Sharp jobless rise for applicants as Union total falls

Date: 05/07/01

By John Shelley

UNEMPLOYMENT is soaring in applicant countries against the trend in member states where the EU has been successful in creating jobs, a new European Commission paper reveals.

Social Affairs supremo Anna Diamantopoulou's annual Employment in Europe report, due to be published next week, says the number of employees in the EU grew by 1.8% in 2000, with 3 million more people in work than in 1999.

In the central and eastern European countries (CEECs) employment declined by 1.4%, or about 600,000 jobs.

In 1999 the figure was 1.3%. The figures are likely to be seized on by those who argue that enlargement, and the opening of the existing eastern borders, will flood the bloc with workers from the poorer applicant countries.

Delicate negotiations with the candidates on the length of transition periods before applicant workers are given full free-movement rights are currently underway.

In some countries the situation was even worse than the figures suggested, the report says, because a drop in the number of people available for work masked the size of the fall. "In Bulgaria, Latvia and Lithuania employment decline was accompanied by a reduction in the size of the labour force, but for which unemployment would have risen even more sharply last year," say the authors.

The Commission report concludes that the situation is likely to worsen before it gets better. The days of full employment under communist rule are long gone and the painful reforms necessary for the CEECs to transform themselves into modern market economies mean more job losses in agriculture and industry are inevitable, the report says.

Countries with a high dependence on farming are likely to suffer most. "Romania, Poland and Lithuania seem likely to face further significant declines in agricultural employment in the years ahead," the report states.

But the Commission does see light at the end of the tunnel, predicting that employment in the CEECs will stabilise in 2002. Hungary and Slovenia, the only two applicant countries in which employment increased in 2000, have already bucked the trend.

Overall unemployment in the candidate countries stood at an average of 12% for the CEECs in 2000, while unemployment fell in the EU to less than 9%. "The largest increases in unemployment were seen in Poland, Slovakia and Bulgaria," says the report. "These three countries, along with the Baltic countries, where unemployment also rose in 2000, now have unemployment rates of 14% or more."

The paper says the decline in employment comes despite signs of a recovery in economic growth. Having fallen from 3.5% in 1997 to 2.6% in 1998, gross domestic product growth in the CEECs overall slowed further to 2.2% in 1999. However growth in 2000 is estimated to have been 4%, with similar growth forecast for this year and next.

Compared with the applicant countries' problems the EU has fared well. Some 14.5 million EU citizens were registered unemployed in 2000, 1.5 million fewer than a year earlier. This was the largest fall for a decade. The employment rate in the bloc reached 63.3% in 2000, having risen by 3.3% since 1995. An overall employment growth of 1.1% per year for the EU would be sufficient to reach its target of 70% by 2010 - the equivalent of 17 million new jobs, says the report.

Unemployment is soaring in applicant countries against the trend in Member States where the EU has been successful in creating jobs, according to the Commission's annual Employment in Europe report.