Expert assignment to deliver a Scoping Study on European Territorial Cooperation. Sector Study:

Transcription

1 Expert assignment to deliver a Scoping Study on European Territorial Cooperation Sector Study: Cross-border and transnational labour market integration Elaborated by EureConsult S.A. (Echternach, Luxembourg) t33 S.r.l. (Ancona, Italy) Final Version, January 2015 INTERACT is co financed by the European Regional Development Fund (ERDF)

2 2 TABLE OF CONTENTS 1. Introduction 3 2. European labour market integration: evolution, current status and future perspectives Free access of workers to the labour markets of EEA countries and Switzerland Formal labour market integration between the EU28 and other neighbouring Third 10 Countries 2.3. Stimulating labour mobility within the EEA and supporting a better inclusion of migrant 11 workers into their host countries societies 2.4. European labour market integration and the challenge of demographic change Cross-border labour market integration and related interventions of INTERREG- and ETC-programmes Main features and future perspectives of cross-border labour market interaction at the 21 internal and external EU-borders 3.2. Cross-border interventions under INTERREG- and ETC-Programmes ( ) 34 promoting labour market development and integration 3.3. The case of the Greater Region : main features of the cross-border labour market and 43 interventions supporting labour market integration Evolution, main features and future perspectives of the cross-border labour market Cross-border interventions supporting labour market integration in the Greater Region 54 ( ) 3.4. The case of Italy-Slovenia : main features of the cross-border labour market and 60 interventions supporting labour market integration Evolution, main features and future perspectives of the cross-border labour market Cross-border interventions supporting labour market integration between Italy and Slovenia ( ) Transnational labour market integration and related interventions of INTERREG- and ETC-programmes Main features and future perspectives of labour market interactions within 72 transnational cooperation areas 4.2. Transnational interventions under INTERREG and ETC-Programmes ( ) 81 promoting labour market development and integration 4.3. The case of the Baltic Sea Region : main features of the transnational labour market 87 and interventions supporting labour market integration Evolution, main features and future perspectives of the transnational labour market Transnational interventions supporting labour market development and integration in 96 the Baltic Sea Region 4.4. The case of the Alpine Space : main features of the transnational labour market and 105 interventions supporting labour market integration Main features and future perspectives of the transnational labour market in the Alpine 105 Space EU-funded interventions in the Alpine Space area supporting labour market integration Overall conclusions 113 Annexes 121 Bibliography 146

3 3 1. Introduction This study is one of the key deliverables of an INTERACT expert assignment that was carried out by an international consortium composed of EureConsult (Luxembourg, Lead Partner), t33 (Italy) and Spatial Foresight (Luxembourg). The INTERACT assignment is meant to be a first step in a more systemic effort, which aims to conduct studies with certain regularity on issues of strategic relevance for European Territorial Cooperation (ETC). This shall allow to capitalise on past experiences and achievements of ETC and to further improve ETC-programmes in the period through learning from the capitalisation results. Due to this, the INTERACT assignment expected that cross-border and transnational cooperation is analysed in a long-term perspective ( ). This approach was deliberately chosen and differs from traditional evaluation work. By looking back into the period , the evolution of ETC since its beginnings and achievements that take a longer time to evolve and manifest should be captured. By looking forward into the medium-term future, theme-specific trends and cooperation potentials as well as other aspects of relevance for ETC in the period should be explored. For this to be achieved, the assignment defined three operational tasks which were delivered by the experts through an integrated approach (see: Figure 0). To determine more precisely the specific focus of further analysis to be carried out under the three tasks, an initial scoping exercise was carried out in August This scoping identified cooperation potentials under all eleven Thematic Objectives (TO) of the European Structural and Investment Funds (ESIF) in the period and prepared discussions at the joint kick-off meeting of September At this meeting it was agreed to address all eleven TOs of the ESIF, however with a different scope of coverage across the tasks and alongside the specific analytical focus of each task.

4 4 The Scoping Study (Task 1) covers TOs 4-7, by looking at long-term territorial trends and corresponding INTERREG / ETC investments in the fields of environment, climate change accessibility and sustainable transport. The Sector Study (Task 2) covers TOs 8-10, by realising a long-term and in-depth investigation on cross-border and transnational labour market integration. The Data Inventory (Task 3) covers TOs 1-11, by reviewing and analysing result indicators and related data sources of the draft cross-border and transnational ETC-programmes and by identifying eventual data gaps. * * * For the present sector study, the specifications of the INTERACT assignment expected that a particular topic of relevance for cross-border and transnational cooperation is investigated indepth. We had chosen the topic cross-border and transnational labour market integration for two main reasons: First, because this study topic is up to now only intensively assessed for and addressed by cross-border cooperation, but seldom for transnational cooperation. Therefore, a long-term analysis of this topic can provide a better overall understanding of the multiple problems and challenges that cross-border cooperation still faces and also help to develop a new intervention perspective for transnational cooperation. Second, because the study topic presents an opportunity for inter-linking and further substantiating findings from the two other tasks of the INTERACT expert assignment (i.e. long-term view on territorial trends and on interventions/investments of INTERREG & ETC programmes; identification of general data gaps) and is a good example showing how future thematic studies can address other themes of ETC-relevance. What do we mean by cross-border and transnational labour markets? In a single country perspective, a labour market is generally defined as an economically integrated area in which residents can find jobs within a reasonable commuting distance or can change their employment without changing their place of residence. Domestic commuting flows are therefore the primary indicator which helps to define and delineate labour market areas at different scales within a country. Cross-border and transnational labour markets differ from a domestic labour market in that they are a direct consequence and specific territorial expression of the European Union s free movement of workers principle, which itself is a still evolving cornerstone of the wider European integration process. The basic rationale behind this integration principle is to create conditions that - just alike for domestic commuting - facilitate and further intensify labour mobility across the EU s Single Market. There are various forms of international labour mobility (i.e. the movement of workers between countries) and thus also various types of mobile workers, for which definitions are set out both at the global and EU-level (see: Annex 1). The present study focuses on two types of labour mobility in the EU: a more definitive form of EU labour mobility where workers changing their place of residence and work to another country (i.e. labour migration) and a highly place-based form of EU labour mobility where workers live in one country and continuously cross the border to work in a neighbouring country (i.e. crossborder commuting). Why and in what way should cross-border and transnational cooperation take action on labour market integration? An integrated domestic labour market is usually understood as being opposed to a segmented labour market, with the latter consisting of various sub-groups

5 5 having little or no crossover capability (i.e. segmentation can result in different groups, for example men and women, receiving different wages for the same work). Truly integrated crossborder and transnational labour markets are much more difficult to achieve, because they are in addition to their likely segmentation also characterised by further fragmentation. This fragmentation of cross-border and transnational labour markets originates from the manifold systemic lines of division that still exist between EU-Member States and especially between the latter and other neighbouring non-eu states. Cross-country differences exist first and foremost for all sorts of legal matters and administrative proceedings and most often also in terms of economic and socio-cultural relations. 1 These differences generate multiple challenges and problems which negatively affect interactions on cross-border and transnational labour markets and thus also their further integration. Cooperation can help in removing such obstacles for labour market interaction, but stimulating transnational and cross-border labour mobility should not be seen as an end in itself. This is mainly because outflows and inflows of workers can also have considerable social and territorial implications in the receiving and sending areas which need to be considered as well. The sector study addresses these aspects at the level of a general analysis and through case study analyses. The general analysis introduces the complex evolutionary process of European labour market integration and provides an EU-wide overview on its implications for cross-border and transnational cooperation areas (i.e. labour mobility flows, mobility obstacles, labour market integration as an element of wider territorial integration etc.). Also the thematically relevant cross-border and transnational interventions that were supported under INTERREG and ETC-programmes are reviewed in a long-term perspective ( ). The case study analyses further deepen important issues of the general analysis by zooming into the territorial reality of specific cross-border areas (Greater Region, Italy-Slovenia) and transnational cooperation areas (Baltic Sea Region, Alpine Space). These cases were selected to show different levels of intensity in labour market development and integration and also different levels of maturity in thematic policy making. Finally, by drawing on the results of the general analysis and the case study analyses, overall conclusions are presented at the end of the study. They are developed separately for crossborder and transnational cooperation and shall help ETC-programmes in the period to further improve their cooperation on this particular theme. Furthermore, also conclusions on data availability and eventual data gaps are elaborated in order to point on problems that might occur when programmes intend to measure their expected results under the thematically relevant specific objectives in the period The sector study on cross-border and transnational labour market integration was elaborated by Dr. Thomas Stumm (EureConsult), Pietro Celotti (t33) and Alice Colin (t33), with the latter researches having elaborated the case studies on Italy-Slovenia and the Alpine Space and contributed to the financial analysis of the period e.g. differences in the formal right to access national labour markets (today especially for non-eu citizens); differences between domestic legislations on taxation, social matters and health care; diverging levels of economic development in integration (e.g. different employment/unemployment situation, different wages & prices, asymmetric trade relations etc.); different traditions, cultures and in particular linguistic settings can cause fragmentation and a further segmentation of a cross-border or transnational labour market.

6 6 2. European labour market integration: evolution, current status and future perspectives This chapter analyses the complex evolutionary process of European labour market integration, which will be looked at from various angles in order to be well understood. A first important aspect is formal labour market integration. By this we mean the process of establishing a basic right for workers from one country to have access to labour markets of other countries through applying and further expanding the EU s fundamental integration principle of a free movement of workers. Another important aspect of European labour market integration is the establishment of favourable frame conditions to encourage a mobility of workers, be this across the EU (i.e. through EU-legislation) and within the individual EU Member States. Finally, European labour market integration has also to be considered against the challenge of demographic change because it will have important implications for national and regional labour markets in the medium- and long-term Free access of workers to the labour markets of EEA countries and Switzerland National labour markets in larger parts of Europe are today highly integrated with those of other countries and the Community s free movement of workers principle was and still is the main driving force of a still ongoing integration process. This was made possible by a progressive widening of the free movement of workers principles geographical scope of application. This took place, one the one hand, through the various EEC, EC and EU enlargements (i.e. in 1973, 1981, 1986, 1995, 2004, 2007 and 2013) and, on the other hand, through the entry into force of the European Economic Area (EEA) Agreement covering the EU, Iceland, Liechtenstein and Norway (in 1994) and of the bilateral EU-Switzerland Free Movement Agreement (in 2002). A comprehensive overview on the different stages of the free movement of workers principle s geographical application scope and the current status is provided at the end of the present document for the EU 28 (see: Annex 2) as well as for the EEA and Switzerland (see: Annex 3). The free movement of workers principle is today enshrined in Article 45 of the Treaty on the Functioning of the European Union (TFEU) and its content is further developed by EU secondary legislation (directives, regulations) and by case law of the Court of Justice of the European Union. 2 Due to this formal integration process, nationals from most of the 28 EU Member States and also nationals from Iceland, Liechtenstein, Norway and Switzerland have the freedom to move to another EEA-country (EU 28 & Norway, Iceland, Liechtenstein) or to Switzerland and to work there without a work permit. After the recent Swiss popular vote "Against mass immigration" of 9 February 2014, however, some of these achievements might be called into question. 2 Originally intended for the active population, this fundamental freedom has gradually been extended to include other sections of the population and now constitutes one of the most important individual rights that the EU guarantees to its citizens. The existing body of EU law (the acquis) in this area gives European citizens the right to move freely within the EU for work purposes and protects the social rights of workers and of their family members. In this dynamic area, where change is driven by labour market policy, family structure and the process of European integration, it is free movement which not only contributes to the achievement of the Single Market but also has a significant social dimension, in so far as it fosters the social, economic and cultural inclusion of EU migrant workers within the host Member States. European Commission (2010a), p.2

7 7 Formal labour market integration within the EU 28 Between 1958 and 2003, the application of the right of a free movement of workers developed quite homogenously across the Community territory. During that period, this right entered into force in all concerned Member States of the EEC/EC/EU after the foundation in 1958 (EEC 6) 3 or immediately after their respective accession through the enlargements of 1973 (EEC 9), 1981 (EEC 10), 1986 (EC 12) and 1995 (EC 15). In the case of some EU-Member States which joined the EEC in 1973 (Denmark, United Kingdom, Ireland) and the EC in 1995 (Sweden, Finland), also prior cross-country labour market integration existed. The bases for this were the bilateral inter-state agreement concluded between the United Kingdom and Ireland and the multilateral inter-state agreement on a Common Nordic labour market which was concluded between Denmark, Sweden, Finland, Iceland and Norway (initial agreement signed on 22 May 1954, replaced by an agreement signed on 6 March 1982). Since the EU-enlargements of 2004, 2007 and 2013, however, the right of a free movement of workers developed much more unevenly across the Union territory. This was and still is due to the fact that country-specific annexes in the respective accession treaties allowed the establishment of temporary restrictions on the free movement of workers. After the 2004 enlargement (EU 25), a general open doors policy was only applied in two constellations: the right of a free movement of workers from all of the 10 new entrant countries was immediately applied in three of the EU 15 Member States (UK, IE, SE) and also among all of the new Member States. The twelve other EU 15 Member States (DE, FR, LU, BE, NL, IT, DK, EL, ES, PT, AT, FI) only opened their doors immediately for workers from Cyprus and Malta, but for residents from the large majority of the other eight new Member States they applied temporary restrictions on the free movement of workers. But also some of the new Member States (HU, PL, SI) applied temporary restrictions on the free movement of workers from these twelve old Member States. All of those temporary restrictions were progressively lifted at different dates and the last ones, which existed in Germany and Austria, expired by May This means that since then, an equal application of the right on the free movement of workers exists at least on the territory of these 25 EU Member States. After the 2007 enlargement (EU 27), a general open doors policy was immediately applied in Bulgaria and Romania for all other EU citizens and in ten of the old EU 25 Member States for Bulgarian and Romanian workers (i.e. SE, FI, LT, LV, EE, PL, CZ, SK, SI, CY). The other EU 25 Member States again established temporary restrictions in 2007 for which, however, clear limitations were set out (i.e transitional periods 4 ). These restrictions which were partly lifted in 2009 (DK, EL, ES, PT, HU) or continued to be applied up to 2012 or 2014 (DE, FR, LU, BE, NL, IT, UK, IE, AT, MA). After the 2013 EU-enlargement (EU 28), only fourteen Member States of the EU 27 applied immediately a general open doors policy to Croatian workers. The other thirteen Member 3 Free mobility of workers within the EEC 6 was, after two transitional regimes (regulations and directives of 16 August 1961 and of 25 March 1964), definitively achieved in 1968 with the Council Regulation 1612/68 of 15 October Restrictions on the right of Bulgarian and Romanian nationals to work in those countries could exist during a transitional period lasting up to 7 years after their EU-accession on the 1st January 2007, which is made up of three different phases (i.e phases). The restrictions are applied during a 1st phase (1 January December 2008) and a 2nd phase (1 January December 2011). These restrictions had to be lifted by 31 December 2011, unless a country informs the Commission before that date that it will continue to apply them because of serious disturbances in its labour market. In this case, restrictions could apply until 31 December 2013 at the latest (i.e. 3rd phase).

