

• As regards its territory, the size of the population and the number of commuters, the planned extension of the partnership corresponds to the average sizes of already existing partnerships. • The region has extensive cross-border economic and trade relationships. • The economic activity of enterprises is strong, and their cross-border relation system is well-established, and although the level of cooperation is not yet appropriate, initiatives have been launched to accelerate this. • Despite the restriction of the free movement of the labour force, a higher level of cross-border mobility is to be perceived as regards employment compared to already operational partnerships. • Cross-border transport infrastructure, although with some deficiencies, does not have basic constraints against cross-border employment. The infrastructure expands continuously, and its modernisation is on the agenda in both countries. • The major factor preventing mobility in the region is the restriction of the free movement of the labour force which, following facilitation planned for 2009, shall be fully withdrawn by 01.05.2011 at the latest. Despite the retained restrictions, it is probable that the annual Hungarian quota granted employment permits in Austria shall increase continuously and it shall generate an ever-growing demand for the information provision activities of the EURES-T partnership to be established in the future. • In the region, there are active demands as regards counselling and information provision on the cross-border labour market. • Now there are a lot of already existing cross-border organisational or project structures in the region which supplements and promotes the operation of the EURES-T partnership.

5.5. Project proposals before the full opening of the labour market

Table 27: Project proposals before the full opening of the labour market Nr. Key priorities Possible projects for the Austrian-Hungarian EURES-T partnership 1. Promotion of integration of EURES • Compilation of information material labour organisations in the whole • Exchange training of the staff of labour centres with partner organisations territory of the EU. • The launch of training programmes, especially on managerial level 2. Significant improvement in the • The collection and publication of information about the opening of the labour market and the provision of information as regards freedom of the provision of already existing services and the establishment of branches labour market mobility and the legal • The regularly updated presentation of the living conditions and working conditions of the background of free employment. neighbouring country The monitoring, and where possible, • Analysis of factors preventing mobility elimination and mitigation of factors preventing mobility. 3. The establishment of an active and • The information of employers on cross-border labour force-mobility, provisional regulations, good relationship and contact with the free provision of services, training systems both as regards Austria and Hungary employers, supporting them in • The organisation of job fairs transnational labour force • The organisation of traineeships and traineeship exchange programmes recruitment. 4. The determination of the • The compilation and publication of major labour market data on both sides of the border, and deficiencies and problems of the the regular updating of these labour market which might occur • The surveying and presentation of the deficiencies and overlaps of the labour market during cross-border employment, • The presentation of the differences between training contents of neighbouring country and the establishment and coordination of corresponding counselling and supporting measures. 5. The establishment and supporting of • The basic task of the partnership a common labour market along the border 6. The quantitative and qualitative • Annual evaluation of project results assessment of the results achieved of the EURES-T partnership and the continuous monitoring of the Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

activities 7. Publicity: the information of social • The establishment of a PR working team for the elaboration and realisation of a uniform PR partners and other major partners concept regarding the EURES-T partnership • The preparation of a logo, a website and advertisement material in the proper way

EMPIRICA, February 2008 71 6. Organisational Implementation

6.1 Fundamental considerations Aware of the initial difficulties which exist in the establishment of complex networks such as EURES partnerships, the authors of this study advise putting greater emphasis in this study on the question of how to go about creating a EURES-T Partnership in the Austrian- Hungarian cross-border region rather than on whether or not it should be created in the first place. Indeed, the question of whether it makes sense and is advisable to establish a EURES-T Austrian-Hungarian partnership is more of a philosophical question than anything else. And this not only when one considers that already in 2007 – this means in a moment when it is expected that it need to more years to have full free movement of labour – there were more cross-border commuters like in most other already existing EURES cross-border partnerships. In the preceding Chapters 2-3, with due brevity, it has been sufficiently demonstrated that the Austrian-Hungarian region is truly predestined for a EURES-T partnership. Chapter 6 will have as its focus the operational implementation of such a partnership. Accordingly, all aspects of organisation and financing, as well as the main focus of future activities, will be discussed in complete detail. These will then be summarised in a Draft Contract for a Framework Agreement to be found in the Annex. In many (although not in all) cases, the recommendations for solutions which are presented have already been discussed with and agreed upon by the partners. In some cases, these recommendations were developed by the partners themselves, while in other cases they were “academically” developed by the authors, who, in their opinion, have striven to appropriately consider the specific conditions within the EURES-T Pannonia Cross-border Partnership. The Draft Contract of the Framework Agreement is based upon the “Handbook of the Commission: EURES – European Employment Services”, released in March 2005. Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

6.2 Partners and regions In the creation of the “EURES-T Pannonia Cross-border Partnership”, the authors of this study recommend including partner organisations from the following regions:

The Republic of Hungary The Republic of Austria

County Gy ır-Moson-Sopron Burgenland Sopron-Fert ıd, Kapuvár, Csorna, Gy ır, Oberpullendorf, Eisenstadt, Mattersburg, Neusiedl, Mosonmagyaróvár Oberwart, Stegersbach, Jennersdorf County Vas Lower Austria Celldömölk, Csepreg, K ıszeg, Körmend, Berndorf, Wiener Neustadt, Neunkirchen, Baden, Szentgotthárd, Szombathely, Sárvár, Vasvár, Bruck/Leitha, Mödling, Schwechat İriszentpéter County Zala Styria Zalaegerszeg, Zalaszentgrót, Keszthely-Hévíz, Feldbach, Fürstenfeld, Hartberg Nagykanizsa, Letenye, Lenti

From the authors’ standpoint, the integration of further Hungarian or Austrian bordering regions does not seem to make sense at the present time, whereas the above mentioned territories appear to be proper for establishing an independent cross-border partnership. The following organisations are currently involved in the creation of the “EURES-T Pannonia Cross-border Partnership” and should therefore become partners in this cross-border partnership:

