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Free movement of persons

Gejtu Vella, Secretary General of the Union Haddiema Maghqudin, recently addressed the Malta Employers Association's Annual Conference. Mr Vella here divulges his views on Europe, particularly relevant considering Malta's union's questionable stances on EU accession. Following are extracts from his address

By Gejtu Vella

The European Community was primarily designed for economic purposes, social progress was, from the very beginning, at least indirectly one of its objectives, and the promotion of economic and social progress and the continuous improvement of living and working conditions have been important aspects of the European Union integration. Pursuing to the preamble to the EC Treaty the Community is "resolved to ensure the economic and social progress of their countries by common action to eliminate barriers which divide Europe". The social policy competencies for the European Community were very modest from the very beginning, because the Treaty of Rome limited them essentially for equal treatment for men and women in wages, to social security, for migrant workers and to the financial promotion of occupational and geographical mobility of labour within the scope of the European Social Fund.

Ever since 1957, the Treaty establishing the European Economic Community. then commonly known as the EEC, has contained provisions to ensure the free movement of workers within the Community. This right has become a reality as a result of various Community instruments. Today, all EU nationals may move freely within the European Union, as this right is part and parcel of European citizenship.

The right to freedom of movement of workers is today enshrined in all EU Member States. Iceland, Liechtenstein and Norway are also granted the right to stay in every other Member State for the purpose of employment and to remain their indefinitely. Freedom of movement entails the abolition of ally discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work. Migrant workers from Member States are to be treated on an equal footing with employees possessing the nationality of the respective country of employment, especially as regards working conditions and social security.

The differences in incomes as well as living standards in social protection between the Member States in the European Union are still considerable. There are widely different traditions with respect to the leading ideas and principles of social protection, in general, and with respect to social protection in old age, in particular. Different political decisions concerning the range of personal coverage by the system of social protection have been taken and different concepts of financing the system and of providing benefits and services were introduced. In view of this, social policy regulations will necessarily continue to have to differ between Member States. Therefore, it is questioned in some Member States, whether social policy regulatory competence's should be transferred to the European at all. On the other hand, it is often argued in favour of the harmonisation of social policy regulations that the existing differences distort competition and that so-called "social dumping" must be avoided. This kind of argument has a long history. It led for instance, to the establishment of the International Labour Organisation, and it has most recently found its way into the negotiations on the tasks for the World Trade Organisation.

There are four different aspects in which harmonisation rules may differ. First, they may do so in the degree to which they oblige Member States to adjust their national law in so far as: rules may be merely defined as objectives or programmes. Secondly, they may provide minimum standards which are to be meet by national law - minimal harmonisation. Thirdly, harmonisation can apply to different branches of social security, such as old age pension systems with respect to pensionable age or to invalidity pensions. Fourthly, harmonisation may consist of creating and independent social security system which persons can join and which forms a substitute for national social security schemes.

For free movement of persons to be applied in practice solutions must also be found to complex problems, such as asylum and immigration, crime, drugs and terrorism. These problems have become international in scale, none of them stops at national borders.

Having looked into the realities with regards to free movement of persons, I shall now share some thoughts with you.

There are two sides of the coin. On one side, the Euro-sceptics claim that free movement of persons will only bring about less opportunities and threats for the Maltese workers. Furthermore, they create concern and agitation amongst the workers and their families by highlighting that this tiny island will be invaded by Europeans who would prefer to work in Malta rather than in their homeland.

On the other side of the coin you would find the Euro-fanatics who claim that free movement of persons is a god sent to Malta. We would all have the opportunity to work abroad and gain valuable experience in different sectors. We would all turn out to be experts and what have you.

These are the two sides of the corn. Coming from the trade union movement I would dare state that both facets are more emotional than rational.

Let's look at some hard facts and figures. Trends clearly indicate that migration is Northward to richer countries. Malta being at the Southernmost part of the European Union, should not anticipate a sudden influx of EU nationals in our island. Furthermore, since an EU job seeker cannot stay for more than a short period of time in another Member State without finding a job, migration is barred by time even in a situation of free movement.

As far as migration to and from EU Member States is concerned, one realises how low migration actually is. Having said this, on the other hand, with the oncoming enlargement, the present EU Member States themselves also are currently speculating on the impact of enlargement on migration. However, this fear of migration is not new. It first existed when the original 6 Member States introduced tills freedom in 1968, when Italy was still a net emigration country, but the fear proved unjustified. The same was true with the accession of the then classical emigration country Ireland in 1973 and, again, when after few years of transition, Greece (1987), Spain and Portugal (1992) were granted free movement of persons. On average, less than two per cent of the entire workforce in EU countries come from another Member State - which again, confirms the general tendency not to move.