8 8 States do not apply EU law on the free movement of workers during the 1st transitional phase (1 July June 2015) and Croatian nationals need a work permit if they wish to work there as an employee (i.e. AT, EL, SI, BE, IT, ES, CY, LU, UK, FR, MT, DE, NL). In turn, Croatia informed the Commission that during the first phase it is also applying restrictions on access to its labour market to nationals from these thirteen Member States. The exact situation for the second and third phase is not yet known, but all restrictions must be lifted by 30 June Formal labour market integration with Norway, Iceland and Liechtenstein Labour market integration with Norway, Iceland and Liechtenstein started in 1994 with the conclusion of the international agreement on the European Economic Area (EEA). 6 Since this year, the Community principle of a free movement of workers directly came into effect in all EEA Member countries (i.e. EU 15, NO, IS, LI). Prior to the EEA, however, a much more long-standing labour market integration process also existed between the Nordic countries Denmark, Sweden, Finland, Iceland and Norway (i.e. interstate agreement concerning a Common Nordic labour market of 22 May 1954, replaced by an agreement signed on 6 March 1982). Since the EU-enlargements of 2004, 2007 and 2013, the right of a free movement of workers developed again much more unevenly within the now further widened EEA-territory. After the 2004 enlargement (EU 25) and the 2007 enlargement (EU 27), most of the newly joining EU-Member States immediately applied a general open doors policy to workers coming from Norway, Iceland and Liechtenstein. Only a few maintained temporary restrictions for workers coming from Norway, Iceland and Liechtenstein (HU, PL, SI). As the three non-eu members of the EEA were treated as "old EU Member States in regard to the respective Treaties of Accession, they were allowed to impose transitional periods for workers from the newly joining EU-Member States. This possibility was used by Norway, Iceland and Liechtenstein and temporary restrictions were applied in the EEA to the labour market access of workers coming from most of the new EU Member States (except CY & MT). These restrictions were lifted in 2006 (NO, IS) and 2011 (LI) for workers from Member States of the 2004 enlargement and for workers from Romania and Bulgaria in 2012 (NO, IS) and 2014 (LI). After the 2013 enlargement (EU 28), only Norway and Croatia applied a mutual general open doors policy to their workers. Iceland and Liechtenstein again apply transitional arrangements for labour market access to Croatian nationals. However, the exact conditions are not yet known because the Agreement on the participation of the Republic of Croatia in the European Economic Area and three other related agreements were only signed on 11 March 2014 and their entry into force is still pending. 5 For the second phase (1 July June 2018), EU countries must notify the European Commission if they wish to continue to apply their own national law for a further three years and not apply the principles concerning the free movement of workers and in the third phase (1 July June 2020), EU countries may continue to apply their national law only in the case of serious disturbance of their labour markets or a threat thereof and after notification of such to the European Commission. See: ; 6 EEA-Agreement (1994).

9 9 Formal labour market integration with the Swiss Confederation Full labour market integration with the Swiss Confederation started in 2002 when the bilateral EU-Switzerland agreement on the free movement of persons came into force. 7 At this date, also the right of a free movement of workers entered into force homogenously in all EU 15 Member States and in Switzerland. EU 15 citizens and their family members have a right to move to Switzerland, to reside there and to carry out an economic activity as an employed or selfemployed person, while the corresponding right exists of course for all Swiss nationals in the EU. Since the EU-enlargements of 2004, 2007 and 2013 and in particular after the recent Swiss popular vote "Against mass immigration" of 9 February 2014, the process of EU- Swiss labour market integration has become more heterogeneous: After the 2004 enlargement, most of the ten newly joining EU Member States applied immediately a general open doors policy to Swiss nationals desiring to work in these countries (i.e. temporary restrictions for Swiss citizens existed only in HU, PL, SI). As Switzerland was treated as an "old EU Member State in regard to the respective Accession Treaties, it was allowed to impose transitional periods for workers from the of new EU members states. Such temporary restrictions existed until 2011 for citizens from eight new EU Member States who wished to work in Switzerland (i.e. LT, LV, EE, HU, PL, CZ, SK, SI). After the 2007 enlargement, a general open doors policy was only applied by Romania and Bulgaria in relation to Swiss citizens, but workers from Romania and Bulgaria still face temporary admission restrictions which are applied in Switzerland up to This means for the moment that only citizens from EU 17 states 8 and EU 8 states 9 enjoy full freedom of movement in Switzerland and are also allowed to live and work there. 10 After the 2013 enlargement and following the outcome of the Swiss popular vote "Against mass immigration" of February , the Swiss Federal Council was no longer allowed to sign the already negotiated extension of the free movement agreement to Croatia because the new Swiss constitution article is immediately binding. As of 1 July 2014, Croatian nationals will therefore be subject to special rules (i.e. separate quotas outside quotas for third country nationals). 12 Furthermore, the Swiss Federal Council approved on 20 June 2014 a concept for implementing the new article of the Federal Constitution on immigration. This concept outlines how the Federal Council will set the quantitative limits and quotas for controlling migration to Switzerland from February The Federal Council will base its decision not only on the needs reported by the cantons, but also on the analyses of an advisory committee. Social partners will also be consulted. Quotas will apply to all types of permit valid for 7 The free movement of workers is an essential part of the Free Movement Agreement. The right of free movement is complemented by the mutual recognition of professional qualifications, by the right to buy property, and by the coordination of social security systems. The same rules also apply to citizens of EFTA member states. See: EU-Switzerland Free Movement Agreement (2002) and 8 EU 17: Austria, Belgium, Cyprus, Denmark, Finland, France, Germany, Great Britain, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Spain, Sweden or Portugal. 9 EU 8: Czech Republic, Estonia, Hungary, Latvia, Lithuania, Slovenia, Slovakia or Poland The proposal for a popular initiative "Against mass immigration" was launched by the national conservative Swiss People's Party. It was accepted on 9 February 2014 by a majority of the electorate (50.3%, a difference of 19,526 votes) and a majority of the cantons (14.5 out of 23; 12 of 20 full cantons plus five of six half cantons)

10 10 four months or more. 13 This also implies adopting permanent quotas on residence/work permits for citizens of all EEA countries except Liechtenstein. However, some flexibility is foreseen because ( ) admission for nationals of EU and EFTA states should be less restrictively regulated than for persons from third countries. In contrast to third-country nationals, EU and EFTA nationals may still be admitted even if they lack specialist qualifications. Switzerland will continue to have a dual-track admission system Formal labour market integration between the EU28 and other neighbouring Third Countries 15 Also non-eu nationals may have the right to work in an EU country or to be treated equally with EU nationals as regards the conditions of work, but these rights generally depend on their own nationality (i.e. existence or non-existence of bilateral agreements with the EU) and in relevant cases also on their status as family members of EU nationals. 16 Turkey and other Third Countries having an agreement with the EU The right of Turkish nationals to move to an EU country to work depends entirely on the domestic laws of that country. However, Turkish workers who are legally employed in an EU country and who are duly registered as belonging to the labour force also have a number of general rights applying throughout the EU Furthermore, Turkish nationals working legally in an EU country are also entitled to the same working conditions as the nationals of that country. Nationals from other Third Countries having an agreement with the EU can legally work in the European Union and are entitled to the same working conditions as the nationals of their host country. These are nationals from Russia, from countries in the Balkans (Albania, the former Yugoslav Republic of Macedonia, Montenegro) and northern Africa (i.e. Algeria, Morocco, Tunisia), from the European micro-states (Andorra, San Marino) and from the 79 countries of the African, Caribbean and Pacific Group of States. Third Countries not having an agreement with the EU Nationals from other Third Countries not having an agreement with the EU can have the right to work in an EU Member State. But this right mainly depends on the domestic laws of a Member State unless the foreign worker is a member of an EU national's family. However, there are common EU rules which do cover the following areas for workers from all such Third Countries: work of non-eu nationals who are long-term residents in the EU, Press Release, The Federal Council, : Federal Council presents concept for implementing the new article on immigration. On: When an EU national is working abroad in another EU country, family members also have the right to reside and work in that country, regardless of their nationality. Children have the right to be educated there. 17 After one year's legal employment they are entitled to a renewal of the work permit for the same employer if a job is available. After three years' legal employment they may change employers and respond to any other offer of employment for the same occupation. After four years' legal employment they enjoy free access to any paid employment in that EU country.

11 11 the right to family reunification, admission for non-eu researchers, admission for students, exchange pupils, unpaid training or voluntary service, the right of work of highly-skilled workers from outside the EU (i.e. EU blue card scheme). Furthermore, new EU rules have been proposed on simplified entry procedures and rights for all non-eu migrant workers, on conditions of entry and residence of seasonal workers from non-eu countries and on conditions of entry and residence of non-eu nationals in the framework of an intra-corporate transfer Stimulating labour mobility within the EEA and supporting a better inclusion of migrant workers into their host countries societies After the European Year of Workers Mobility in 2006, the European Commission issued a Communication in 2010 on Reaffirming the free movement of workers: rights and major developments. 18 This documents highlights on ground of Eurostat data for 2008 that ( ) 2.3% of EU citizens (11.3 million persons) reside in a Member State other than the state of which they are a citizen, and many more exercise this right at some point in their life. 19 However, the intra-eu mobility of workers was and continues to be very low in overall terms, despite increasing formal labour market integration in Europe. The Communication of 2010 also took stock of obstacles that still persist to EU-wide labour mobility. It concluded from this that ( ) EU citizens need easily accessible, understandable information on their rights and adequate assistance when moving within the European Union ( ) and aims to ( ) tackling comprehensively all obstacles European citizens encounter when they exercise their rights as Union citizens in all aspects of their daily lives. 20 From this it becomes evident that continuous action is needed at the EU- and Member States levels for further encouraging intra-eu labour mobility and for improving the inclusion of migrant workers into the society of their host countries. Community-level measures for encouraging EU-wide labour mobility The overall mobility of workers between EU Member States had been rather low in the 1990s and also remained low during the first decade of the new millennium. An increase of crosscountry labour mobility was therefore a key element to achieving the goals of the Lisbon Strategy 21 and the European Employment Strategy (EES) and it continues to remain in the focus of the European Union s growth strategy up to 2020: intra-eu labour mobility and especially mobility of the future and particularly skilled workforce should be facilitated and further promoted through the EU flagship initiatives "An agenda for new skills and jobs" and "Youth on the move". 18 European Commission (2010a) 19 European Commission (2010a), p.2. In 2008, 37% (11.3 million persons) of non-nationals in EU-27 were citizens of another Member State. The number of non-nationals in EU-27 increased by 42% since This covers the overall increase in the number of foreigners, including EU nationals from other Member States and nationals of non-eu countries. 20 European Commission (2010a), p European Foundation for the Improvement of Living and Working Conditions (2006)

12 12 An approximation for the overall level of workers mobility and its more recent development especially after the 2008 crisis can be obtained by looking at the general mobility rates among old EU 15 Member States (see: Figure 1). The figure shows that the economic crisis only had a temporary stimulating impact on overall intra-eu mobility flows (i.e. peak in 2008) and that, after a sharp drop in 2009 and 2010, the intra-eu-15 mobility rate seemed to have largely recovered by 2011 at a level before In the immediate aftermath of the financial crisis, increasing labour mobility intentions were noticed especially in EU-Member States hardest hit by the economic crisis and the subsequent Euro crisis (i.e. Greece, Portugal, Spain and Ireland, especially among young people), being mainly directed towards the core economies of the EU (esp. to Germany). 22 Figure 1: Intra-EU 15 mobility rates Source: European Employment Observatory (2013), p.6 Due to the generally low mobility of workers between EU Member States, various EU-level measures have recently been adopted or are on their way to be decided which aim to facilitate and pro-actively encourage a free movement of workers within the EEA. The mutual recognition of diplomas and professional qualifications is a basic principle of the internal market freedom of establishment and the freedom to provide services. It should enable any EU citizen to practise his or her profession freely in any Member State, but this principle is in practice often hindered by national requirements for access to certain professions in the host country. In June 2011, the Commission adopted a Green Paper on Modernising the Professional Qualifications Directive 2005/36/EC. It proposed a legislative initiative to reform the systems for the recognition of professional qualifications, with a view to facilitating the mobility of workers and adapting training and current labour market requirements. 23 The modernisation of the Professional Qualifications Directive through Directive 2013/55/EU consolidates and updates the 15 existing directives covering almost all recognition rules and provides for innovative features such as the European professional card and the mutual evaluation of regulated professions. 24 An important EU-level tool for facilitating the movement of workers is the cooperation network of European employment services (EURES). This network was established already 1993 and is coordinated by the European Commission. It involves today public employment 22 European Employment Observatory (2013), pp.3-6. See on this also: European Commission, DG Employment, Social Affairs & Inclusion (2012), Bertelsmann Stiftung (2014). 23 European Commission (2011a) 24 European Parliament (2014)

13 13 services of the EEA member states (EU 28 & NO, IS, LI) and other partner organisations (trade union and employers' organisations) and also covers Switzerland. The main objectives of EURES are (1) to inform, guide and provide advice to potentially mobile workers on job opportunities as well as living and working conditions in the European Economic Area, (2) to assist employers wishing to recruit workers from other countries and (3) to provide advice and guidance to workers and employers in cross-border regions. 25 From 2014 onwards, EURES forms part of the Commission s new Programme for Social Change and Innovation (PSCI) which integrates and extends the coverage of three previously existing programmes. 26 Within this new perspective, EURES will continue to enhance workers geographical mobility and boost employment opportunities by developing Union labour markets that are open and accessible to all. To this end, EURES will improve the self-service tools on its digital platform so as to become a real Europe-wide job mobility portal and develop targeted mobility schemes for concrete shortcomings in the labour market. 27 Other recent EU-level efforts which aim to create a more positive environment conducive to worker mobility include 28 a European health insurance card and a directive on cross-border healthcare; the coordination of social security schemes with Regulation (EC) 883/2004 and implementing Regulation (EC) 987/2009; a proposal for a directive on the portability of supplementary pension rights, on which Parliament and the Council reached agreement at the end of 2013; work placements abroad for young workers (i.e. the new Erasmus+ programme for 2014 to 2020 which allows internships and traineeships for vocational students in other Member States); the 2013 Commission Communication Free movement of EU citizens and their families: Five actions to make a difference ; a proposal for a directive on measures facilitating the exercise of rights conferred on workers in the context of freedom of movement for workers, which specifically provides for new means of redress for workers discriminated against, including conciliation and mediation. These EU-level policy measures show that important Community-level action is taken to better enforce the free movement of workers right. But further measures might still be necessary to stimulate EU-internal labour mobility, for example by awarding a broader right to freedom of movement to Third Country nationals that already reside in the EU. 29 However, all these actions might well have limitations in practice because the economic rationalchoice theory still underlying many of the policy measures stimulating mobility can be regarded as inadequate to the extent that they not cover all aspects of the individual decision-making process to move. 30 Instead, one has also to consider the strong power of immobility at the level of individuals which has until now prevented a flourishing and fluid EU-wide labour market to emerge. This is mainly because ( ) the bordering of our orientation and (id)entity ( ) and the i.e. Progress (Programme for Employment and Social Solidarity), EURES (European Employment Services) and the European Progress Microfinance Facility. 27 European Parliament (2014) 28 European Parliament (2014) 29 For this latter aspect see in particular: European Policy Centre (2013) 30 Nordregio (2013b), p.17

14 14 ( ) social border produces a difference in the imagination of belonging and as such it produces an attitude of indifference towards the market on what is perceived as the Other side. The avoidance of uncertainty and wish to border oneself and identify with an existing socio-spatial category then become important motivators for non-action ( ) 31 and also for individual decision on immobility. Domestic policies supporting society inclusion & cross-country labour mobility A full inclusion of EU migrant workers into the society of their respective host countries is not only necessary for further stimulating EEA-wide labour mobility, it is also a practical step towards achieving a social Europe and a more inclusive Union in the sense of the Europe 2020 Strategy. A better inclusion of migrant workers has become an essential obligation for domestic policies of EU Member States within the scope of the EU s equal treatment principle. While migrant jobseekers were previously considered as having to be treated on an equal footing with nationals as regards access to work alone, subsequent case law of the Court of Justice generally concluded that the introduction of the European Union citizenship means that they should also qualify for equal treatment with regard to access to benefits of a financial nature intended to facilitate access to employment on the labour market of the host Member State. However, some limitations were also formulated in this respect by the Court of Justice. 32 National legislators thus remain competent for determining the nature of the link of migrant workers with their employment markets, but EU Member States should in this respect observe the principle of proportionality (i.e. criteria should not go beyond what is necessary to conclude that the person concerned is genuinely seeking work on the employment market of the host Member State). 33 Reality shows, however, that migrant workers still are for many aspects of daily life in a more vulnerable position than national workers (e.g. housing, language, employment of spouses and partners etc.) and that for achieving an overall satisfactory situation across the EU 28 there is some way to go in many of the Member States. This is also illustrated by the Migrant Integration Policy Index (MIPEX), 34 which provides a view on a number of key policy areas and a wide range of factors that are critical to a migrant's opportunities to integrate into society. A country ranking established on ground of MIPEX data for 2010 shows the following results for all integration-relevant policy areas and for the policy area labour market mobility (see: Table 1). The large majority of EU Member States have domestic policies that are either just halfway favourable or slightly unfavourable for integration. Scoring around 50% of the scale (i.e. halfway favourable) means that ( ) overall policies create as many obstacles as opportunities for immigrants to become equal members of society. Migrant workers, reunited families, and long-term residents enjoy basic security, rights and protection from 31 Van Houtum, H. / Van Der Velde, M. (2004) 32 A Member State could require that there be a genuine link between the jobseeker and the geographic employment market in question, such as the person needing to have, for a reasonable period, genuinely sought work in the Member State in question. Also, a proportionate residence requirement may be appropriate for the purpose of proving a link with the labour market. 33 European Commission (2010a), p.8 34 The third edition of the MIPEX, conducted in 2011, measured policies to integrate migrants in 27 EU Member States and Australia, Canada, Japan, New Zealand, Norway, Serbia, South Korea, Switzerland and the USA. It used over 148 policy indicators covering seven policy areas which shape a migrant's journey to full citizenship: labour market mobility, family reunion, education, political participation, long-term residence, access to nationality and anti-discrimination. These have been designed to benchmark current laws and policies against the highest standards (i.e. drawn from Council of Europe Conventions or European Union Directives; where there are only minimum standards, European-wide policy recommendations are used) through consultations with top scholars and institutions using and conducting comparative research in their area of expertise. A number of policy areas also cut across the MIPEX strands, such as integration programmes and healthcare and housing.