Public employment services • Public Employment Service Hungary (Állami Foglalkoztatási Szolgálat); • Regional Employment Service of Western-Transdanubia (Nyugat-Dunántúli Regionális Munkaügyi Központ); • Public Employment Service Austria (Arbeitsmarktservice Österreich); • Public Employment Service – Burgenland (Arbeitsmarktservice Burgenland); • Public Employment Service – Lower Austria (Arbeitsmarktservice Niederösterreich); • Public Employment Service – Styria (Arbeitsmarktservice Steiermark);

Councils of Trade Unions • National Confederation of Hungarian Trade Unions, Budapest and Szombathely (Magyar Szakszervezetek Országos Szövetsége, MSZOSZ); • Confederation of Unions of Professionals (Értelmiségi Szakszervezeti Tömörülés – ÉSZT); • Democratic League of Free Trade Unions (“LIGA" Szakszervezet);

• Austrian Trade Union Federation, Group Burgenland (ÖGB Burgenland); • Chamber of Labour Lower Austria (Arbeiterkammer Niederösterreich) ; • Chamber of Labour Burgenland (Arbeiterkammer Burgenland) ;

Employer Associations • Confederation of Hungarian Employers and Industrialist (Munkaadók és Gyáriparosok Országos Szövetsége); • Association of Employers of the Agricultural Field (Agrármunkaadói Szövetség); • Hungarian Industrial Association (Magyar Iparszövetség - OKISZ); • Economic Chamber of Lower Austria (Wirtschaftskammer Niederösterreich); • Federation of Austrian Industry, Regional Group Burgenland (Industriellenvereinigung Burgenland);

EMPIRICA, February 2008 73 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

In addition to these associations, the partnership should be open to additional organisations which are involved with labour market, especially to further employer organisations. 6.3 Significance and length of validity of the Framework Agreement

The Framework Agreement is the document which is signed by all partners and which specifies the goals and organisational structures of the EURES-T partnership. By signing the agreement, partners commit themselves to take part in the activities of the cross-border partnership and to make the EURES services available to the public whom the partnership is intended to serve, in a spirit of co-operation with the other signers. This agreement is valid for a minimum of 3 years and can be revised, augmented, and renewed. The authors of this feasibility study recommend that the Framework Agreement goes into effect upon signing and that it remains valid during the time period of three complete EURES fiscal years. It is important to note here that the EURES fiscal year is not identical to the calendar year, but begins on April 1 and ends on March 31 of the following year. 18 Thus, assuming that the contracts are signed in Mai 2008, the period of validity for the “EURES-T Pannonia Cross- border Partnership” would go into effect for the remainder of the 2008/09 fiscal year (during which it would not be possible to realise EURES-activities) and end after the three following full fiscal years have been completed (2009/10, 2010/11, 2011/12), on March 31, 2012. If the “EURES-T Pannonia Cross-border Partnership” is to be extended, it is necessary that the partners notify one another to discuss the extension and potential changes in the Framework Agreement as early as possible. The modification of the Framework Agreement has to be approved by the partners unanimously. Therefore the authors of this study recommend that the partners should agree at least three months before the validity period of the existing Framework Agreement expires concerning a potential extension of the partnership. Naturally, every member partner of a EURES-T partnership also has the right to withdraw from the partnership. Due to the co-operative approach of activity planning and implementation, however, this should only be possible in the case of serious differences of opinion within the Steering Committee with regard to a particular strategy which is to be followed or measures which are to be implemented. In addition, it must be guaranteed that all activities of the current fiscal year which are co-financed by the EU are able to be completed. Therefore, it should not be possible for a partner to terminate its co-operation in the partnership before the end of a given fiscal year and the partner must be required to deliver a written explanatory statement of its withdrawal at least six months before the end of the fiscal year. Corresponding recommendations for the formulation of such a statement can be found in Article 10, Paragraph 1 of the Framework Agreement Draft.

If it should occur that a significant number of partners choose to end their participation in the EURES-T partnership, the partnership would then lose its organisational foundation. Therefore, in Article 10, Paragraph 2 of the Framework Agreement Draft, the authors of this study recommend that if half of the signing partner organisations withdraw from the EURES-T partnership, the Framework Agreement is to lose its validity and the partnership is to be dissolved. Furthermore, the membership of public employment services from the Republic of Hungary and the Republic of Austria is required in any case for the continued existence of the EURES-T partnership. If the EURES-T partnership were to be dissolved, the members of the Steering Committee, the Co-ordinator and the Trustee would remain responsible, in accordance with the regulations, to guarantee a proper handling of the outstanding financial transfers with the EURESco during the fiscal year in progress.

18 It is also possible for the EURES-T partners to choose the calendar year as their fiscal year. However, for organisational reasons which will not be discussed in depth at this point, the authors advise against this and recommend the adoption of the fiscal year from April 1 to March 31 for the “EURES-T Pannonia Cross-border Partnership”.

EMPIRICA, February 2008 74 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

6.4 Organs of the EURES-T partnership

In the Framework Agreement, the partners define the basic organisational structures and the procedures for decision-making, in accordance with the guidelines provided by the EURES network for the organisation of EURES-T partnerships. Figure 7 illustrates in diagram form the structures and processes which are to be observed by the partners in the development of their partnership.

6.4.1 The Steering Committee

6.4.1.1 Definition and tasks of the Steering Committee

The Steering Committee is the central decision-making body of every EURES-T partnership. The Steering Committee: • defines the guidelines and the strategy of the partnership, taking into consideration the objectives and priorities which have been laid down by the EURESco for the entire EURES-T network. • approves an annual activity and finance plan, which must reflect the objectives and priorities defined by the EURESco. • determines the modalities and the partners who are to be entrusted with the carrying out of the individual activities. • approves the interim and final reports, as well as accounting statements regarding the implementation of the activity plans before they are submitted to the EURESco. • guarantees the cohesion of the partnership as a whole, particularly with regard to the activity plans which are to be carried out. • ensures an effective on-going monitoring and assessment of the activities and provides a regular overview of the results.

