The dynamics of migration in the euro area

Migration patterns within the eurozone have changed fundamentally. While prior to the crisis many citizens from Central and Eastern European EU countries migrated to Spain and other peripheral countries, the westward migration is now primarily directed to the core. The crisis has also triggered increasing migration from the periphery to the core.

Eurozone migration acts as a sensible adjustment mechanism in the labour markets. In Germany it contributes to the reduction of bottlenecks in the market for qualified labour, whereas in the GIPS it functions like a safety value. Migration also fosters growth in the host countries, while the impact on the GIPS is ambiguous.

Emigration reduces persistent structural unemployment especially in problem sectors like construction. It also helps to rein in public spending. However, the huge swing in the migration balance, especially in Spain, weighs on domestic demand. Higher remittances would be helpful to mitigate the shock from the outflow of purchasing power. While fears of a brain drain are overstated, lasting migration deficits would accelerate population ageing in the periphery

Wilfried Martens Centre for European Studies: In Focus, June 2014: Free Movement: Is one of the EU's Freedoms at Risk http://martenscentre.eu/sites/default/files/publication-files/freedom_of_movement_final.v2.pdf

ESO: Background information: Forum: Labour Mobility in the EU: Dynamics, Patterns and Policies http://www.europeansources.info/record/forum-labour-mobility-in-the-eu-dynamics-patterns-and-policies/

ESO: Background information: European Commission upholds free movement of people http://www.europeansources.info/record/memo-european-commission-upholds-free-movement-of-people/

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