15 15 discrimination. The three greatest obstacles are for settled foreigners to become citizens or politically active and for all children, whatever their background, to learn and achieve together in school. 35 Table 1: Country ranking on integration-relevant policies and on labour mobility-relevant policies MIPEX III ranking categories Favourable (Score: ) 1. Sweden (83) Slightly favourable (Score: 79 60) for all integration-relevant policy areas (*). 2. Portugal (79) 3. Canada (72) 4. Finland (69) 5. Netherlands (68) 6. Belgium (67) Country ranks (country scores) 7. Norway (66) 8. Spain (63) 9. USA (62) 10. Italy (60) South Korea (60) for the policy area labour market mobility. 1. Sweden (100) 2. Portugal (94) 3. Netherlands (85) 7. Germany (77) 8. Denmark (73) Norway (73) 10. Finland (71) 11. Italy (69) Country ranks (country scores) 4. Spain (84) 5. Canada (81) South Korea (81) 12. Romania (68) USA (68) 14. Estonia (65) 15. Macedonia (60) Halfway favourable (Score: 59 41) 12. Luxembourg (59) 13. Germany (57) UK (57) 15. Denmark (53) 16. France (51) 17. Greece (49) Ireland (49) Slovenia (49) 20. Czech Republic (46) Estonia (46) 22. Hungary (45) Romania (45) 24. Armenia (44) Macedonia (44) 26. Switzerland (43) 27. Austria (42) Croatia (42) Poland (42) 30. Bosnia (41) Bulgaria (41) 16. Austria (56) 17. Croatia (55) Czech Republic (55) UK (55) 20. Belgium (53) Switzerland (53) 22. Armenia (51) 23. Greece (50) 24. France (49) 25. Luxembourg (48) Poland (48) 27. Bosnia (46) Lithuania (46) 29. Slovenia (44) 30. Malta (43) 31. Hungary (41) Slightly unfavourable (Score: 40 21) 32 Lithuania (40) 33 Malta (37) 34 Slovakia (36) 35 Cyprus (35) 36 Latvia (31) 37 Turkey (24) 32. Bulgaria (40) 33. Ireland (39) 34. Latvia (36) 35. Cyprus (21) Slovakia (21) Unfavourable (Score: 20 1) 37. Turkey (10) (*) The policy areas considered are (1) labour market mobility, (2) family reunion, (3) education, (4) political participation, (5) long-term residence, (6) access to nationality and (7) anti-discrimination. Source: Own elaboration on ground of data from the third edition of the MIPEX (data of 2010), The overall result for the key policy area labour market mobility shows a slightly better overall situation for EU Member States, but also here a majority of them still have related domestic policies that are either just halfway favourable or slightly unfavourable. However, it appears that ( ) not all foreign residents with the right to work have equal access to the full labour market, education system or employment services. For instance, only nationals and EU nationals in Europe enjoy equal opportunities in the public sector and better procedures to recognise their non-eu degrees. Moreover, ( ) targeted support is the major area of weakness in most countries. Rarely are these general services able to address specific needs, especially for migrant women and youths. Furthermore, ( ) immigrants have better access and targeted support in the established countries of immigration. Likewise, the countries that restrict access are not usually the ones that try to take advantage of immigrants specific skills. As exceptions to these trends, BE, FR, and LU are wasting the economic potential of many of their non-eu residents by providing targeted support but closing many sectors to them. Countries recently dependent on migrant workers (CZ, IT, ES, PT) may treat them equally as workers, but often ignore the specific challenges of the foreign-born. EE and RO emerge as the only Central European countries that are at least slightly prepared for their future migration needs

16 16 By comparing MIPEX data for 2007 and 2010, a concluding view on observable short-term changes and trends can be obtained. The comparison shows at least that ( ) immigrants received greater labour market support in 10 countries. More legal residents will have equal access to jobs and training in several new countries of immigration (GR, ES, PT) and in Central Europe (HU, PL, LV). Countries sometimes used opportunities in EU law to improve their legislation. More established countries of immigration made progress on targeted support measures, which are generally weak in all countries. Immigrants in AT and DK will see several new targeted support measures, and their qualifications may be better recognised in CA, PT and LU European labour market integration and the challenge of demographic change Demographic change is a global societal challenge and its highly diverse social and economic impacts within the European Union 38 are increasingly recognised and also given high priority on the EU s policy agenda. 39 In parallel, also the evident territorial dimension of demographic change and its likely impact on the medium- and long-term socio-economic development of EU regions is examined by various EU-wide studies and policy documents. 40 Academic and policy-level analyses converge in that demographic change consists of two main dimensions: population aging and population shrinking (see: Box 1). The extent of demographic change is thus determined by a complex interplay between fertility, lifeexpectancy, migration and the current age structure, which are together strongly influencing the amount of births and deaths and thus population growth as well as the future age structure. Box 1: The two main dimensions of demographic change Population aging, being measured in various ways, is a global phenomenon resulting from two almost universal trends which are a declining fertility and an increasing life-expectancy. Most countries in the world experience today declining fertility or have stagnating fertility (i.e. in most developed countries, fertility is below replacement level) and the majority of countries also report increasing life expectancies. Both trends were made possible by general medical advances and by a further expansion of the welfare state in developed countries against the background of economic prosperity (i.e. with the introduction of social security systems, own children were no longer a primary necessity for ensuring old-age security). As a consequence, most parts of the world will witness during the 21st century demographic aging (however with large discrepancies) which is defined as a rise in the median age of populations and a growing share of people above age 65. Population shrinking or depopulation, defined as a negative percentage change in population size within unchanged territorial boundaries (i.e. equivalent to changes in population density), is a much more specific phenomenon perceived at different geographical levels (national, but mostly regional & local), because inward or outward migration flows might compensate or further accelerate the general trend of demographic aging See for example: Commission of the European Communities (2007); The World Bank (2007) 39 Following a major public debate launched by the Green Paper Confronting demographic change: a new solidarity between the generations of March 2005 (COM(2005)94, adopted on 16 March 2005), as well as the discussions at the level of heads of state and government at the Hampton Court informal summit of October 2005, the European Commission presented its views on the demographic challenge and the best ways for tackling it in the Communication The demographic future of Europe - from challenge to opportunity (COM(2006) 571, adopted on 12 October 2006). 40 See for example: BIB-Federal Institute for Population Research (2007); Tivig, T./Frosch, K./Kühntopf, S. (2008); European Commission, DG REGIO (2008); European Commission, Eurostat (2010); ESPON (2010a); Bauer, R. / Fassmann, H. (2010)

17 17 Demographic change is not a problem as such, because it encompasses evident risks and also new opportunities which altogether have important implications for the European Union s territorial cohesion. A shrinking and also further aging population will exert varying pressures at the EU, countrywide, regional and local levels on socio-economic development processes and on the related public policies (e.g. provision of public goods and services, social security systems, economic development, labour market policy etc.). Population aging can also generate new economic development and employment opportunities in that it stimulates the emergence of alternative business activities that respond to the growing demand for age-specific products and services or address the need for age-specific advertising and distribution methods (i.e. the silver economy ). Likely shifts in the collective or individual conceptualisation of social relations should also not be forgotten, which can emerge from population aging (i.e. new inter-generational life concepts; conflicts between a decreasing young and a steadily growing older population) and the need for a stronger foreign immigration (e.g. need for better inclusion and inter-cultural understanding). All European countries and regions already notice the implications of demographic change on their labour markets (i.e. aging of the working age population, shortage of skilled staff etc.) and these will be further increasing in the medium- and long-term future, albeit with different levels of intensity and divergent patterns across the EU 28 territory. This is also why those labour market implications are given particular attention to in the Europe 2020 Strategy. The ESPON 2013 applied research project DEMIFER assessed and visualised the already observable change in the working age population during the period and also projected long-term trends for labour force changes between 2005 and 2050 on ground of four different policy scenarios. The observed change in the working age population between 2000 and 2007 shows (see: Map 1) that in a large majority of countries the size of the working age population increased, but also that ( ) in more than one quarter of the NUTS2 regions the potential labour force declined ( ). In this context Germany is head and shoulders above the rest: the year old population decreased in three out of every four German NUTS2 regions. Other countries with relatively many regions in which the working age population declined are the United Kingdom, Bulgaria, Hungary, Denmark and Sweden. On the other hand, there are almost 50 regions where this population increased by more than one per cent per year. Many of these regions can be found in the eastern part of Spain, the southern part of France, in Ireland, and in Poland. Here too, the proposition that big cities attract labour migrants is confirmed. 41 From the long-term projection it appears that prospects on growth of the labour force differ quite considerably between the four policy scenarios (see: Map 2). Only in the EME scenario (i.e. Expanding Market Europe) a growing labour force is foreseen: about 20 per cent larger by This is solely due to higher activity rates as the population in the age bracket will be stable up to According to the GSE scenario (i.e. Growing Social Europe), in spite of rising labour force participation rates the size of the labour force won t grow anymore in the future, as the positive effects of more participation are kept in check by a slight negative population growth. The two other policy scenarios sketch a future with a considerable shrinking labour force. As the age 41 ESPON (2010a), p.7

18 18 pattern of activity rates resemble the current pattern to a high degree, the decrease of the labour force is mainly caused by the shrinking population. In the LSE scenario the fall of the size of the labour force is impressive: a combination of falling activity rates and a negative population growth causes a decline of 20 per cent by ( ) But also ( ) the flourishing economic circumstances depicted in the EME scenario cannot prevent a huge rise of the dependency ratio, namely to 1.4 by Map 1: Change in working age population between Source: ESPON (2010a), p.8 All of the above-mentioned analyses converge in that a higher EU-internal labour mobility and especially a higher inflow of immigrants from outside the EU will become increasingly important for compensating the projected decline in the working age population. Already in 2007 the Commission estimated that up to 2050 net migration well above the European levels of recent decades would be necessary to compensate for the decline in the working age population (app. 56 million persons needed for the EU 27). 43 This in turn also requires that domestic policies of the Member States will have in the medium- and long-term to develop much more favourable conditions in support of a full socio-economic integration of migrant workers, immigrants and also of other marginalised groups of society. 42 ESPON (2010a), p Commission of the European Communities (2007), pp

19 19 Map 2: Change in labour force between 2005 and 2050 according to different DEMIFER scenarios (*) (*) The Limited Social Europe scenario (LSE) and the Growing Social Europe scenario (GSE) are cohesion oriented and explore the effect of policies trying to diminish regional disparities in the labour force participation. The GSE scenario operates in favourable economic and environmental settings while the LSE-scenario has to deal with scant economic and environmental prospects. In the Expanding Market Europe (EME) and the Challenged Market Europe (CME) scenarios, public policies are focused on competitiveness and the basic philosophy is that the economic market has to do its work, so barriers which impede its functioning are being removed. Notwithstanding a general and fierce rise in the activity rates due to a rather high economic growth, regional disparities are becoming larger in the EME scenario as stronger regions show a higher rise. In the CME scenario activity rates are falling due to a sustained economic downturn. Disparities are growing as weaker regions have to face a steeper fall in activity rates than the stronger regions. Source: ESPON (2010a), pp. 38, 43

20 20 3. Cross-border labour market integration and related interventions of INTERREG- and ETC-programmes This chapter analyses the implications of the gradual but territorially differentiated evolution of European labour market integration for cross-border areas, first through a general analysis (Sections 3.1 and 3.2) and then by means of two case studies (Sections 3.3 and 3.4) The development and further integration of cross-border labour markets has increasingly become a reality with the EU-wide labour market integration process. This happened first along several internal borders of the EEC/EC ( ) and then along many of the new internal borders which were increasing in number with the successive EU-enlargements ( ), but also along the EU-borders with Norway, Liechtenstein and Switzerland. In parallel, but especially since the early 1990s, one can observe that cross-border commuter flows increased significantly along these borders. Section 3.1 of the general analysis reviews the main features and challenges of cross-border labour market integration in Europe (i.e. specific situation of cross-border workers; size & orientation of cross-border commuting flows; factors influencing on cross-border labour mobility; implications of demographic change), while section 3.2 provides a summary analysis of interventions that were supported by the INTERREG and ETC-programmes in the period The two case studies on the cross-border areas Greater Region (Section 3.3) and Italy- Slovenia (Section 3.4) were carried out with a view to integrate and further deepen some of the core issues addressed under the previous sections of this chapter. The cross-border area Greater Region covers old internal EU-borders where the free movement of workers is a reality since decades. At date, the Greater Region cooperation area displays the highest cross-border commuter flows in the EU 28 and most of them concentrate on the narrow cross-border zone around Luxembourg. Cross-border labour market integration has reached an advanced stage and creates a win-win constellation among the neighbouring border regions. However, intense commuting also induces new challenges and some unwanted sideeffects that need to be jointly addressed in order to sustain territorial integration of the entire cooperation area. The cross-border area Italy-Slovenia covers a border that evolved over a long time from an external EU-border to and a new internal EU-border. Due to this evolving border status, the free access of Slovenian workers to the Italian labour market only became a reality in 2006 when temporary restrictions for workers were lifted. Cross-border cooperation started already in 1995 with the INTERREG IIA-Phare CBC Programme, but only the ETC-programme for the period operated for the first time at an open new internal EU-border. As a consequence, programme interventions supporting cross-border labour market development progressed slowly but clearly over time, both in terms of scope and quality.