6.4.1.2 Members of the Steering Committee

The composition of the Steering Committee must not only guarantee that the partners are represented in a balanced ratio, but must also ensure that work can be done effectively. The Steering Committee is made up of: • Full members with voting rights; their right to vote is transferable to another person, who may represent them when they are unable to attend a meeting; • Those with observer status, who are allowed to take part in consultations and discussions, but do not have the right to vote. In order to enable work to be carried out effectively, experience has shown that the number of full members on the Steering Committee should not exceed 12 persons. In addition, it is important that the composition of the Steering Committee guarantees that all types of partners are sufficiently represented, so that a balance of power exists.

EMPIRICA, February 2008 75 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Figure 7: Basic Organisational Structure of the „EURES-T Pannonia Cross-border Partnership”

Co-ordinator Chairman of the Steering Trustee Working Gropus Committee

elects establishes

Steering Committee

National Public Full members Observers Employment (with voting (no voting EU Services rights) rights) Commission send send representatives representatives

send representatives

Partner organisations of EURES Pannonia

EMPIRICA, February 2008 76 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Table 28: Distribution of seats on the Steering Committee Partner regions Groups of partner organisations Republic of Hungary Republic of Austria

Public Employment Service 1 Seat Hungary Employment Service Austria 1 Seat Regional Employment Service 1 Seat West Transdanubia (counties Gy ır-Moson-Sopron, Vas and Zala together) Employment Services 1 Seat Burgenland, Lower Austria and Styria together National EURES Leaders 1 Seat 1 Seat Employer Organisations 1 Seat 1 Seat Employer Organisations 1 Seat 1 Seat

Within the following groups of partner organisations

• Regional Employment Service West Transdanubie (counties Gy ır-Moson- Sopron, Vas and Zala together); • Employment Services (AMS) Burgenland, Lower Austria and Styria together; • Employee organisation; • Employer organisation always the respective partner organisations of both partner regions decide autonomously whom they will send as a full representative to the Steering Committee. They can either choose one common representative, or they may dispatch several representatives from their own partner region, who then share the voting right for their region.

Example: AMS Burgenland, Lower Austria and Styria can send together a representative to represent their interests as a full member of the Steering Committee. However they can also send two representatives, whereby each representative would have only half of a vote.

If a partner region is not represented in one of the aforementioned groups, then this group does not send a full representative to the Steering Group for the partner region in question.

Example: If no employer association from the Republic of Hungary joins the partnership then the employer organisation group would only have one seat in the Steering Committee and the Steering Committee would only be made up of 9 full members in this case. n order to guarantee the greatest possible transparency and effectiveness in Steering Committee meetings, every partner organisation that does not dispatch a full representative should have the opportunity to send one observer. In this way, it is ensured that the opinions and experiences of all partners are taken into account in the decision-making processes of the most important committee of the partnership. In addition, one representative of EURESco must be invited to the meetings.

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6.4.1.3 Chairperson

The Steering Committee designates a Chairperson from among its ranks, as well as a deputy Chairperson. The Chairperson represents the EURES-T partnership to the public, he or she prepares the meetings of the Steering Committee in cooperation with the Co- ordinator and the partners, sends out invitations for the meetings and also leads these meetings. In its procedural rules, the Steering Committee can entrust the chairperson with additional tasks. The Chairperson must be a representative of one of the organisations that have signed the Framework Agreement. The Co-ordinator is not allowed to hold the office of Chairperson. It is at the partners’ discretion to prescribe in the Framework Agreement the length of the Steering Committee Chairperson’s term of office and how often re-election may take place. In order to ensure that the work of the partnership can be carried out continuously, it would seem advisable to set the Chairperson’s term of office to coincide with the validity period of the Framework Agreement. In principle, the Steering Committee is free with regard to the election of its Chairperson. However, the Committee should take into account the allocation of both the Trustee position (see Chapter 6.4.4) and the Co-ordinator position (see Chapter 6.4.3), both of which also need to take place. In the interest of a partnership administration based upon equal representation, particular attention should be paid to ensuring that, if possible, these three positions should not be filled by representatives from only one of the participating states. The seat of the deputy Chairperson can also be taken by the delegate of the Trustee, but this is not obligatory.

6.4.1.4 Decision-making and voting procedures

The Steering Committee should convene at least twice a year, with the Steering Committee itself determining the interval between meetings. The invitation calling for a meeting, as well as the corresponding list of items on the agenda, must be submitted to the full members and the observers at least two weeks before the meeting is to take place. Generally speaking, decisions of the Steering Committee are to be reached by consensus. The modalities for the voting procedures must either be regulated in the Framework Agreement or in the procedural rules of the Committee. The Framework Agreement Draft, provided as a specimen in the Annex to this study, contains the following regulations (Article 5) as recommendations:

• The Steering Committee is quorate if more than half of the full members are present. • In addition to the full members of the Steering Committee, the Co-ordinator and the representative of EURESco have the right to make proposals. • The Steering Committee always passes decisions based on a ¾ majority, particularly on - the admission of new partner organisations - the extension of the EURES-T partnership to include other regions - working out the 3-years-activity plan - accepting the annual budget and the request for subsidy, on which it is based - the procedural rules of the Steering Committee. - electing the Chairperson of the Steering Committee, as well as the deputy Chairperson - appointing the organisation which is in charge for financial representation (to assign the Trustee) - delegating or dismissal of the Co-ordinator.