The current situation in Malta presently as far as foreign workers are concerned is the following. Just below 2000 non-Maltese citizens were in possession of a work permit on 31 October 2000, representing 1.32 per cent of the total labour force. (of 148,166). These include 108 from Germany and 350 from the United Kingdom. Most of these foreigners are highly skilled or professional workers. Therefore, although we are not members of the European Union, we do have a considerable amount of European Union citizens working in Malta.

Now that we have established some hard facts and figures let us delve into another area which is of significance when dealing with this subject of free movement of persons.

Let me now deal with the recognition of diplomas.

The European Union has set up a system for recognising diplomas and training that enables all EU citizens to make full use of their capabilities and skills in another EU country. The basic principle is that, if EU citizens are qualified to exercise a profession in their home country, they are qualified to exercise the same profession in any other EU country. A general system of recognition of qualifications that is applicable to most regulated professions has been put in place across the European Union. Teachers, lawyers, engineers and other professions which are regulated by qualifications in their homeland need to apply for recognition to work in another Member State. The authorities have four months in which to reply. If they consider that their training is significantly different, in terms of duration or content, from that given in the host country, they may be asked to obtain further professional experience completing their training or to take an aptitude test as may by required.

EU citizens may apply to study, train or do research anywhere in the Union, whether one goes to another EU country specifically for that purpose or whether one already lives there. Unemployed EU citizens may also go on an extensive training programme , which may also include work experience, in any European Union Member State. Most Member States are now operating a three or six month period, which is a reasonable period for unemployed persons to look for a job in any EU country. Drawing unemployment benefits in one Member State, EU citizens may continue to draw benefits from the same country for up to three months after they move to another Member State. These unemployment benefits are not paid by the host country but by the country where such person has worked last.

Working in another EU member state gives the right to reside in such state for a period of three months followed by a residence permit if the stay exceeds tile three month period.

Conditions of Employment - A worker should benefit from the same working conditions as nationals of the host country as far as pay, dismissal, re-employment and health and safety at the place of work These conditions also include gender equality as regards pay, vocational training, promotions and access to employment.

Reference is also made to Trade Union rights. Every worker has the right to join the trade union of his choice and to exercise his trade union rights. This leads me to the Social Security systems which are not harmonised but EU regulations aim to co-ordinate them. The basic aim is to ensure that every EU citizen is affiliated to a social protection scheme and that the person is insured. The worker is entitled to social security benefits covering sickness and maternity benefits, disability, old age and widows or widowers benefits. Benefits are also payable for accidents at work, occupational illness, death and unemployment and other family allowances.

Taxation is another provision which needs to be looked into as all EU citizens working in another Member State thereby transferring their residence to that member state becomes resident for tax purposes in such member state. The definition of fiscal residence varies from one member state to another. The person must comply with the laws of the country where he has established his residence. A person fiscally resident in a country must normally declare all his income.

Self employed EU citizens may opt for one of the two following options:

They may transfer their business to another European Member State or else set up a secondary base in another EU Member State. In both cases, they are subject to the same rules in conducting their business as applied to nationals of the country in which they are carrying out their business activities.

Finally a word regarding EU citizens on reaching retiring age. EU citizens working in another EU country are entitled to stay there provided either that they have reached retirement age and lived in the host Member state continuously for more than three years and have worked there for the last twelve months or that they are permanently incapable of work because of an accident sustained during their working life In this case, EU citizens may stay if they have been employed and living in the country for at least two years before being incapacitated.

Having gone through the motions of briefly highlighting the most important features of EU citizens relating to the free Movement of persons I shall now delve into another aspect which should be of concern to us all. We may experience a brain drain. The opportunities for work and to gain experience at the European level may be very enticing especially for the younger generation. On an individual basis this is certainly an opportunity for the locals to work abroad to gain experience and expertise but we have to ensure that this will not create a vacuum in certain posts. But then we would be the net beneficiaries if and when they return to Malta with expertise for the benefit of the locals.

To conclude free movement of persons is envisaged by the UHM as a reality. We believe that workers will only move from one country to another if they do believe that there is an opportunity for a better standard of living for themselves and their families. Having said this, this will immediately exclude that workers known as low skilled and with ancillary duties have nothing to fear of losing their jobs to EU nationals. On the other hand, professionals and highly skilled workers should continue to have their places of work guaranteed in Malta as long as we are able to sustain a national viable economy.

If I may say so I strongly urge our politicians to debate the EU issue from an economical and social point of view. Party politics should not interfere in this process which will eventually lead to the citizens of Malta to vote yes or no in the referendum. Debating objectively is necessary but at no stage should sacrifices be made for political parties agendas. Malta does not deserve this.

The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
Tel: (356) 382741-3, 382745-6 | Fax: (356) 385075 | e-mail: editorial@networkpublications.com.mt