21 Main features and future perspectives of cross-border labour market interaction at the internal and external EU-borders Increasing flows of workers across a border point to intense spatial interactions on the crossborder labour market and are also a clear sign that previously fragmented border-regional labour markets are becoming more integrated (i.e. evolution from a half circle towards a full circle labour market) and evolve towards a situation that is close to what is usually experienced in the domestic context. However, a good understanding of cross-border labour market integration processes can only be achieved if the multidimensional reality of borders is considered: 44 there are the established political (land) borders in Europe which are, at the same time, characterised by different geophysical, economic and socio-cultural features. Each of these border-dimensions generates a range of specific effects in the concerned border regions that are rarely found in areas not located at a border. These effects can either have positive implications ( opening effects ) or negative implications ( closure effects ) for the domestic and border-crossing exchange relations of the concerned regions (see: Annex 4). But the overall impact of a border in a given cooperation area is determined by a complex interplay between the individual border-effects from all dimensions, which in turn can lead to further alleviation, re-enforcement or neutralisation effects. This overall causal nexus between the multidimensional border reality and the related border effects is particularly well-suited for analysing cross-border commuting and the process of cross-border labour market integration in general. The particular situation of cross-border workers In the context of the free movement of workers principle, the term worker was further defined by case law of the EU s Court of Justice and ( ) cannot be subject to national definitions or be interpreted restrictively. It covers any person who undertakes genuine and effective work for which he is paid under the direction of someone else, but it does not cover third country migrant workers. 45 As regards cross-border workers, also frequently referred to as frontier workers or cross-border commuters 46, the Commission has already considered in its Communication COM(85) 529 of 1985 and still considers that it is not advisable to establish a specific status for them. They are today not treated any differently from other workers enjoying the rights to free movement of workers who are EU nationals working in another Member State. 47 Sill, cross-border workers are in a particular situation that is mainly determined by key features characterising their daily life. Cross-border workers, employed or self-employed, work on one side of a border but live on the other and return home daily or at least once a week. Crossborder workers have a specific status as migrant workers in the country where they work. If 44 The ESPON 2013 project GEOSPECS analysed in much detail this multidimensional reality of European borders and elaborated a general and also a more detailed typology of border effects (see: ESPON 2012, pp ). Beyond a purely economic perception of such effects, this typology also took into account a wider range of socio-economic aspects and socio-cultural and behavioural influences. 45 European Commission (2010a), p.4 46 Between 2011 and 2014, the European Commission has changed the term applied on their topic-related website from crossborder worker (i.e. to crossborder commuter ( although other Commission websites still apply the term cross-border worker. 47

22 22 they are not a national of the country where they live, they are considered as having sufficient means to support themselves and their family and will therefore have the right to live there. Cross-border workers are in everyday life subject to the laws of both countries, but it should be stressed that the definition of what a cross-border worker exactly is may vary from one field to another (e.g. tax law, right of residence, welfare entitlements). As only a part of these fields is regulated by specific Community-level rules, 48 some of the rights and obligations of cross-border workers will depend on the country where they work (e.g. employment laws, tax laws in some cases) while others on the country where they live (e.g. tax laws, real estate taxes, residence formalities etc.). Social security rights mainly depend on the country of work. Cross-border workers, as a general rule, pay social security contributions in the Member State where they are employed and they are subject to the legislation of that state even if they live in another Member State. With regard to benefits, in general, cross-border workers get short-term benefits from the state where they last paid insurance and long-term benefits proportionately from all the countries in which they paid insurance. Cross-border workers also enjoy the same rights as their colleagues with regard to sickness benefits, maternity and paternity benefits, invalidity, old-age and survivors' pensions, insurance against accidents at work and occupational diseases, death grants, early-retirement and family benefits. Cross-border workers and their families are also entitled to all the social advantages granted to workers in the country where they work (e.g. reduced train fares, educational grants, access to educational institutions or parking cards for disabled people). The rule in relation to unemployment benefit is as follows for cross-border workers: during partial or intermittent unemployment they get their benefit from the country of employment, whereas during periods of being wholly unemployed, they get their benefit from the country of residence. The formal openness of EU-borders for cross-border commuting The different stages and levels of formal labour market integration within the EEA (i.e. EU28 & Norway, Iceland, Liechtenstein) as well as between the EU and Switzerland or other neighbouring Third Countries lead to strong variations in the openness of borders along the continental and overseas territory of the European Union for cross-border commuting. The time-wise evolution and the variety of formal border statuses has been visualised by the ESPON 2013 project GEOSPECS for the year 2012 (see: Map 3). If this map and also the more recent developments since the 2013 EU-enlargement by Croatia are considered, then the following summary conclusion can be drawn on the current situation. All internal EU-land borders between the 28 Member States and also all EU-land borders with Norway, Liechtenstein and Switzerland are now open to cross-border commuting. In the latter case, however, it remains to be seen how the June 2014 implementing decision of the 48 Specific Community rules exist in the field of social security which define the concept of cross-border worker for the purpose of determining in which Member State they are entitled to social benefits. In the field of taxation, however, no Community level rules exist and neighbouring Member States with many persons crossing borders to work often agree special rules for cross-border workers in their bilateral double taxation conventions. See:

23 23 Swiss Federal Council taken after the popular vote "Against mass immigration" (i.e. permanent quotas on residence/work permits for citizens of all EEA countries) will affect cross-border commuting between the Confederation and the concerned neighbouring EU Member States (DE, FR, AT). Map 3: Formal border openness for cross-border commuting (status of 2012) 49 Along the external EU land borders with neighbouring Third Countries, highly diverse conditions for cross-border commuting exist. Crossing the border every day for work is still impossible along the land borders with several neighbouring Third Countries which have not concluded bilateral agreements with the EU (i.e. Belarus, Ukraine, Moldova, Serbia, Suriname in Southern America). Cross-border commuting possibilities can exist along a number of other external EU-land borders, but these depend upon the conditions stipulated in bilateral agreements concluded with the EU (i.e. Russia, Albania, former Yugoslav Republic of Macedonia, Montenegro, Andorra, San Marino, Morocco for the Spanish enclaves of Ceuta and Melilla). 49 ESPON (2012a), p.129

24 24 Long-term development of cross-border worker flows 50 A Commission Communication of 1990 on the Living and working conditions of Community citizens resident in frontier regions (COM (90) 561 final) indicated for the first time an aggregated figure for cross-border workers in the EEC 12: on ground of the available statistics, the purely intra-community flows were estimate between 110,000 and 120,000 in The subsequent EU-enlargements and the related widening of the free movement of workers principles application scope has without doubt contributed to the significant long-term increase of cross-border worker flows and in particular to their doubling in the period (i.e. from 380,000 to 780,000). An early European Parliament study of 1997 analysed the general context for cross-border commuting and also the volumes of commuting flows along the borders between EU 15 / EEA countries and Switzerland. 52 In overall terms, approximately 380,000 cross-border workers were identified on average per year during the period (EU 15 & NO, LI, CH,). Five countries appeared to be the most important suppliers of cross-border workers (i.e. FR, IT, BE, DE, AT), while five other countries had been the main importers (by level of significance: CH, DE, LU, Monaco, NL). It was also observed that the main cross-border flows were virtually in one direction only. Although this overall figure accounted for only 0.26% of the total EU working population in 1995, the cross-border labour market element was nonetheless crucial for the development of certain cross-border regions (esp. the Saar-Lor-Lux-Trier/Palatinate region or the Meuse-Rhine Euregio). One decade later, a comprehensive EU-wide analysis was realised in 2008/2009 for the Commission s DG Employment: it already identified a total of 780,000 cross-border workers in the years 2006/2007 for the EU 27/EEA/EFTA countries. 53 These figures for cross-border worker flows indeed refer to the situation immediately before the economic crisis, but they represent the most accurate status that is currently available. DG Employment of the European Commission indeed published more recent figures on 2010, but we refrain from using that data in the following analysis because no clear differentiation was made in that study between crossborder commuters and migrant workers. 54 The flows of cross-border worker concentrate, today as in the past, mostly on the old EUinternal borders of Member States in the Central-Western part of the EU 28 (incl. their external EU-borders with Switzerland) and also on some specific new internal EU-borders borders of a few old or new Member States. A country-wide analysis of the commuting balance in the years 2006/2007 (see: Map 4) reveals quite different results with respect to where cross-border workers are living (outcommuting) and where they are working (in-commuting). 50 Overall, there are very few studies which provide reliable EU-wide figures on cross-border commuting. Therefore, only the most important ones are used and the following paragraphs will closely follow the respectively adopted approaches for resultpresentation in order to avoid misinterpretation. 51 European Commission, (1990), p.6 52 Original full paper version (European Parliament, 1997) and the still on-line accessible summary (European Parliament, 1997/2014) 53 European Commission, DG Employment and Social Affairs (2009) 54 European Commission, DG Employment, Social Affairs and Equal Opportunities (2011), pp and in particular pp : This study highlights that ( ) there are inevitable problems when it comes to differentiating between commuters and migrants in the data ( ) since ( ) these usually come from household surveys ( ). Given this likely lack of consistency and the problems surrounding the issue, the only practical approach is to accept that with the data available, there is no means of drawing a neat distinction between the two and to examine developments on both fronts.

25 25 Map 4: Commuting balance by countries for the years 2006/ As regards workers leaving their country of residence to work in neighbouring countries (outcommuting), one can observe the following for total figures and out-commuting ratios (i.e. outcommuters per inhabitants): 56 About 85% of all commuters by country of origin live in the EU-15/EEA/EFTA (especially France 36.5%, Germany 15.1% and Belgium 10.0%) and less than 15% in the EU-12 countries. ( ) Some countries highlight a sizable ratio of the national workforce is commuting to a neighbouring country ( ): Very high ratios of out-commuters are shown in Liechtenstein (30.3) and Estonia (15.8). High ratios of out-commuters are shown in Belgium (7.3), Slovenia (6.7), Slovakia (6.2), France (4.4), Sweden (3.4), Austria (3.2) and Ireland (2.8), France being the largest among these countries. The countries with high and very high ratios of outcommuters are with the exception of France rather small. Otherwise they don t have much in common. As regards workers from neighbouring countries entering the labour market of a country (incommuting), one can observe the following for total figures and in-commuting ratios (i.e. incommuters per inhabitants): 57 In contrast with the numbers of out-commuting, we can note an even higher importance of the EU-15/EEA/EFTA with regard to in-commuting. Almost 95% of all commuting flows enter one of its markets ( ). Extremely high ratios of in-commuters can be found in Monaco (762.4), Liechtenstein (359.5) and Luxembourg (255.1). Very high ratios of incommuters in Andorra (28.6) and Switzerland (27.5). High ratios of in-commuters in Austria (5.2), Finland (4.2), Ireland (4.0), Belgium (3.7), Netherlands (3.5), Norway (3.4), Denmark (2.8) and the Czech Republic (2.2). In contrast to the countries with high ratios of out-commuting, the countries with high ratios of in-commuting share several characteristics. They usually have a high or even very high income (measured in GDP per capita), the most evident examples being Luxembourg and 55 European Commission, DG Employment and Social Affairs (2009), p European Commission, DG Employment and Social Affairs (2009), pp.17, 19. The notion of EU-12 refers to the entrant countries of the 2004 and 2007 EU-enlargements. 57 European Commission, DG Employment and Social Affairs (2009), p. 21. The notion of EU-12 refers to the entrant countries of the 2004 and 2007 EU-enlargements.

26 26 Liechtenstein; among the EU-12 countries the Czech Republic is the country with the second highest GDP per capita and has the highest level of in-commuting. And the rate of unemployment in these countries is rather small, with the exception of Belgium and Finland. When comparing 2006/2007 figures on cross-border commuting to those of 1999/2000 (i.e. presented in a similar DG Employment study of ), one can observe a medium-term increase of the total number of commuters in EU 15/ EEA / EFTA by 26%, from about 490,000 in 1999/2000 to about 660,000 in 2006/2007. The medium-term increase of out-commuting ( ) has been most distinct in France (+53,000, mainly to Switzerland and Belgium) and Germany (+45,000, mainly to Netherlands, Denmark and Austria). The highest increase in percent is observed in countries with small numbers of crossborder commuters (Hungary 140%, Spain 137%), but there are also countries with high numbers of out-commuters where a strong percental increase could be measured (Germany 63%, Belgium 48%). The only countries whose commuting outflow is stagnating or slightly falling are Austria and the Netherlands, as a result of the decreasing commuter flows to Germany ( ). Also some EU-12 countries that have shown a significant development since 2004 already constitute important countries of origin as for cross-border commuting, e.g. Estonia (+9,000), Hungary (+7,000) and Slovakia (+6,500). 59 As regards the development of in-commuting ( ) several countries have denoted enormous growing rates in the amount of in-commuting workers since The most prominent of them are Switzerland (+58,800, mainly from Germany, Italy and France), Luxembourg (+40,500, mainly from France, Belgium and Germany), the Netherlands (+25,000) and Austria (+33,500, mainly from its four eastern borders). Extraordinary increases in percent are to be found in countries with a small number of cross-border in-commuters like Ireland, Norway, Denmark, Portugal, Slovenia, Slovakia, Poland ( ). 60 Also along the land borders between the four Nordic EEA countries Denmark, Sweden, Finland and Norway, cross-border commuting has steadily increased between 2001 and Since the first quantification of the total number of cross-border commuters made in 2001 (i.e. 25,400 individuals had their residence in one Nordic country and their main workplace in another), cross-border commuter flows increased by 23 % to a total number of 44,000 persons in 2006 (see: Map 5). In the period from 2005 to 2006 alone the total number of cross-border commuters in the Nordic countries; representing approximately an additional individuals. Swedish Map 5: Commuting between Nordic Countries in 2006 Source: Nordregio (2010), p European Commission, DG Employment and Social Affairs (2001) 59 European Commission, DG Employment and Social Affairs (2009), p European Commission, DG Employment and Social Affairs (2009), p.22

27 27 commuters accounted for the majority of this increase 87% or commuters while Danish and Finnish commuters to Sweden made up the remaining 13%. 61 The overall findings of the DG Employment study of 2009 for cross-border commuting flows at the level of NUTS 3 border regions 62 are not too dissimilar to those at the national level (see: Annex 4). However, it is observed that ( ) by the percentaged relation to the dimension of the regional labour market, the genuine share of commuting in the respective regions becomes evident, which casts a different light on some countries. With regard to in-commuting, apart from the special status of Luxembourg, Liechtenstein and Monaco, the highest level of in-commuting can be found in Ireland, followed by Switzerland. Besides, also Austria, Finland and Norway have been shown to have relatively high in-commuting rates in relation to their population. The low sector is almost completely substantiated by EU-12 countries, whereas for out-commuting, structural weaknesses can also be discovered in South-Eastern Europe (Greece, Romania). High levels of outcommuting are obvious in the first place for France and Ireland (which underlines the high importance of the Irish region with regard to transborder mobility). Beside Liechtenstein and Belgium, out-commuters are characteristic for many labour markets in EU-12 countries, such as Slovakia, Estonia or Slovenia. 63 In order to get a visual overview on different intensity levels of regional cross-border commuting in Europe, we reproduce below a map (see: Map 6) from a recent study elaborated by the Association of European Border Regions (AEBR). 64 Map 6: Levels of regional cross-border commuting in partner areas of the AEBR project 65 High degree of cross-border mobility Medium-high or medium degree of crossborder mobility Medium-low degree of cross-border mobility Low degree of cross-border mobility Particular conditions (external EU-border or non-eu-borders) 61 Nordregio (2010), p The DG Employment study of 2009 also analysed the level of cross-border commuting for the sum of border regions at NUTS 3 level which are located along a common border of two neighbouring countries (i.e. thus not relating to a political definition of existing cross-border co-operation structures such as Euroregions, Working Communities etc.). 63 European Commission, DG Employment and Social Affairs (2009), p The study summarises the main findings of a project on labour market mobility barriers that was part-financed by DG Employment, 65 AEBR (2012a), p.10