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The following decisions, passed based on a ¾ majority are confirmed on behalf of the Steering Committee only if neither AMS Austria nor Public Employment Service Hungary appeals against: - deciding on the several activities - working out the 3-years-activity plan - accepting the annual budget and the request for subsidy, on which it is based - electing the Chair - appointing the organisation which is in charge for financial representation (to assign the Trustee) - delegating or dismissal of the Co-ordinator.

6.4.2 Working Groups

Fundamentally, in organising the development and carrying out of various activities, especially within a large region such as that covered by the “EURES-T Pannonia Cross- border Partnership”, the implementation of working groups truly makes the most sense. These groups can either be organised geographically, in which case the partnership region would be divided into subregions, or topically, based upon areas of professional competence. In any case, it is the task of the Steering Committee to pass resolutions regarding the establishment of working groups. In these resolutions, the Committee is to decide • the composition of the working group • its specific tasks • the timeframe in which these activities are to be completed. In the specific case of the “EURES-T Pannonia Cross-border Partnership”, the authors recommend avoiding a geographical division of the partners involved since it is extremely difficult to decide upon the geographical “interfaces” of potential subregions, as these subregions are not as obvious as in other regions (altering NUTS-levels). Based on past experience, the organisation of working groups according to specialised areas of competence has proven effective, as soon as partners seeking to collaborate concretely on a specific activity. These activities can have an ad-hoc character or be on- going in nature. An example of the latter would be a Public Relations working group, whose task would be to develop a PR strategy for the entire partnership, to work out CI and CD guidelines, to commission and oversee the production of advertising materials, etc. Assuming that the Steering Committee would approve the establishment of such a working group, the group would then act on behalf of the entire partnership, with the power to administer its own budget, which has been designated for its area of activity. Every partner organisation is given the opportunity to participate within a working group. However, experience has shown that, as a rule, a low number of partners (3-4) is sufficient to manage such a task.

6.4.3 Co-ordination

The Steering Committee is to elect a Co-ordinator who, according to the general aims of the EURES-T network and the specific objectives prescribed for cross-border partnerships, is responsible for the following tasks: • promoting the cooperation of the partners and the joint activities, overcoming the obstacles of cooperation • helping the partners in dividing up the tasks among each other

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• helping the partners in planning the activities which are harmonizing with the accepted strategy • covering organisational and secretarial tasks of Steering Committee • summarizing of the monthly reports about the activities of the EURES-consultants • summarizing of the reports made by the EURES-consultants about mobility barriers • developing and implementing the system presenting the cross-border labour market, mainly based on statistical data • practical implementation of the promotional and communication plan of the partnership • quality management of promotional activities • helping the organisations which are in charge of the bookkeeping tasks in preparing the budget-plan • working out/reviewing the application for subsidy, which has to be filed with the Public Employment Service Hungary • supervision of implementing the budget plan and supervision of bookkeeping • preparing the yearly report of the partnership • supervising the quality of the final report and the closing statement which have to be filed by the partnership, further controlling if the related prescriptions of the EURESco are followed • steering the network of EURES-consultant of the cross-border region • promoting EURES among the direct supervisors of the EURES-consultants, further involving them into the activities of the network • keeping contacts with the central organisations of the partner organisations (meetings on international level) • participation on the meeting of co-ordinators on European level • keeping contacts with other regional partners and co-ordinators of the EURES network • cooperation with co-ordinators of other partnerships along the same border in order to analyse the summarized impact of their activities.

These tasks are considered basis tasks - in other words, EURESco expects that they will be carried out by a Co-ordinator as part of the normal functioning of his or her partnership. Nothing stands in the way of a Co-ordinator taking on additional responsibilities, but this will vary according the current stage of development of the specific partnership. In practice, the aforementioned Co-ordinator responsibilities are translated mainly into the following activities: • Preparation and execution of Steering Committee and working group meetings • Organisation of all reports (activity proposals, interim reports, accounting statements, final reports) • Organisation and moderation of the relationship between both the individual partners, on the one hand, and between the EU and the partner organisations, on the other hand. • Preparation of the activity plans, as well as their regular monitoring • Co-ordination and supervision of activity leaders within the context of activity development and implementation

The future co-ordinator has to have at least 3 years of experience in the fields of project management and labour market connected topics. Further expectations to be fulfilled: • university or college degree (or equal practical experience)

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• excellent communication skills in written and spoken • proper language skill in at least one of the main working languages of EURES (English, French, German), and in the languages spoken in the EURES-T partnership (in our case German and Hungarian) • PC-skills • knowledge of the institutions and networks of the related region which are relevant from the perspective of the partnership • experience in writing proposals and reports • excellent interpersonal skills.

The perfect candidate has gained experience in steering and implementing EU-programmes and/or cross-border programmes, has further an own car and is ready for travelling in the partnership-area and occasionally to work during extraordinary working hours.

There are three ways the Steering Committee may appoint the co-ordinator: 1. The Steering Committee may appoint any candidate of public employment service, who is fitting the criteria. The Steering Committee is organising a hearing for the candidate(s) and is deciding together with Public Employment Service about the appointment. the candidate selected this way is considered as representative of all partner organisations. 2. The Steering Committee may appoint a candidate who is already employed at one of the partner organisations. The Steering Committee is organising a hearing for the candidate(s) and is deciding together with Public Employment Service about the appointment. 3. The Steering Committee and the Public Employment Service are deciding by mutual agreement to find the right candidate by an open tender offer.