28 28 Factors influencing on a cross-border mobility of workers Decisive driving forces for cross-border commuting are different kinds of push and pull factors 66, but it is also observed that economic push-factors have generally less importance in causing cross-border commuting within the EU than economic pull-effects. A bad economic situation in one country is not enough to stimulate cross-border commuting towards another country, ( ) because only ( ) if the economic situation is much better across the border jobseekers are willing ( ) to start cross-border commuting. Countries with high income and low unemployment attract the highest numbers of cross-border commuters. 67 Other important factors are the great variety of mobility obstacles which cross-border workers face on a daily basis along all internal borders of the EU 28. The already mentioned DG Employment study of 2009 has carried out a detailed analysis of such obstacles to crossborder mobility within the EU 27 and established a ranking which reveals the following overall patterns (see: Table 2). 68 Table 2: Obstacles to cross-border mobility (mean values) 69 Major obstacles for all cross-border regions were different language settings and a lack of information, which are then followed by large number of medium obstacles (e.g. different types of regulatory prescriptions, adequate transport infrastructure) and concluded by different mentalities or cultures that are considered minor obstacles. The assessment also revealed marked geographic differences among cross-border areas with respect to the significance of those obstacles: the significance is lowest in cross-border areas covering the internal EU-borders between the 12 new Member States that joined the EU in 2004 and 2007 (and possibly also for Croatia), already higher in cross-border areas covering the 66 Everett S. Lee divided in its book A Theory of Migration (1966) factors causing migrations into two groups, push factors and pull factors. Push factors are unfavourable aspects of the area a person lives in. They can be related to inadequate political conditions (e.g. political discrimination or persecution, desire for more religious freedom, war), inadequate economic conditions (e.g. not enough jobs, loss of wealth), inadequate social conditions (e.g. poor housing, poor medical care discrimination) or other negative context conditions (e.g. desertification, famine or drought, natural disasters, pollution). Pull factors are aspects that attract a person to another area. They can again be related to more favourable political conditions (e.g. more political or religious freedom), more favourable economic conditions (e.g. better employment opportunities, higher wages, higher quality of available jobs), more favourable social conditions (e.g. better education, better medical care, lower rents or real estate prices, family links) and other positive context conditions (e.g. attractive climate, better quality of life). 67 European Commission, DG Employment and Social Affairs (2009), p European Commission, DG Employment and Social Affairs (2009), p European Commission, DG Employment and Social Affairs (2009), p.43

29 29 internal borders between the old EU 15 Member States and highest in cross-border regions covering borders between old and new Member States. Mobility obstacles also exist along the land borders between the four Nordic EEA countries (Denmark, Sweden, Finland Norway), despite a borderless labour market that exists since 60 years due to the Nordic macro-regional integration agreement of The Nordic Labour Journal and the Freedom of Movement Forum have drawn up a list of the ten most important border obstacles (out of 39 identified in total), which still make it difficult for Nordic citizens to settle down and work in a different Nordic country from their own (see: Annex 6). 70 Also the recent AEBR-study gathered further evidence on the variety of weaknesses and obstacles that still hamper the mobility of workers on different types of cross-border labour markets (see: Table 3). Moreover, the study underlines that the ( ) majority of obstacles limiting mobility are obviously registered in those regions that have the highest numbers of crossborder employees. 71 If the above-identified obstacles are viewed together, it becomes obvious that many of them can only be tackled effectively through national-level policies and in particular through more effective cross-country cooperation and coordination (e.g. educational system, 72 legislation relating to the social & welfare system, taxation). Table 3: Main weaknesses observed on cross-border labour markets 73 Mobility level Type of border Main weaknesses observed High or mediumhigh level of cross-border mobility on the labour market Rather low level of cross-border mobility on the labour market Rather low level of cross-border mobility on the labour market Old EU 15 internal borders, incl. Switzerland and Norway (North-West Europe and Scandinavia) Old external borders between EU 15 and Member States of the 2004 and 2007 enlargements (e.g. IT/SI, AT/SK, DE/CZ) Medium or medium-low level of crossborder mobility on the labour market New internal borders (e.g. PL/ LT, PL/ SK), and some old borders in South-West Europe (ES/PT) External EUborders (e.g. FI/RU) - Frequent lack of command of foreign languages - Local transport structures not always optimally constructed - Insufficient usage of opportunities created by cross-border mobility by employers, and employees - Insufficient agreement of public administration bodies with regard to overcoming obstacles limiting mobility - Fluctuation of currency exchange rates (e.g. in the case of CH, UK-Northern Ireland) - In some cases formal EURES-T partnerships were dissolved and informal cooperation is not sufficient - Often insufficient command of the language of the neighbouring country - Inflexibility of educational systems - Often lack of optimum network of local cross-border transport - Lack of adequate knowledge about legal regulations concerning the labour market in the neighbouring country - In some cases, lack of intercultural competences - Insufficient support for the development of the integrated labour market at the political level Structural problems on the labour market - Youth unemployment - Insufficient innovative work placements - Often lack of an optimum network of local cross-border transport - Insufficiently developed cross-border cooperation in the sphere of the labour market - Relatively few counselling opportunities for mobile employees - Not attractive salaries in comparison with other European countries - Structural problems on the labour market - Formal obstacles for mobility due to border controls (lack of special regulations for the inhabitants of border regions) - Often lack of an optimum network of local cross-border transport - Relatively few counselling offers for mobile employees or hindered access to information Source: Own elaboration on ground of information provided in the AEBR Study of AEBR (2012), p This might sometimes also be a power at the regional level e.g. in Germany or Belgium. 73 European Commission, DG Employment and Social Affairs (2009), p.43

30 30 As regards taxation, for example, the Commission observed already in 2010 that existing bilateral double taxation conventions do not resolve all problems caused by the interaction of the Member States direct tax systems and therefore called for a better coordination of Member States direct tax systems. 74 Healthcare is another complex matter with relevance for crossborder workers and labour market integration and the EU-level action has recently taken action on this with the Directive 2011/24/EU on the application of patients rights in cross-border healthcare. The directive makes provision for the introduction of a general framework to clarify patients rights with regard to accessing cross-border healthcare provision, guarantees the safety, quality and efficiency of care that they will receive in another EU Member State and promotes cooperation between Member States on healthcare matters. Even though cross-border workers have today quite easy access to information on the standard situations (e.g. through web portals, brochures etc.), it can become extremely complicated if the situation of a worker differs from that standard situation. Moreover, the complexity of the legal frameworks and the language used by public administrations can make that potential or even already employed cross-border workers are not really aware of their social security rights and obligations. 75 The Øresund cross-border area (DK-SE) is again a very good example for a case where national welfare systems are markedly different from each other and where the respective domestic legislation on social matters still complicates the daily life of a rapidly increasing number of cross-border workers (see: Box 2). Box 2: Obstacle to commuting & migration in the Øresund area (DK-SE) Cross-border commuting and intra-regional migration in the Øresund area is not free from obstacles, as the border is the meeting point of two different political and administrative systems. Sweden and Denmark now have significantly different welfare states, with the former having moved more toward a social insurance model while the latter supports social benefits through higher taxation. These differences create difficulties for cross-border commuters, for example in the fields of taxation, social security, pensions and unemployment benefits Taxation: People commuting to work over the border had a problem receiving information of rules affecting them and risked paying double taxes. Some of these problems have been solved in recent years through political co-ordination between the countries, but the local tax authorities have difficulties implementing the complex rules for cross-border taxation. Unemployment benefits: In Denmark, unemployment insurance is voluntary; workers must join an unemployment insurance fund to be eligible for unemployment benefits. In Sweden, a flat rate benefit is provided to those who are not part of an insurance fund. Those living in Sweden but who worked in Denmark until they became unemployed would only be entitled to full unemployment benefits if they had voluntarily signed up to an insurance fund. Working on both sides of the border: Those living in Sweden and working in Denmark are covered by the Danish social insurance system, but coverage reverts to the Swedish system if they have a second job in Sweden. In that case, Danish employers (who unlike their Swedish counterparts - do not normally pay social insurance contributions) incur additional costs in employer contributions in accordance with Swedish laws. Those living in Denmark but working in Sweden and who take a second job in Denmark face an additional special income tax on their Swedish earnings. Pensions: Swedish workers in industries covered by national collective bargaining (around 90% of the workforce) are automatically enrolled in a mandatory occupational pension scheme, which supplements their public pension entitlements. The state pension in Denmark is lower, and normally supplemented by private or occupational schemes, but enrolment is not automatic. In addition, some Danish pension entitlements still require residence criteria. Another example is the voting privilege which concerns permanent migrants within the cross-border area. Danes living on the Swedish side of the Øresund Region lose their right to vote in general elections in Denmark. Sources: McEwen/Petersohn (2014); Panteia (2010c) 74 European Commission (2010a), p AEBR (2012), p.2

31 31 Open labour markets, intense commuting and territorial integration Intense cross-border commuting along many EU-borders is indeed a clear sign for a stronger functional integration of the respective cross-border labour markets. But the wide range of persisting mobility obstacles also indicates that cross-border labour markets are still subject to fragmentation, albeit different levels of significance. Cross-border labour market integration will thus remain an important but difficult task along all borders that requires a continuing cross-border cooperation effort over a longer time period in order to achieve significant and also lasting improvements. The main reason for this is, as rightly pointed out by the AEBR-study, that differences in social security and taxation laws, in national pension schemes and education systems cannot be expected to ( ) be eliminated in the foreseeable future by harmonising all relevant legislation within the EU. And, this is not desired by the Member States, even with the completion of the Single Market. Accordingly, it has to be rather taken into account that due to the dynamic changes in national legislations, new situations will arise that can produce additional uncertainties as regards cross-border labour mobility. 76 Cross-border commuting can also create new needs and challenges which have to be addressed in order to sustain the wider integration process (i.e. local or regional traffic increase, new support or information services, new qualification offers etc.). This becomes evident in crossborder areas that are characterised by particularly intense or rapidly increasing commuter flows. A good example for the latter is the Øresund cross-border area (DK-SE) because it illustrates well the complex interplay between rapidly growing commuter flows, the benefits flowing from a further integrated cross-border labour market and the emergence of new challenges that were previously not experienced to be highly relevant for the entire integration process (see: Box 3). Box 3: Evolution of cross-border commuting in the Øresund area (DK-SE) The basic right of a free access to labour markets of the neighbouring countries has only become a substantial crossborder reality in the Øresund area (DK-SE) with the opening of the fixed link in the year 2000, as it removed a major physical obstacle to commuting. Shortly before the EU-accession of Sweden in 1995, only around 2,000 people were commuting on a daily basis between both countries by using ferry services (of which 75% were Swedes working in Denmark & 25% Danes working in Sweden) and immediately before the Øresund bridge opened only around 2,600 people (1999) commuted. Since the opening of the fixed link, however, the number of commuters increased rapidly in the Øresund area: from 3,000 (in 2000) to 8,000 (in 2004), to 14,000 (in January 2007) and up to 19,800 in The exceptional growth in the period was due to both Danish companies' labour shortages and significant house price differences on the two sides of the sound. Only in the aftermath of the financial and economic crisis, the volume had fallen to 18,000 people by 2011 and to around 15,000 by For the period , however, the now larger cooperation area Øresund-Kattegat-Skagerrak (DK-SE-NO) expects a further rising of cross-border commuting up to 30,000 persons in the year 2023 (i.e. baseline of for the enlarged area was at 26,452 commuters in the year 2009). These growing and still high commuter flows are mainly directed from Sweden to Denmark, because Swedish commuters took advantage of the need for labour on the job market in Copenhagen and the higher salaries offered in Denmark. The majority of the commuters from Sweden work in the service sector, including transport, communication, retail, hotel and restaurant services. It is estimated that Øresund commuters contributed 740 million EUR in added value to the Danish economy, and 4.4 billion EUR since the Øresund bridge opened in In parallel, also a steady increase of permanent cross-border migration was observed within the Øresund area, but mainly in the inverse direction: since July 2000 a total of 22,500 Danes have moved to Scania region in the South of Sweden because of lower house prices, starting from a little more than 2,000 persons per year in 2001 up to nearby 6,000 persons per year in AEBR (2012), p.1

32 32 The annually published Øresund Integration Index, trailing integration efforts in the Øresund cross-border region since 2001, shows that cross-border labour market integration has been deepening continuously between 2003 (index value: 32) and 2008 (index value: 72). This growing labour market integration has indeed generated mutual benefits in the cross-border area as the Danish side benefits from Swedish labour during periods of labour shortages, while Sweden saves on unemployment benefit costs when its residents cross the border to take up these jobs. However, the more intense commuting also led to a drastic increase of traffic in the Øresund area (between 2005 and 2006, by 43%). Another related development was the growing imbalance in the municipal budgets, since the flow of commuters is moving mostly in one direction (i.e. from the residential side in Sweden to the labour market side in Denmark). Rules of taxation have left municipalities in the Scania region with increased costs not covered by increased tax revenues from the growing commuter population mainly taxed in the country of employment. Although an agreement has been reached (compensation payments to Sweden) it does not solve the initial problem. Sources: McEwen/Petersohn, (2014); Panteia (2010c), Öresundsdatabasen, engelsk ( Demographic change and cross-border labour market integration Demographic change is challenging labour markets of border- and cross-border regions already at present and it will do much more so in the medium- and long-term future. Already now, demographic change is strongly affecting border regions. If a look is taken at the most recent NUTS 3 level maps of Eurostat which represent selected features of demographic change (see: Maps 7-11), one can observe that in many parts of Europe national borders are clearly marked. This means in other words that quite significant differences exist within the concerned cross-border areas which may also affect their joint labour markets. Such strong differences re-appear in nearby all maps along the land borders of France with several of its neighbours (ES, BE, LU, DE and partly CH), along the old external EU-borders following the previous Iron Curtain line (DE-PL, DE-CZ, AT-CZ, AT-SK, AT-HU), along the borders of Scandinavian countries (DK-DE, SE-NO, FI-NO) and also at the border Greece-Turkey. A recent AEBR-study underlined in this respect that ( ) in Scandinavia and the majority of countries in North-West Europe, the lack of labour force is becoming more and more acute due to on-going demographic changes. Cross-border regions in Southern Europe struggle with the results of the economic crisis and the ensuing debt, which have led to rapid growth of the number of unemployed in those countries. Cross-border commuting may indeed help to overcome difficulties on border regional and cross-border labour markets because ( ) the demand for labour force in some areas can be satisfied, even temporarily, with the help of employees coming from a neighbouring country. 77 For the medium- and long-term future, however, it is rather difficult to provide an in-depth analysis of the likely pressures that demographic change will exert on border-regional and cross-border labour markets. This is mainly because existing long-term projections are usually carried out at the NUTS 2 level, which is obviously a too abstract geographical level for getting insights into the territorial reality close to borders. However, the already mentioned AEBR-study gathered qualitative evidence on these issues through the realised online survey. From this it appears that all types of surveyed cross-border regions, be they characterised by a currently high or low cross-border mobility, foresee serious labour market challenges. These are due to a further aging of the workforce and a lack of a qualified workforce (esp. cross-border areas with high labour mobility) or an emigration of young people to urban agglomerations of their home 77 AEBR (2012), p.9

33 33 county (esp. cross-border areas with medium-low or low labour mobility) and to other countries (esp. in cross-border areas with low labour mobility along current external EU-borders & the old external borders of the EU 15). 78 Maps 7-11: Different patterns of overall population change (Map 2.2), resulting from positive or negative natural change (Map 2.3) combined with positive or negative net migration (Map 2.4), and old age dependency ratio (Map 2.9). Legend for maps : Legend for map 2.9: Source: Eurostat, Regional Yearbook AEBR (2012), pp.11-14