The appointment regularly happens in the following way: - The Steering Committee is establishing an Elections Committee, which is proceeding in the specified way that followed the list with the three candidates considered the best is going to be handed over to the Steering Committee. - The tender, containing the description of the job of Co-ordinator, the information on remuneration, working hours and other expectations are released through the channels used by public employment services and the partner organisations. - Based on the proposal filed by the Elections Committee the Steering Committee is deciding together with the EURES-representant of the Public Employment Service about the appointment. - The Elections Committee shall compile a list on the most capable candidates selected according to the CVs of the applicants and they are invited for an interview. - The Elections Committee shall hear selected applicants and then the list containing the most capable candidates by preference shall be submitted to the Steering Committee and the Public Employment Service.

A budget is made available by the Commission for the co-ordination of the EURES-T partnership. The Co-ordinator’s remuneration occurs by means of a separate project activity application drawn up for this purpose and which is integrated into the current EURES-T partnership’s activity plan, to be submitted to the Commission at the beginning of every fiscal year. The Co-ordinator’s work is not only monitored by the Steering Committee which has appointed him or her, but also by the Commission. The appointment of the Co-ordinator can be

EMPIRICA, February 2008 81 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary terminated by both parties namely latest till the 30 th June, by the end of the ongoing EURES fiscal year. The termination on behalf of the cross-border partnership is a related decision of the Steering Committee. The party who is terminating the appointment has to deliver proper reasons to the other party in written. The Co-ordinator represents, as it were, the hub of a complex human and organisational network. In order to set up and supervise such a network, a certain amount of time is necessary. For this reason, the term of office for which a Co-ordinator is elected should not be too short. Therefore, it is recommended that the Co-ordinator signs a contract for a maximum of three years. An extension or renewal of the contract should be only possible if the renewed appointment happens through a public tender. It might happen that the procedural rules of the Steering Committee and/or the Framework Agreement prescribe that the renewal of the appointment is only possible based on ballot vote and/or by 2/3 majority. Also the EURES manager in charge has to approve the renewal of the appointment. The larger a partnership is, the more urgent the recommendation that the Co-ordinator be neither directly nor indirectly associated with one of the signing partner organisations. He or she must possess the necessary independence and freedom of action in order to successfully carry out the role with which he or she has been entrusted – a role which is to benefit the partnership as a whole and which demands an impartial handling of each and every partner. This organisational neutrality always proves to be of particular importance within the context of conflict management. It is also advisable to make sure that the Co- ordinator or the Co-ordinator’s office is not indirectly dependent upon one of the participating partner organisations. An example of indirect dependency would be if the Co-ordinator would act as a contractor for the activities of a partner organisation to any considerable extent. In any case, the Co-ordinator should be engaged “in personam”, since the guidelines of the Commission explicitly assume that a natural person, and not a legal person or corporate body, is to be appointed as Co-ordinator. If a corporate body is being considered for the task of co-ordination, one individual natural person within the organisation must be engaged who is solely responsible for the carrying out of the task of co-ordination within the EURES-T framework

6.4.4 Trustee

Representing the EURES-T partnership, against the Commission one of the participating public employment service is taking responsibility. In our case the Hungarian Public Employment Service is taking this role for the coming 3 EURES fiscal years. Concerning the further fiscal years the partner organisations have to make an appointment about their representation against the Commission on good time. In case that another public employment service will be appointed, the Framework Agreement has to be modified. Public Employment Service Hungary is filing the plan on subsidy which is approved by the Steering Committee, as a part of the national subsidy plan with the Commission, signing the financial agreements which are going to be concluded with the Commission and is further receiving the subsidies transferred in favour of the partnership based on these agreements. During the execution of the actions which are necessary connected to the applications on yearly subsidies Public Employment Service Hungary is taking over the handling of subsidies and their disbursement to the partner organisations which are responsible for the several projects. The cross-border partnership is allowed to transfer this task on a partner organisation appointed by the Steering Committee. In this case the latter will be the Trustee.

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6.5 Financing and budget

The yearly activity plan includes an annual budget made up of subsidies from the Commission as well as contributions from the individual partners in the form of personnel costs, administrative costs and operating expenses. The granting of subsidies takes place by means of a financial agreement between the Commission and the partnership. In this agreement, the party to the contract who represents the partnership is the Trustee appointed by the Steering Committee. The partner organisations which are responsible for the diverse projects are filing the costs and expenses coming up during the implementation of the project through the Co-ordinator with the public employment service in charge and the Trustee. The Co-ordinator preliminary makes sure they are correct in terms of form and content, further if these are in line with the application for subsidy of the project. After finishing this he or she forwards the accounts to the public employment service in charge and the Trustee. The cost and expenses are settled by the public employment service in charge and the Trustee only after they have received the necessary financial resources from the Commission. The partner organisations in charge with the several projects have no right to claim the pre-financing of their costs and expenses on behalf of the public employment service in charge. The partner organisations which are in charge of the several projects are accountable to the public employment service in charge and the Trustee both related to the content and the numerical aspects, further they have to take over separate warranty for the following: • faults during the implementation of the project and the fulfilment of orders (especially keeping the regulations related to tenders and transfers) • for cases when the Commission notices the fact that in case of several budgetary items there have been cost and expenses in the accounts which are not allowed to do so (in case of activities, which have been realised by the partner organisations on their own or when they have ordered these from third parties).

If there are organisations in charge for the projects which are no legal entities, in case of doubt the concerned supervising legal entity can be made accountable. Filing project applications are only necessary further financing and implementing is only possible if the question of accountability has been clarified and documented doubtless. All organisations in charge for projects have to keep the rules and regulations related to accountings and reporting which are recorded by the public employment service in charge. Should it happen that the deadlines or procedures are not kept, the replacement of costs can be reduced or stopped, further they can be obliged to paying back formerly reimbursed costs. The several organisations in charge for the projects are ready to transfer formerly reimbursed cost, which are to be recharged within 14 working days to the public employment service in charge and the Trustee. About each and every project there has to be prepared a correct documentation which has to be kept as long as prescribed in the accounting rules of the Commission. During monitoring which eventually take place these are to be presented to the control organisation without delay and completely.

The relationship between the Commission, the public employment service and the Trustee with regard to the financial management of the partnership, as well as the individual procedural steps in activity development and implementation are illustrated schematically in Figure 8.

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Figure 8: Activity development and implementation within “EURES-T Pannonia Cross-border Partnership”

Partner organisations of EURES-T Pannonia

Upon Co-ordinator’s approval, Submit Trustee transfers payments receipts

Public AFSZ allocates Employment budget to Trustee Service Cooordinato r Trustee Hungary

Checks receipts and They conclude a financial approves payment agreement EURESco

Source: own Figure

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6.6 EURES-T advisers

The EURES-T advisers are the labour market and labour law experts in the EEA. After completing the appropriate training under the patronage of EURESco, they work within the framework of EURES-T partner organisations. The tasks of the EURES-T advisers are described in Decision 93/569/EEC of the Commission. Their focus is on the performance of three essential services: information, consultation and assistance in the area of job recruitment. EURES-T advisers work both on the national level as well as on the cross-border level within their respective organisations and with those offices responsible for dealing with issues of employment or professional training. They are in direct contact with employees and employers, in other words with the potential users of the EURES-T network. The difference between the cross-border EURES-T advisers (those who are working within the context of an EURES-T cross-border partnership) and those EURES advisers working on the trans-national level is that cross-border EURES-T advisers are required to deal more intensively with issues of cross-border living and working conditions, as well as with cross- border job opportunities. In addition, EURES-T advisers working on the cross-border level must be able to pass on information concerning cross-border professional training, particularly with regard to regional training course opportunities and the kind of implications taking part in a course on the other side of the border may have. Naturally, the cross-border EURES-T advisers, especially those of public employment services, must also be able to answer any questions regarding trans-national mobility.

A EURES-T partnership communicates to EURESco the number of candidates it would like to recommend to receive basic training as an EURES-T adviser. These recommendations must take into account the geographical scope of the partnership as well as the main axes regarding cross-border commuter flows. The following prerequisites must be taken into consideration in the selection of candidates to receive basic training as EURES-T advisers: • Potential candidates must live in cities which are located near the border and which have a sufficient population. • They must have sufficient and suitable professional experience for EURES-T. • They must possess sufficient EDP skills on the user level. • They must have a good command of at least the Community languages spoken in the other regions of their partnership. If only one language is spoken throughout an entire partnership region, the candidate must be fluent in one additional Community language. Due to practical reasons, fluency in English or French is indispensable . • Supervisors of candidates must commit themselves to allowing candidates to spend at least 50% of their job time working for EURES-T (including both consultation and support activities), as well as permitting the candidate to be active as an EURES-T adviser for a minimum of three years, barring an act of God. • The new EURES-T adviser positions which are applied for must be justified, taking into consideration the number of EURES-T advisers already working in the cross- border region, their geographical distribution (especially with regard to the most significant cross-border commuter flows) and the type of organisations to which they belong.

Furthermore, in the case of newly established partnerships, the number of persons to be trained as EURES-T advisers who belong to a type of partner organisation other than the public employment services (i.e. unions, employer associations, etc) may not exceed the number of regions participating in the partnership in the first year. In comparing the regional

EMPIRICA, February 2008 85 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary structures of the Austrian-Hungarian cross-border region with those of existing EURES-T partnerships, one can conclude that approximately 6 EURES-T advisers would be recommendable for the “EURES-T Pannonia Cross-border Partnership”, which means 3 on each side of the border.

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6.7 Cooperation with other EURES-T structures

In many respects, co-operation between the “EURES-T Pannonia Cross-border Partnership” and other EURES-T structures makes a great deal of sense. Especially during the initial phase of establishing a partnership, it is expedient to work with all EURES-T cross-border partnerships where similar structures and conditions exist. A transfer of know-how on the organisational level not only makes sense, but is urgently recommended.

During at least the first two years, the Co-ordination Office, the Trustee and the Steering Committee Chairperson should receive advice regarding the important operational and administrative aspects involved in the creation of a EURES-T partnership. This should take place in the form of a “sponsorship” performed by at least one EURES-T cross-border partnership which has already been functioning for a longer period of time.

The cooperation is especially important with organisations like IGR (Interregional Unions Council) which have outstanding success. There are lots of information, studies, brochures about life and labour conditions in Hungary and Austria, which can be very useful.

With regard to the development of its own Internet presentation structure, a must for every EURES-T partnership, it would be possible to copy quite a bit from other partnerships or to at least gain helpful suggestions (for example Øresund, TransTirolia). The EURESco framework prescriptions on designing EURES homepages naturally govern these as well. Designated EURES-T advisers who are to receive their training in 2008 or 2009, as well as their assistants, should receive “pre-training” before they begin their main training. It would make sense here to work together with the representatives and the coordination offices of the Bavarian-Czech or the Hungarian-Slovak (Danubius) border region, since these partnerships must also organise such pre-training courses for their designated EURES-T advisers during the same time period.

Finally, it is always recommendable to initiate co-operative efforts in the area of financing whenever it is apparent that the finances required for a particular activity would exceed the capabilities of a EURES-T structure and/or when the activity’s results would be of equal significance for all EURES-T partnerships involved.

Related to the “EURES-T Pannonia Cross-border Partnership” the biggest advantages will result of the experiences which the Austrian partner organisations have gained in the field of EURES-T, that means the EURES-T partnerships Interalp, TransTirolia, or Bodensee. With the help of such partners as these, who have gathered much experience in the EURES-T network, a systematic transfer of know-how and the realisation of joint activities should be significantly easier to achieve.