34 Cross-border interventions under INTERREG- and ETC-Programmes ( ) promoting labour market development and integration After the first pilot programme on cross-border co-operation that were launched on ground of Article 10 of the former ERDF-regulation and supported the lagging border areas along the internal borders of the Community ( ), the INTERREG I Community Initiative was launched in Although some cross-border areas had already been active in the field of cross-border labour market integration before the start of INTERREG, it were mostly the four generations of crossborder INTERREG- and ETC-programmes ( , , , ) that supported interventions aimed at facilitating cross-border commuting and at deepening an of cross-border labour market integration. Cross-border programmes for There are only a few documentary sources on the first generation of cross-border programmes which allow getting a deeper insight into the scope and focus of interventions that promoted cross-border labour market integration. A folder-based publication of DG XVI with fact sheets on each of the 31 approved INTERREG I programmes 79 shows that 5.8% of the total Community support of ECU 1,034 million (in 1992 prices) 80 was earmarked for interventions in social matters (see: Figure 2). Although such social interventions might have covered a wider range of issues, they are likely to have supported most of the labour-market relevant projects in fields such as education, vocational training or support services for cross-border commuters. A total of 19 INTERREG I programmes earmarked Community support for social interventions that were around the average of INTERREG I and very often also very significantly above the average. Most of these programme covered the EEC 6 land borders and some also maritime borders were commuting is rather difficult (see: Table 4). Yet, no further information on the precise nature of the realised interventions and on the actual spending at the end of the programming period is available. The first edition of the AEBR-LACE practical guide to cross-border cooperation 81 identified a number of good practice projects that were implemented in these cross-border areas. Those supported by INTERREG I were the set-up of an Euroregional Training Centre (Pôle Eurorégional des Formations -PERF) under the programme Wallonia/Nord-Pas-de Calais (BE-FR); the realisation of cross-border vocational training measure of technical agents under the programme Pôle Européen de Développement (LU-BE-FR); the realisation of cross-border vocational training seminars under the programme euregio rhein-maas nord (DE-NL) as well as of eight cross-border vocational training 79 European Commission, DG XVI (1993) 80 i.e. ECU 926 million from ERDF, ESF and EAGGF and a further ECU 119 million committed under Article 10 of the former ERDF- Regulation for actions in areas which were not normally eligible. 81 AEBR/European Commission, 1995, pp

35 35 actions under the programme EUREGIO (DE-NL), to help reduce high levels of unemployment and to better meet the cross-border labour market demand. Beyond this, also a number of good practice projects emerged under the EURES cross-border programme that was launched at that time by the European Commissions GD V on Employment (e.g. EURAZUR cross-border Eures Menton Ventimiglia FR-IT; Euroguichet Social BE-NL). Figure 2: Breakdown of expected total Community funding for INTERREG I by sector of activity Source (figure): European Commission, DG XVI (1993). Source (table): Own elaboration on ground of data provided in the programme factsheets of European Commission, DG XVI (1993). Table 4: Programmes with a high share of funding dedicated to social actions (in % of total) Pamina (DE-FR) 5.8 Corsica (FR)-Sardinia (IT) 5.9 Greece 6.1 Ireland-United Kingdom 6.2 Scheldemond (BE-NL) 6.3 Denmark (Bornholm) 6.4 Italy-Austria 7.9 Euregio Rhine Waal (DE-NL) 10 Euregio (DE-NL) 10.2 Middengebied (BE-NL) 11.6 Wallonia (BE)-Nord-Pas-de Calais 13 (FR) Euregio Meuse-Rhine (DE-NL) 14.3 Lorraine (FR)-West Pfalz / 19.9 Saarland (DE) Wallonia (BE)-Champagne 20.1 Ardennes (FR) Ems-Dollard (DE-NL) 22.5 Euregion Rhine-Northern Meuse 23.8 (DE-NL) France-United Kingdom 24 France-Italy (land borders) 27.3 Spain-France 50 Cross-border programmes for During the period , a large number among the 59 INTERREG IIA programmes were actively promoting cross-border labour market integration. They did this through measures that most often mitigated and sometimes also eliminated existing obstacles for a cross-border mobility of workers. With respect to the overall outcome achieved by these INTERREG IIA programmes, the Commission s ex-post evaluation highlighted that significant results were reached ( ) mainly by medium-sized and small programmes in permeable borders with a tradition in co-operation. Good results were also achieved in other borders, especially those characterised by a medium degree of isolation, e.g. UK/F, F/CH, I/CH, DK/S, E/F, despite the prevailing constraints affecting daily, people-to-people contact. 82 Under INTERREG IIA programmes covering internal and some external EU-borders which were characterised by a low degree of isolation (i.e. NL-BE, DE-NL, DE-NL-BE, DK-DE, DE-AT, DE-LU, DE-FR, FR-BE, FR-DE-CH, DE-AT-CH-LI), cross-border co-operation activities were in general easier to launch and often also needed because of the already significant cross-border 82 LRDP (2003a), pp.69-71

36 36 commuter flows. INTERREG IIA programmes covering these borders usually supported an organisation of joint initial training or dual qualification courses, the creation of cross-border qualification certificates and the establishment of specific advisory services or permanent support structures for cross-border commuters. These activities were in most cases meant to complement other interventions that focussed on promoting cross-border entrepreneurship, R&D and innovation or tourism (see: Annex 7). However, one could also observe that several programmes covering the borders BE-NL, FR-BE- LU, DE-LU, DE-FR and DE-FR-CH had quite often to struggle with problems that originated from the previous multi-funds nature of INTERREG IIA programmes. 83 Furthermore, the programmes covering the borders of France with Belgium 84 and partly with Germany (Saarland) were unable to fully spend their ESF allocations. This was because of ( ) the competing availability of ESF resources (Objective 1, Objective 3 and 4 programmes), an ineligibility or lack of co-funding and existing language barriers on some parts of the border (France/Belgium-Flanders, France/Germany) that still form a serious bottleneck for such activities. 85 Many INTERREG IIA programmes covering EU borders that are characterised by a medium or high degree of isolation implemented only few actions in the field of cross-border labour market integration. This was most often due to the existence of major geographical obstacles (e.g. high mountain ranges, larger maritime separation), an absence of significant employment potentials on both sides of a border (esp. mono-sector-employment esp. in rural cross-border areas) or long distances and low population density. 86 Despite these rather unfavourable framework conditions, some INTERREG IIA programmes covering the border between Spain and France or the borders of Denmark, Sweden and Finland have realised remarkable actions (see: Annex 7). They led to ( ) a punctual adjustment of qualification shortcomings on the local labour markets and increased the capacity of individuals regarding their cross-border mobility (i.e. sometimes also leading to an increase of cross-border commuters) ( ), but the positive results did ( ) not contribute to further integrate cross-border labour markets in a more substantial manner. 87 Along the former external EU-borders where at that time legal restrictions existed for crossborder commuting, especially the INTERREG IIA programmes of Austria, Germany and Finland with Central and Eastern European Countries could realise some first attempts to cross-border co-operation in the field of vocational training (see: Annex 7). However, only in exceptional cases were such training and qualification courses been realised on a cross-border basis or were initiatives preparing cross-border labour market integration launched (e.g. Austria-Hungary). A final issue observed was that only a few INTERREG IIA programmes have established direct links with the ESF-funded EURES cross-border partnerships that already existing in many border areas (EURES-T-network). Positive examples were the INTERREG programmes along the DE-NL and DE-NL-BE borders, the Øresund programme (DK-SE) and the programme Spain-France BE-NL (Scheldemond, Middengebied), FR-BE-LU (Pôle européen de développement), DE-LU, DE-FR (Saar-Lor-Westpfalz, PAMINA), DE-FR-CH (Oberrhein-Mitte-Süd). 84 Nord-Pas-de-Calais/West Flanders, Nord-Pas-de-Calais/Picardie/Hainaut, Champagne Ardennes/Wallonie. 85 LRDP (2003a), pp e.g. Spain/Portugal, Ireland/UK-Wales, Sweden/Finland/Norway (North Calotte) 87 LRDP (2003a), pp LRDP (2003a), p.69

37 37 Cross-border programmes for The 64 INTERREG IIIA programmes 89 covered co-operation areas of a variable size which - at the outset in 2000 were characterised by very heterogeneous overall framework conditions for promoting an integrated development of cross-border border regions ranging from favourable (15 programmes) over less favourable (19 programmes) to unfavourable (30 programmes). 90 Among the eight Strand-A priority topics set out by the INTERREG III Guideline for , one focussed explicitly on promoting the integration of the labour market and social inclusion. A large number of cross-border programmes have carried out interventions on this topic, as can be demonstrated by the findings of an in-depth financial analysis of the three-digit level fields of intervention that was carried out by the Commissions ex-post evaluation of INTERREG III. 91 Out of the 130 existing fields of intervention, 94 were applied by the INTERREG III programmes and among those one can also find 5 fields that address issues closely related to labour market integration. 92 Interventions in the field of workforce flexibility, entrepreneurial activity, innovation, information and communication technologies ranked highest among the five fields (but at position 13 among all 94 fields) and they were applied by more than half of the Strand-A programmes. Interventions for the development of educational and vocational training ranked second among the five fields (but at position 23 among all 94 fields) and they were applied by around half of the Strand-A programmes. Labour market policy interventions ranked third among the five fields (but at position 33 among all 94 fields) and they were again applied by around half of the Strand-A programmes. Interventions on positive labour market actions for woman and on vocational training only ranked fourth and fifth (but at position 44 and 46 among all 94 fields), but they were still applied under slightly less than half of the Strand-A programmes. Unfortunately, the ex-post evaluation of INTERREG III did not carry out a comprehensive analysis of the focus and outcomes of interventions promoting an integration of cross-border labour markets. However, some in-depth information is available for the evaluation s twelve programme-level case studies on Strand-A. The Finland-Estonia programme, for example, was strongly focussed on human resources development because the most important fields of intervention were educational and vocational training, social inclusion and labour market policy (i.e. altogether representing 40% of total expenditure). Also in the cases of the programmes Vlaanderen-Nederland (BE-NL) and Alpenrhein-Bodensee-Hochrhein (DE-AT-CH-LI), labour market policy interventions were relatively strongly represented. Another good example is the programme Øresund (SE/DK) INTERREG IIIA programmes + the specific cross-border strands Estonia-Latvia- Russia & Latvia-Lithuania-Belarus, which form part of the wider INTERREG IIIB New Neighbourhood Programme Baltic Sea. 90 This basic classification was made in the Commissions ex-post evaluation of INTERREG III and considered basic geographical, political and socio-economic features of the borders as well as variations with respect to previous co-operation experience and the maturity of this co-operation. See: Panteia (2010b), pp.35, Panteia (2010a), pp i.e. Fields of intervention with the codes 174 (vocational training), 210 (labour market policy), 230 (developing educational and vocational training; persons and firms), 240 (workforce flexibility, entrepreneurial activity, innovation, information and communication technologies; persons and firms) and 250 (positive labour market actions for woman). If expenditure on these five fields is aggregated and put in relation to the total funding allocated to all INTERREG III programmes (Strands A-C, ESPON, INTERACT), than this would equal to a share of around 5.5% or a 4th position after the most important fields of intervention 414 (Innovative actions), 413 (Studies) and 312 (Roads).

38 38 which could, among many other outcomes, successfully eliminate ( ) a number of existing barriers hampering the achievement of a common and more flexible cross-border labour market or hindering young trainees in the region to seek their work experience placement on the other side of the border. 93 Also the programme PAMINA (DE-FR) showed a high concentration on training activities (14%) and other labour market interventions (15.7%), but the implementation process revealed that measures of the related programme axis were not this strongly demanded due to a stagnation of the cross-border labour market. Cross-border programmes for The 53 cross-border ETC-programmes had a total committed ERDF-contribution of around 5.2 billion at the end of 2012, 94 of which they allocated around 350 million or 6.7% of the total committed ERDF-funding to labour market-relevant interventions (i.e. intervention field codes 62-74, see Annex 9). As ETC involved the 12 new Member States for the first time in full during this programming period, it can be interesting to see which overall pattern in the funding allocation to labour market interventions emerges if the EU-enlargement factor is taken into account. Such a differentiated analysis can be justified by the socio-economic disparities that existed between border regions belonging to both groups of countries and also because of the different degrees of border openness for cross-border commuting. Both of these factors create in fact unequal historical opportunities to cooperate on this topic and thus might also lead to a different thematic allocation of ETC-resources. The result of a differentiated financial analysis suggests, however, that cross-border programmes involving the 12 new EU Member States have allocated the same share of ERDF-support to labour market interventions (7% or million) than programmes only involving the old EU15 Member States (i.e. 7% or million). 95 If the ERDF-funding distribution to labour market interventions is now analysed at the programme level, then quite different and interesting features appear in the period (see: Table 5). If only the highest absolute amounts of ERDF-funding for such interventions are considered, then it appears that 17 cross-border programmes mobilised around 68.5% (or million) of the total ERDF-support for labour market interventions of all 53 programmes. Interestingly, most of these programmes cover cross-border areas that have a maritime (7) and mountainous or rural dimension (5) where cross-border commuting is usually rather low (i.e. except the Øresund area of the DK-SE-NO programme and the Two Seas programme). If the shares for such interventions within the total ERDF-support of programmes are looked at, then it appears that 18 programmes have allocated a clearly above-average proportion of their total ERDF-support to labour market interventions (i.e. between 9% and 38%). This group comprises most of the programmes of the group above, but there 93 Panteia (2010b), p The following information stems from a financial analysis of the programming period which was realised in the context of this assignment (see: Scoping Study), based on the categorisation data (in its raw form) as reported in the 2012 Annual Implementation Reports by the Managing Authorities, which was made available by DG REGIO. See: 95 i.e. the programme-level separation of ERDF-funding was done by assuming that a cross-border programme involving EU15 and EU12 Member States belongs to the EU12 group (i.e. mainly because of the new cross-border challenge this area is facing). This obviously generates an overestimation of the EU12 group s financial weight in the period

39 39 are also five newcomers 96 and several programmes that dropped out (i.e. the programmes Two Seas, Hungary-Romania and France-Wallonie-Vlaanderen ). Many of the eight programmes that support labour market development most intensively (i.e. > 15% of their ERDF-support) cover again cross-border areas where one would not expect this to happen (i.e. exceptions are again the Øresund area and the DE-DK programme Fehmarnbeltregion ). Table 5: ERDF-funding allocated of cross-border programmes to labour market interventions 17 programmes with the highest ERDF-funding for labour market interventions, commitment status as of end 2012 (*) 18 programmes with the highest shares of their total ERDF-funding allocated to labour market interventions, commitment status as of end 2012 Programmes million Programmes % 1. Öresund-Kattegatt-Skagerrak (DK-SE-NO) 32,98 1. Fehmarnbeltregion (DE-DK) 38,19 2. Central Baltic (FI-SE-EE-LV) 21,21 2. Öresund-Kattegatt-Skagerrak (DK-SE-NO) 29,48 3. Hungary-Romania 17,78 3. Central Baltic (FI-SE-EE-LV) 21,21 4. France(Manche)-United Kingdom 16,52 4. Greece-Cyprus 20,49 5. Spain-France-Andorra 15,94 5. Ireland-United Kingdom(Wales) 17,74 6. Greece-Bulgaria 15,73 6. South Baltic (PL-SE-DK-LT-DE) 17,45 7. Italy-France (Alps) 15,24 7. Amazonie 16,32 8. Two Seas (FR-UK-BE-NL) 13,65 8. Latvia-Lithuania 15,99 9. Spain-Portugal 13,43 9. Syddanmark-Schleswig-K.E.R.N. (DE-DK) 14, Germany(Brandenburg)-Poland 12, Alpenrhein/Bodensee/Hochrhein (DE-AT-CH-LI) 13, South Baltic (PL-SE-DK-LT-DE) 10, Greece Bulgaria 13, Latvia-Lithuania 10, Austria-Hungary 11, Greece-Cyprus 9, France(Manche)-United Kingdom 10, Austria-Hungary 9, Germany(Brandenburg)-Poland 10, Ireland-United Kingdom(Wales) 9, Italy-France (Alps) 10, France-Belgium (Wallonie,Vlaanderen) 8, Slovakia-Austria 9, Upper Rhine (DE-FR-CH) 7, Spain-France-Andorra 9, Upper Rhine (DE-FR-CH) 9,72 Total, all 17 programmes 239,47 Average, all 53 programmes 6.69 (*) i.e. programmes with ERDF-funding above the average ERDF-funding of all 53 programmes (i.e. 6.6 million) Source: own elaboration on ground of ERDF commitment data 2012 provided by DG REGIO As a qualitative and quantitative EU-wide assessment of the 53 cross-border programmes is not yet available (i.e. ex-post evaluation of the period ), it is rather difficult to appraise the focus and achievements of the supported labour market interventions in overall terms. Therefore, only a general summary of most relevant interventions can be given below which covers the entire period under review. Summary of key interventions in the period If one remembers the most important obstacles to cross-border mobility and also the effective scope of action that individual border regions dispose for removing or tackling such obstacles (see: Section 3.1), then it becomes clear that the following types of intervention will remain of high relevance for a joint labour market development in the medium- and long term: 96 i.e. the two DE-DK programmes Fehmarnbeltregion and Syddanmark-Schleswig-K.E.R.N. ; the programme Amazonie and the programmes Alpenrhein-Bodensee-Hochrhein (DE-AT-CH-LI) and Slovakia-Austria.

40 40 provision of cross-border information and advice to cross-border workers; provision of cross-border vocational training and qualification offers; provision of cross-border educational offers at all levels that enhance language skills and promote inter-cultural understanding. INTERREG- and ETC-programmes have supported the establishment of many information and advice services for cross-border workers 97 and they will have to continue doing this in a medium- and long-term perspective. Such services promote a positive attitude towards crossborder mobility, ( ) but it is of particular importance to meet the particular information needs of employees, employers and job seekers, who are confronted with much more questions and problems when they cross the border. 98 One of the most remarkable INTERREG-funded success stories in this respect can be found in the cross-border area that today is covered by the ETC-programme Upper-Rhine Area (DE-FR-CH). The Offices for information & guidance on cross-border questions, better known as INFOBEST, were developed already during the INTERREG pilot programme phase and have, due to their great success, become totally independent from any Community-level support (see: Box 4). Box 4: Supporting cross-border mobility the INFOBESTnetwork One of the very first projects that were launched in the PAMINA cross-border area (DE-FR), which already formed part of the INTERREG pilot programmes , was the development and equipment of an Office for information & guidance on cross-border questions. The office was inaugurated in January 1991, permanently located in a former customs office in Lauterbourg (F) and jointly staffed with French and German personnel. The office distributed information about living and working conditions on either side of the border and provided practical assistance on all those cross-border issues affecting the daily life of citizens or enterprises. Due to the quick success of this highly innovative cross-border resource centre in the former PAMINA programme area, the approach was copied into the neighbouring INTERREG I / IIA programme area Upper Rhine Middle- South. New offices were subsequently installed there at three locations (i.e in Kehl/Strasbourg & PALMRAIN at the Franco-German-Swiss border; 1996 in Vogelgrun-Breisach). At the end of the 1990s, the four offices treated together between 2,500 and 3,500 requests per year: some of these request were written, but most emerged over the phone or during direct visits in the offices. Requests on work and social matters accounted between 50 % and 70 % of all requests received. Since the merger of the former programmes PAMINA and Upper Rhine Middle-South in 2007, the four offices now operate within the entire area of the new trilateral programme Upper Rhine (DE-FR-CH). They are inter-linked in a network which is widely known as the INFOBESTnetwork. The offices continue to provide information on a variety of topics that can be of interest for citizens that decide to work or live in the neighbouring country (e.g. school education and vocational training, marriage and family, employment, unemployment, family benefits, fees, taxes and custom duties etc.). Furthermore, the INFOBEST-offices are not dependent on EU funding any longer as they are financed by several public and private institutions from the region that support the idea of cross-border mobility. Also the French state offers financial support for the INFOBEST offices. As regards the initial founding office in Lauterbourg, more specifically, it has now become one of the four main statutory tasks with which the public-law based cross-border local purpose association EURODISTRICT REGIO PAMINA is formally entrusted. The Eurodistrict has its legal headquarters/seat in France and is a public entity in form of a mixed grouping (syndicat mixte) according to the French National Act on Territorial Authorities (Code Général des Collectivités Territoriales). Sources: AEBR-Association of European Border Regions / European Commission, DG Regio (1999); Panteia (2010d); AEBR (2012). 97 A recent AEBR study provides an extensive overview on cross-border labour market information services across European border regions (not only INTERREG/ETC-funded) and also lists many good practice examples (AEBR, 2012, p.23-39). 98 AEBR (2012), p.4

41 41 Also outside the context of INTERREG- and ETC-support, there are other EU-wide, cross-country or cross-border information and advice services which should not be forgotten. An important one is of course EURES, which established specific cross-border partnerships (often also referred to as EURES-T) already since the mid-1990s. Currently, a total of 19 cross-border partnerships exist which involve more than 13 countries (see: Annex 8) and help to solve information problems cross-border workers. 99 Other examples are the Border Service Centres in the Nordic countries, which were set up with support from the Nordic Council of Ministers. They ( ) provide personal assistance and guidance to cross-border workers that have to cope with specific administrative, legal and fiscal requirements. 100 In addition, also some of the Euroregions or similar cooperation structures such as the EUREGIO or the Region Sønderjylland-Schleswig ( ) provide consultancy and advisory services within their own projects focusing on the facilitation of cross-border labour mobility. 101 INTERREG- and ETC-programmes have supported cross-border vocational training or qualification measures and also here they need to continue doing this, mainly because a number of typical problems will have continuing actuality along many EU-borders. It can be observed that services or schemes for initial vocational training and further training (i.e. qualification, lifelong learning) still show deficiencies in their cross-border orientation, wherefore improvements are needed to better support an adaptation of the workforce to changing conditions on the cross-border labour market. The latter can result from processes of structural change in the border-regional economy (e.g. disappearance of employment and high structural unemployment due to industrial decline; changing production processes due to technological progress) or from solidifying workforce imbalances due to population aging and strong outward migratory flows, especially of young people (esp. in rural & peripheral border regions). Cross-border areas indeed have specific needs, priorities and potentials for jointly developing training or qualification measures, but there are many good practice approaches that can be adapted to the context of other cooperation areas and then be applied there in practice. A promotion of language skills and inter-cultural understanding through cross-border educational measures at all levels has a strategic pivotal function for the future development of cross-border labour markets. They help to mitigate language barriers and can reduce mental barriers, which are both key elements of the strong power of immobility that is observed in the context of commuting and labour migration. The continuing relevance of these barriers can be mostly explained by the fact that uniform trends emerging from the socio-cultural globalisation process will not be capable of eliminating the peoples rootedness in varying elements of individual identity and of a wider feeling of belonging together (e.g. traditions, language, belonging to an ethnic group or historically grown homelands etc.). As a consequence of this, also socio cultural demarcation lines between peoples and countries and in particular the hard linguistic demarcations that exist along many European borders will not vanish in the long-term EURES cross-border partnerships aim to meet the need for information and coordination connected with labour mobility in the border regions. The partnerships bring together public employment and vocational training services, employers and trades union organisations, local authorities and other institutions dealing with employment and vocational training. EURES cross-border partnerships serve as valuable points of contact among employment administrations, both regional and national, and the social partners. They are also an important means of monitoring these cross-border employment areas, which are a key element in the development of a genuine European labour market AEBR (2012), p AEBR (2012), p The ESPON project GEOSPECS explored socio-cultural dividing lines along European borders and also looked at the particularly complex linguistic constellations that exist along borders (i.e. not only with respect to the official languages spoken). This led to a

42 42 Outlook on the period In the programming period , cross-border cooperation is expected to promote integrated regional development between neighbouring land and maritime border regions in order to contribute to the smart, sustainable and inclusive growth priorities of the Europe 2020 Strategy. If the various thematic objectives of the Common Provisions Regulation (CPR) and the related general and specific investment priorities as defined by the ERDF- and ETC-Regulations are considered together, then one can see that they are fully sufficient for promoting an effective development and integration of cross-border labour markets (see: Table 6). Table 6: Labour market-related provisions in the CPR, the ERDF- and the ETC-Regulations CPR, Article 9 Thematic Objectives (TO) TO 8: promoting sustainable and quality employment and supporting labour mobility ERDF-Regulation, Article 5 Investment Priorities (IP) IP 8(a) supporting the development of business incubators and investment support for self-employment, micro- enterprises and business creation; IP 8(b) supporting employment-friendly growth through the development of endogenous potential as part of a territorial strategy for specific areas, including the conversion of declining industrial regions and enhancement of accessibility to, and development of, specific natural and cultural resources; IP 8(c) supporting local development initiatives and aid for structures providing neighbourhood services to create jobs, where such actions are outside the scope of Regulation (EU) No 1304/2013 of the European Parliament and of the Council; IP 8(d) investing in infrastructure for employment services; ETC-Regulation, Article 7 (1) (a) Investment Priorities for crossborder cooperation (i) promoting sustainable and quality employment and supporting labour mobility by integrating cross-border labour markets, including cross-border mobility, joint local employment initiatives, information and advisory services and joint training; TO 10: investing in education, training and vocational training for skills and lifelong learning - (iii) investing in education, training and vocational training for skills and lifelong learning by developing and implementing joint education, vocational training and training schemes; classification with three types: (1) linguistic overlapping, which constitutes primarily a cross-border linguistic zone and often also a wider cultural transition zone; (2) hard linguistic demarcations that often closely follow the existing political borders in Europe; (3) linguistic islands, which are more common in South East Europe and other Third Countries immediately neighbouring the EU. See on this: ESPON (2012a), p

43 The case of the Greater Region : main features of the cross-border labour market and interventions supporting labour market integration Evolution, main features and future perspectives of the cross-border labour market The cross-border area Greater Region Saar-Lor-Lux- Rheinland-Pfalz-Wallonie (DE-LU-FR-BE) covers old internal EU-borders with a clearly above European average number of border-crossings per 100 km of border. Three different official languages are spoken in the Greater Region (German, French, Luxemburgish). Figures 3 & 4: The Greater Region and its wider context The Greater Region is, in a European perspective, mainly characterised by intermediate regions (i.e. in-between urban and rural) close to a city, and a few rural regions mainly on the Belgian side. The urban centres in the cross-border area are Luxembourg, Arlon, Metz, Nancy, Saarbrucken, Trier, Kaiserslautern, Liège and Namur. Furthermore, a number of cross-border agglomerations exist along several border segments of the Greater Region such as Athus-Longwy-Rodange (Pôle Européen de Développement) 103, Esch/Alzette-Villerupt and the area of Saarbrücken-Moselle-Est. The cities of the Greater Region are relatively near to main European urban agglomerations such as Paris and Brussels or the Rhein- Main and Rhein-Rhur Areas with Frankfurt and Cologne, which play a role both with regard to European and intercontinental accessibility (see: Figures 3 & 4). 104 Within the Greater Region, formal EU labour market integration and especially cross-border commuting is a reality for decades. All of the concerned Member States belong to the six EEC founding members which apply the Community principle of a free movement of workers since a long time: first on ground of the two transitional regimes of 1961 and 1964 (i.e. EEC-Regulations and Directives of 16 August 1961 and of 25 March 1964) and definitively since 1968 on ground of Council Regulation 1612/68. Cross-border workers in the Greater Region are defined from two completely independent viewpoints: the first is the social viewpoint which follows the definition in article 1(f) of EC Regulation 883/2004, while the second is the fiscal viewpoint derived from existing double taxation conventions which adds a specific geographical dimension (i.e. defined zone on either side of the border where commuters have to live and work). 103 The Pôle Européen de Développement, situated at the border between France, Luxembourg and Belgium, was created to manage industrial transition after the end of the mining industries. It forms a cross-border conurbation covering 22 municipalities in the 3 countries, with around 127,000 inhabitants. 104 INTERREG IVA Greater Region (2011), p.30; ESPON (2012b), p.12

44 44 Evolution and significance of cross-border commuter flows Cross-border commuting within the Greater Region had been relatively low during an early phase until the mid-1980s, but then started to increase continuously and rapidly during the 1990s and the next following decade up to around commuters in At date, the Greater Region shows the highest cross-border commuter flows in the EU 28 and most of these flows concentrate on the narrow cross-border metropolitan area around the Grand Duchy of Luxembourg. The geography of cross-border commuting in the Greater Region is complex (see: Figure 5) and the overall volume of flows is difficult to determine in overall terms. The latter is because the catchment area of the cross-border labour market is transgressing the formal territory of the Greater Region. In fact, some of its member regions also share borders with other neighbouring regions not belonging to the cooperation area but having mutual commuting flows. 106 Figure 5: Cross-border commuting flows in 2011 Source: Interregionalen Arbeitsmarktbeobachtungsstelle (2012), p. 84 If only the member countries and regions of the Greater Region are looked at, then it appears that commuting flows between them have increased from 135,120 in 2005 up to 160,590 in 2010 (see: Table 7). The Grand Duchy of Luxembourg is always the clear no.1 work destination of commuters and is also far ahead of Saarland which comes second in terms of the most important destinations. In 2010, Luxembourg accounted for 82 % of all in-commuting workers in the Grande Region and Saarland only for 12%. The large majority of all commuters in the Greater Region comes from Lorraine in France (65% in 2005 and 58% in 2010), followed by Wallonie in Belgium (17% in 2005 and 20% in 2010) and Rheinland-Pfalz in Germany (13% in 2005 and 17% in 2010). During 1960s, cross-border commuting to the Grand Duchy of Luxembourg was low but steadily increasing: only 3,700 persons from the three neighbouring countries Germany, France and Belgium were working in Luxembourg in 1961, but already 7,400 persons did so in In the following four decades, however, Luxembourg has experienced a very significant increase in the numbers of persons who cross the border to work in the Grand Duchy (see: Table 8). From 11,900 in 1980, the number of commuters rose to 16,900 in 1985 and represented at that time 10% of the total national workforce. The number of commuters further increased from 35,300 in 1990 up to 90,300 in 2000 and reached immediately before the financial crisis a 105 Interregionalen Arbeitsmarktbeobachtungsstelle (2012), p This is the case for the region Wallonie (BE), which borders several other regions in northern France (esp. Champagne-Ardenne and Nord Pas-de-Calais, but also Picardie), in the Netherlands and in Nordrhein-Westfalen. Also the German-speaking Community of Belgium has borders with the Netherlands and Nordrhein-Westfalen. Both, Wallonie and the German-speaking Community, are members of the trilateral Euregio Maas-Rhein (DE/NL/BE). Furthermore, also Rheinland-Pfalz has a border with northern Alsace (FR) that is covered by the Eurodistrict Regio PAMINA. 107 STATEC (2012), p.2