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6.8 Time schedule

Those partners interested in the establishment of “EURES-T Pannonia Cross-border Partnership” should strive to sign the Framework Agreement as soon as possible. In doing so, the chance still remains to submit an activity plan for the remaining 2008/09 fiscal year. This is both desirable and makes sense, since the organisational and infrastructural costs incurred during the initial phase of establishing a EURES-T partnership are both necessary and extremely expensive. At the same time, without these advance infrastructural efforts, no services can be performed for employers, employees and other target groups. The time schedule outlined in the following table has been put together based upon this.

Table 29: Time schedule for the establishment of “EURES-T Pannonia Cross-border Partnership” Month Action Explanation May 2008 Signing of the The Framework Agreement can be signed by all Framework participating partner organisations during an official Agreement event. May 2008 Designation of the The regional partner organisations designate their members of the representatives for the Steering Committee in Steering Committee accordance with the pattern of distribution prescribed in the Framework Agreement. Regional elections may be held for this purpose, or representatives may be named by means of a written circulation procedure. Due to the limited time available, the latter is to be recommended. The minutes of election meetings or the file notes in the case of a written circulation procedure are to be sent to the designated Chairperson of the Steering Committee. May 2008 Constituent meeting During the constituent meeting of the Steering of the Steering Committee, the Chairperson of the Steering Committee Committee, is elected, further the public employment service in establishing the charge and the Trustee are appointed. Besides of that Election Committee an Election Committee needs to be established, having which is handling the the role to prepare the appointment of the Co- appointment of Co- ordinator. ordinator

First regular meeting In the first regular meeting of the Steering Committee, of the Steering procedural rules are decided upon, provided that they Committee are necessary and requested. June/July 2008 Appointing the Co- The Co-ordinator will be appointed by the Steering ordinator Committee. Optional: Defining the Drafting of the projects scheduled for the fragment projects for the fiscal year 2008/09, appointing the project managers. fragment fiscal year The application will be send to EURESco on behalf of 2008/09 the concerned national employment service, with a petition for a special procedure. November 2008 Completion, adoption Under the supervision of the Co-ordinator, those and submission of the partners who have been designated to manage 2009/10 activity plan activities draw up their activity proposals and budget calculations. Based on these documents, the Co-

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ordinator composes the yearly activity plan which is going to be presented to the Steering Committee, which adopts the plan. Working groups (organised according to subregions or areas of specific competence) are set up. The public employment service in charge submits the yearly application for subsidy to EURESco. Latest April 2009 Approval of the EURESco examines and approves the activity plan activity plan and sends the finance agreement to the public employment service in charge for signing. Up from April 2009 Starting the project No later than 60 days after the signing of the finance agreement, the first tranche of the EU subsidies is Remittance of the first remitted. The individual activities may already be subsidy payment started in November/December 2008, as soon as the activity plan has been approved by EURESco. In this case, however, the partners must pre-finance activity expenditures in part.

Before the first constituent meeting of the steering Committee takes place, several co- ordinating tasks must be undertaken. The authors recommend that these tasks be taken on by the designated Chairperson of the Steering Committee. The Chairperson’s primary tasks during this transition period would be to organise the signing of the Framework Agreement contracts and the appointing of the members of the Steering Committee. In particular, he or she must make sure that potential partner organisations which were not involved - or only partially involved in the preparatory work for the “EURES-T Pannonia Cross-border Partnership” - are sufficiently informed about the project and its framework parameters.

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6.9 Summary

The essential organisational aspects in the creation of the “EURES-T Pannonia Cross- border Partnership” are summarised in the following overview:

Steering Committee The Steering Committee is made up of a maximum of 10 full members with the right to vote: the Hungarian Public Employment Service and AMS Austria is delegating each one representative, the Regional Employment Service West Transdanubia is delegating one, further AMS Burgenland, Lower-Austria and Styria one common representative, both national EURES representatives send each one person, the Austrian and the Hungarian employer organisations have each one seat, same like employee organisations.

Co-ordination The constituent meeting of the Steering Committee is establishing an Election Committee which is preparing procedure on appointing the Co- ordinator Representation at the The “EURES-T Pannonia Cross-border Partnership” will be represented at Commission the Commission in the first three years by the Public Employment Service Hungary. Regarding the following fiscal years the partner organisations have to make an appointment about their representation at the Commission in good time. Trustee The potential partners make an agreement in the preparation phase which organisation may be considered for this position. Financing and budget The “EURES-T Pannonia Cross-border Partnership” is financed from subsidies from the EU, as well as contributions made by individual partners. The carrying out of all the financial management aspects with regard to the activities outlined in the activity plan is to be guaranteed by the partner in charge of the activity, the Co-ordinator and the Trustee. Those partners entrusted with the management of activities submit bills for the costs incurred during activity implementation to the Trustee via the Co-ordinator. The Co-ordinator checks the bills to make sure they are correct in terms of form and content, upon which the Co-ordinator forwards them to the Trustee, who then reimburses the partners for their respective expenditures. The partners are directly accountable to the Commission and liable for the correctness of their accounting. EURES-T advisers Taking into consideration the population of the Austrian-Hungarian border region, as well as the number of cross-border commuters, approximately 6 EURES-T advisers would be a reasonable number for the “EURES-T Pannonia Cross-border Partnership”

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Attachment

EMPIRICA, February 2008 91 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Dear Madam / Sir,

We kindly ask for your cooperation to the study entitled “ Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary ” of the Empirica Gazdasági és Társadalomkutató Intézet Kft. in filling in the below questionnaire. The objective of the study is, among others that we know the opinion of your organisation as regards cross-border cooperations, EURES-T partnership and the mobility of the labour force with regard to territories of Eastern Austria and Western Hungary. Opinions provided for the questionnaire shall be treated confidentially and used for the above mentioned study only, without indicating names.

Please send back the filled questionnairee until 26 October 2007 (Friday) at the latest, electronically to the e-mail address [email protected] or by fax to +36.99.514505.

Thank you for your kind help.

Péter Csizmár Managing Director Empirica Gazdasági- és Társadalomkutató Intézet Kft.

QUESTIONNAIRE

PART I: EXISTING CROSS-BORDER COOPERATIONS AND THEIR CHARACTERISTICS

I/1. What, already operational, cross-border cooperations are known for you (professional, cultural, sports or anything else)? Please list some of these.

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I/2. Does your organization participate in any of the cooperations mentioned by you? Please

indicate your answer with an X.

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I/3. Please justify why you participate / do not participate in the cooperation?

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I/4. If you participate in the cooperation, what is the timely intensity of your participation ? How many days you spend by month with participating in the cooperation?

I/1. I/2. I/3. I/4. The name of Do you Justification for your participation / non- Intensity of the cross- participate in participation in the cooperation the border the participation cooperations cooperation? (in days per Yes No month)

I/5. To what extent can you agree with the following statements regarding cross-border cooperations? You can express your opinion along a scale between 1 to 5 where 1 stands for no agreement at all, while 5 for full agreement. You may shade your opinion with intermediate values. Please indicate your answer with an X. Please give reasons for your answer.

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Cross-border cooperations… Reasons for the answer Full agreement No No agreement at all

1 2 3 4 5 …intensify business relationships

…improve the presence of competition

…expand the market, that is, the demand

… reduce information deficits

…strengthen cultural relations …reduce prejudices

… reduce intercultural differences

…contribute to the improvement of the living standard

…contribute to the idea of the common living space

Other, please specify:

I/6. In your opinion, what effects cross-border cooperations have on relationships along the border? Please present your opinion in as many details as possible.

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I/7. Please evaluate the quality of the cross-border cooperation of the two countries (Hungary and Austria) with regard to your field of profession as relates to the period preceding the EU accession of Hungary. Please present your opinion in as many details as possible.

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I/8. Please evaluate the quality of the cross-border cooperation of the two countries (Hungary and Austria) with regard to your field of profession as relates to the period following the EU accession of Hungary. Please present your opinion in as many details as possible.

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I/9. Please evaluate the quality of the cross-border cooperation of the two countries (Hungary and Austria) with regard to your field of profession as relates to the forthcoming period (3 to 5 years). Please present your opinion in as many details as possible.

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EMPIRICA, February 2008 95 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

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PART II: ISSUES RELATED TO EURES-T PARTNERSHIP

II/1. According to your knowledge today, what do you think the essential elements of EURES-T partnership cooperation are? Please list them.

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II/2. What do you think the advantages of EURES-T partnership cooperation are? Please present your opinion in as many details as possible.

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II/3. What do you think the possible disadvantages of EURES-T partnership cooperation are? Please present your opinion in as many details as possible.

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EMPIRICA, February 2008 96 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

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II/4. What does your organization expect from the EURES-T partnership cooperation on the short and long term? Please present your opinion in as many details as possible.

Short-term expectations:......

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Long-term expectations :......

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II/5. What partnership tasks could your organization provide within the framework of the EURES-T cooperation? Please present your opinion in as many details as possible.

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II/6. To what extent your organization is willing to participate in EURES-T partnership? Please assess your possible participation intention along a scale between 1 to 5 where 1 stands for your being sure you would not participate”, while 5 for your being sure you would participate in

EMPIRICA, February 2008 97 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

the partnership. You may shade your opinion with intermediate values. Please indicate your answer with an X. Please give reasons for your answer.

You are sure you would You are sure you would not participate in the participate in the EURES- EURES-T partnership T partnership 1 2 3 4 5

Reasons for the answer: ......

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PART III: ISSUES RELATED TO THE MOBILITY OF THE LABOUR FORCE

III/1. What are the differences in your opinion facing a Hungarian employee living next to the border who wish to get employment in Austria? Please present your opinion in as many details as possible.

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III/2. What are the differences in your opinion facing an Austrian employee living next to the border who wish to get employment in Hungary? Please present your opinion in as many details as possible.

EMPIRICA, February 2008 98 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

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III/3. Is it possible, in your opinion, that the establishment of the Austrian-Hungarian EURES-T partnership cooperation could help in solving difficulties mentioned by you? If yes, why and if no, why? Please present your opinion in as many details as possible.

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III/4. And now please assess the following aspects according to the extent these help the employment of employees living in settlements along the Hungarian-Austrian border in the neighbouring country (regarding both Hungarian and Austrian employees) You can express your opinion along a scale between 1 to 5 where 1 stands for that it is not appropriate at all, while 5 for it being fully appropriate for the employment of cross-border labour force in the neighbouring country. You may shade your opinion with intermediate values. Please indicate your answer with an X.

at all at all at Fully Fully

appropriate appropriate Notappropriate Notappropriate

1 2 3 4 5 1 2 3 4 5 Relating to Hungarian Relating to Austrian employees employees School education of the employees Age of employees

EMPIRICA, February 2008 99 Feasibility study for the creation of a EURES cross-border partnership covering the regions between Eastern Austria and Western Hungary

Mobility willingness of employees Administration burden relating to

employment of employees Language skills of employees Structure of the labour market Comparability of the training system Access to information relating to

employment The number of border-crossings The capacity of border-crossings Transport infrastructure Historical links and common identity

between the two countries B2B links between the two countries Other features regarded as important by

you: Other features regarded as important by

you: Other features regarded as important by

you:

III/4. Should you have any more ideas to share which we have not asked in the questionnaire, please present them here:

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Thank you for your valuable help.

EMPIRICA, February 2008 100