45 45 total of nearby 150,000 persons in The following economic crisis has only led to a very small reduction in the number of commuters in 2009, as already in 2010 the number of commuters continued to increase to 151,900 (corresponding to 44% of the total workforce) and reached a total of 159,100 commuters in Although Luxembourg is the second smallest country in the EU with respect to geographical size (2,586 km2) and total population (estimated 512,000 inhabitants in 2011), it is after Switzerland the country with the second highest number of cross-border in-commuters recorded in the European Economic Area (EEA). 108 Also a comparison to other cross-border metropolitan areas in the EU 28 shows that commuting is most developed in the Luxembourg cross-border metropolitan area (see: Box 5). 109 This high level of in-commuting also makes the Luxembourg labour market very unusual: crossborder workers from the three surrounding countries account for around 44% of the total national workforce, whereas the remaining of the workforce is composed of only 29% of Luxembourgish nationals and of immigrants (27%). 110 Box 5: Cross-border commuting in different cross-border metropolitan areas of the EU 28 For 2006, the ESPON project METROBORDER has established the following comparison of figures for cross-border workers: Luxembourg (127,000), Basel (49,000), Geneva (47,500), Nice-Monaco-Sanremo (34,000), Lille (27,500), Saarbrücken (21,500), Aachen-Liège-Maastricht (17,500), Copenhagen-Malmö (13,500), Strasbourg (6,000) and Vienna-Bratislava (1,000). Most of these cross-border metropolitan areas experienced positive annual growth in cross-border employees between 2000 and 2006, with the exception of Saarbrücken (-0.8%) and Strasbourg (-1.2%). The highest average annual growth can be observed in Copenhagen-Malmö (+26.5%), which can be explained by the opening of the Öresund Bridge in In Geneva (+9.0%), Luxembourg (+6.4%) and Lille (+5.9%), the number of crossborder workers is also growing rapidly and is at least twice as high as in the other metropolitan areas. In most cases, the distribution of cross-border workers by country of origin is extremely asymmetric. This is particularly true for the metropolitan areas of Luxembourg, Basel, Geneva, Nice, Saarbrücken, Copenhagen- Malmö and Strasbourg, where over 90% of the flows are moving in one direction. Two exceptions should be noted: in Lille and Aachen-Liège-Maastricht, the distribution between countries is more balanced. Luxembourg cross-border metropolitan area (shaded zone): Sources: METROBORDER project (ESPON 2010b, pp.38, 81-84) and GEOSPECS project (ESPON, 2012a, p.880) There is abundant and in-depth analysis which allows sketching out a general sociodemographic profile of commuters, both for the entire Greater Region and for the Luxembourg cross-border metropolitan area Banque Centrale du Luxembourg (2012), p ESPON (2010b), p CEPS/INSTEAD (2014), p e.g. CEPS/INSTEAD-STATEC-IGSS (2005); Interregionalen Arbeitsmarktbeobachtungsstelle (2005); Löh (2011); Interregionalen Arbeitsmarktbeobachtungsstelle (2012); Banque Centrale du Luxembourg (2012)

46 Table 7: Cross-border commuter flows within the Greater Region (2005 & 2010) Place of residence 2005 (total Greater Region: ) 2010 (total Greater Region: ) Place of work Rheinland- Luxembourg Rheinland- Saarland Lorraine Luxembourg Wallonie Saarland Lorraine Pfalz (1) Pfalz Wallonie Saarland (DE) Rheinland-Pfalz (DE) Lorraine (FR) n.a. (2) (2) (2) Luxembourg (LU) (3) (4) (5) Wallonie (BE) n.a n.a Total (place of residence) (1) Rounded figures. (2) Estimations. (3) For 2005 situation as of September and for 2010 situation as of end March. (4) Only Province of Luxembourg. (5) Whole of Wallonie. Source: Own calculations according to figures presented by Statistiques Grande Région. Accessible at Table 8: Cross-border workers employed in Luxembourg according to place of residence and nationality (in persons) Year Cross-border commuters (*), total & gender Total Men Women Place of residence of cross-border commuters BE FR DE Nationality of cross-border commuters BE FR DE IT LU PT Others (*) Cross border workers according to the definition of article 1 of EC Regulation no. 1408/71. Source: STATEC 2013, Luxembourg (date of publication: 28/10/2013). Data origin: Inspection Générale de la Sécurité Sociale. Accessible at :

47 Cross-border commuters in the entire Greater Region are mostly male (62 %), younger than the resident working population of their country of work (i.e. 68 % of the commuters are below an age of 45 compared to 55 % for the resident working population) and also slightly more qualified than the resident working population (i.e. 35 % of the commuters have a higher educational degree compared to 29 % for the resident working population). Commuters are also less frequently employed in part-time jobs (i.e. 91% of the commuters having a permanent work contract compared to 88 % for the resident working population) and also work more often in larger companies. 112 Cross-border commuters working in Luxembourg, more specifically, share many of the above-mentioned features: a majority of them is male with an average age of around 40 years and, regardless of the country of residence, has also a high level of education. Commuters are most often married (i.e. one fifth of the commuters are singles ) and the employment status of their partners varies across countries of residence. Almost all cross-border commuters working in Luxembourg are employees and have a permanent work contract, with a majority of them being employed in the services sector (2/3 of the jobs). The mode for commuter households from Belgium is that even the partner is a cross-border commuter (43%). In France and Germany, the mode is that one partner is a cross-border commuter, while the other is in employment in the country of residence. Still, in both countries a relevant fraction of partners are cross-border commuters, too. In France and Germany, 35% and 26% of partners commute to Luxembourg. The average and median commuting distance are 46.7 and 43.0 kilometres, with German commuters having a slightly longer median commute (47 km) than commuters from Belgium and France (40 km for both). 113 Factors stimulating or hindering cross-border labour mobility Cross-border commuting flows to the two most important workplace destinations within the Greater Region Luxembourg and Saarland are mostly in one way and the main factors influencing mobility are relatively similar. General factors stimulating cross-border labour mobility are the existence of a high number of unrestricted border crossings, short commuting distances, an ever improving information flow through networking and especially in the case of Luxembourg the generally strong economic attractiveness (e.g. dynamic financial sector of EU-wide relevance; comparative advantages in terms of tax regulations creating a favourable climate for enterprise location; high job creation rate and comparatively high wages etc.). 114 Differentials concerning net income wages are clearly acting as a pull factor in all neighbouring regions, while unemployment is acting as a push factor 115 mainly in the neighbouring French and Belgium regions where rates are clearly higher than in Luxembourg or on the German side. As regards the pull factor wages, however, an interesting anomaly is observed on the Luxembourg labour market already since a while: cross-border workers have lower wages than 112 Interregionalen Arbeitsmarktbeobachtungsstelle (2012), pp.86 & Banque Centrale du Luxembourg (2012), pp CEPS/INSTEAD (2014), p CEPS/INSTEAD-STATEC-IGSS (2005), ESPON (2012a),p.882

48 48 natives living in Luxembourg. 116 A recent study of 2014 concludes ( ) that the overall wage gap in favor of Luxembourgish nationals can mainly be explained by human capital differences and sorting of cross-border workers in lower-paying establishments but about a quarter of the initial wage gap cannot be accounted for by between-establishment differences. It is within firms that we turn to find potential sources of this remaining wage gap. ( ) We find that the share of commuters in the establishment, as well as the proportion of younger employees and higher educated employees puts some downward pressure on wages of commuters compared to those of nationals. ( ) This, however, does apparently not affect the overall relevance of the push factor wages for commuting because the study concluded that at this stage ( ) the data does not allow us to attribute this effect to either a discriminatory behavior of employers or alternatively to a wage bargaining strategy of commuters consisting in lowering their reservation wage in situations of high wage competition. 117 As regards the main factors still hindering cross-border labour mobility, it appears that in particular insufficient language skills are seen to be the main barrier within the multilingual and multicultural context of the Greater Region. To overcome this barrier, there is a need to boost public actions which will provide better training opportunities and more efficient educational system. 118 Closely connected to this are also culture-specific differences in the ways of perceiving, behaving and doing things. These aspects are often forgotten in many general analyses, but their relevance in the Greater Region was highlighted by an in-depth analysis especially of the Franco-Germanic differences. 119 The multi-lingual and multi-cultural work environment strongly affects the relations between commuters and their resident colleagues (i.e. enterprise-level social cohesion), the way of communicating and participating in day-to-day work processes (i.e. enterprise-level integration) and also their wider societal integration. Beyond this, there are many more obstacles and hurdles to mobility within the Greater Region which are mainly caused by cross-country regulatory differences (see: Box 6). 120 Box 6: Factors hampering cross-border commuting within the Greater Region Lack of information available in the worker s native language, especially for German workers in Luxembourg because some documents exist only in French language and also at the German/French border for workers from both sides. Recognition of diploma and lack of equivalent qualifications: risk of commuters to be employed at a lower level in comparison to a person having studies in the country. Initial vocational training and further training: apprentices cannot get training in an enterprise across the border (only possibility: employers pay training to centres of the trainee s country of origin). Traineeships across the border are also often hampered by legislation on social matters and security at work-place. Restrictive legislation on the place of residence (i.e. workers wishing to have a secondary residence for reducing their daily commuting distance are often not accepted for registration at the local administration). Registration formalities or fixed dates related to social legislation sometimes hamper the take up of part-time cross border work. Long delays for emitting specific administrative documents (e.g. unemployment forms are sent with delay from Luxembourg, hindering unemployed workers to get unemployment allocations in their home country) Hurdles relating to social legislation (e.g. non-recognition of invalidity certificates issued by another country; differences as regards the legally fixed age for retirement; specific conditions for pre-retirement in case of economic lay-offs; extinction of health care security coverage after the 52nd week in Luxembourg for persons having a recognition of incapacity to work; certain family-support benefits are linked to territorial residence; part-time cross 116 This wage gap was first documented, for men, in 1997 (on ground of 1995 Structure of Earnings Survey) with a difference at around 9% in favour of natives and confirmed in a later study of 2001 for both men and women. A further study of 2005 showed that the gap was larger for cross-border workers from France than for those from Belgium and Germany. CEPS/INSTEAD (2014), p CEPS/INSTEAD (2014), p ESPON (2012a), p Interregionalen Arbeitsmarktbeobachtungsstelle (2005), pp CRD EURES Lorraine (2011)

49 49 border workers risk losing their health insurance etc.) Hurdles relating to fiscal legislation (e.g. higher taxation of married couples; higher taxation of unmarried crossborder workers having children at care; fiscal deduction of mortgage interest rates etc.). Transport situation (e.g. toll on the French motorway between Metz-Saarbrücken; no direct train connection Luxembourg-Saarbrücken, only bus connection; traffic jams). Source: CRD EURES Lorraine (2011) Open labour markets, increasing commuting and territorial integration Open labour markets within the Greater Region and the high degree of cross-border commuting create a win-win constellation among the partner countries and regions and also strengthen the functional integration of the cross-border territory. At the same time, however, the high level of commuting induces new and partly unwanted side-effects which require further actions at all levels and also new cross-border initiatives to sustain the Greater Region s territorial integration in a much wider sense (i.e. achievement of equivalent living conditions, territorial balance and joint prosperity). The ESPON project METROBORDER analysed the level of cross-border functional integration by considering cross-border commuting together with other indicators (i.e. public transport, regional GDP, residents citizenship 121 ) and by approaching this overall process via the dimensions of interactions and convergence (see: Table 9). Table 9: Synthesis indicator for cross-border interactions and convergence Source: METROBORDER (ESPON, 2010, p.43) METROBORDER observed that the Greater Region is in a remarkable position and that, in comparison to other cross-border metropolitan areas in Europe, ( ) an extraordinarily high intensity of interactions can be seen. ( ) The second urban main destination for commuting in the Greater Region, Saarbrücken, ( ) is clearly different, but remains an example of interaction 121 The indicator of public transport infrastructure shows whether the planning authorities are aiming to facilitate and support interaction arising from economic opportunities or not. Indeed, political decisions are necessary to either create new public transport lines or support private transport companies. The interpretation of regional GDP on this scale is due to the data situation a sensitive issue. However, a certain trend can be observed of a high difference in regional GDP correlating with strong functional integration. Economically attractive places are the driving forces of cross-border interactions. At the same time, considerate must be borne in mind that GDP per inhabitant is strongly influenced by the high number of cross-border commuters. Finally, the indicator of citizenship illustrates to what extent residents have moved across national borders from the neighbouring countries. This indicates to what extent the border still plays the role of a barrier to the individual decision to move abroad. The reasons for such a choice vary the existence of language barriers, but also the overall quality of life, tax issues in relation to housing supply etc. obviously play an important role. ESPON (2010b), pp.43 & 44

50 50 and convergence. However, clear differences in terms of GDP can be found in all cases where crossborder commuting is a strong phenomenon. 122 Cross-border commuting creates benefits for the sending border areas that are more or less close to the main workplace destinations, because it helps to balance out demand and supply deficits on their regional and local labour markets. Especially in border areas which are still struggling with the structural adaptation of their regional/local economy, the attractive and close-by job-opportunities help to keep especially the young and qualified workforce living in the border regions which otherwise would permanently migrate away to other interesting workplace destinations in the domestic or international context. Still, there are also critical observations that relate to the highly asymmetric commuting flows within the Greater Region. A thematic publication of the Interregional Labour Market Observatory concluded that one cannot yet really speak of an integrated cross-border labour market which corresponds to the objectives of the European Union s Cohesion Policy. This will only be achieved if all regions are able to profit from a cross-border integrated labour market. 123 For Luxemburg, being the most important commuting destination within the Greater Region, cross-border workers have become an extremely important factor which sustains the dynamic development of the entire national economy. This becomes clear if a closer look is taken at the sector-specific relevance of commuter employment in Luxembourg (see: Annex 10). It appears that in many sectors cross-border workers already make up between 50 % and 62 % of the total workforce. Such high dependency levels are observed in the NACE-sectors C (manufacturing), N (administrative and support service activities), M (professional and scientific and technical activities), G (wholesale and retail trade & repair of motor vehicles and motorcycles), J (information and communication), K (financial and insurance activities), H (transportation and storage), F (construction) and E (water supply, sewerage, waste management and remediation activities). Furthermore, a recent working paper of the Luxemburgish Central Bank highlights that cross-border workers do also spend parts of their earnings in Luxembourg. Despite the significantly lower estimated average total net wealth of cross-border commuter households ( 240,000) in in comparison to that of Luxembourg resident households (exceeding 700,000), it is estimated for 2010 that each cross-border commuter household pours ( ) on average 9,300 per annum into the Luxembourg economy, representing about 17% of their gross household income from Luxembourg. 124 One of the most important and widely noticed side-effects of daily commuting are the ever increasing traffic flows especially within the Luxembourg cross-border metropolitan area. This is because cross-border commuters predominantly arrive by car: for ( ) an estimated 80% of cross-border commuters, it represents the sole mode of transport ( ) and ( ) the respective share for commuters from Belgium, France, and Germany are 82%, 76% and 87%. 16% are estimated to use both car and public transport and a low 4% use public transport only. 125 This results in a saturation of the road networks and regularly cause traffic jams which lead to economic losses (e.g. increased commuting times, reduced fluidity of intra-regional and international transit traffics between northern and southern Europe), increased pollution on the most frequented corridors and a deterioration of the living environment in agglomerations around Luxembourg City. This obviously creates an important need for developing a more 122 ESPON (2010b), pp.43 & Interregionalen Arbeitsmarktbeobachtungsstelle (2005), p Banque Centrale du Luxembourg (2012), p Banque Centrale du Luxembourg (2012), pp.8-10

51 51 sustainable pattern of mobility in the most affected parts of the Greater Regions. This can partly be addressed through domestic policy measures, but most often requires new joint initiatives especially in the field of cross-border public transport. The METROBORDER project indeed considers the bilateral agreement between Lorraine and Luxembourg or the currently elaborated bilateral mobility concept between the Saarland/Rhineland-Palatinate and Luxembourg as path-breaking, but at the same time it also observes that a multilateral Greater Region mobility concept is overdue because addressing all these challenges on the bi-national level, seems not to be efficient. 126 Other developments induced by the high level of cross-border commuting are the emergence of new residential movements. Between 1994 and 2010, one can observe an increasing densification of commuters having taking their place of residence in the immediate cross-border zone around Luxembourg (see: Annex 11). 127 The main reason underlying these movements is that many cross-border workers try to reduce travel time (and therefore cost) to their place of work in Luxembourg City and therefore tend to locate their place of residence near the border. Another more recent trend is that households which were living and working in Luxembourg decide to permanently migrate to a neighbouring region across the border, while keeping their job in Luxembourg. The main motivation for this phenomenon of residential escape is the fact that housing is still significantly cheaper in the neighbouring countries than in Luxembourg, thus making it possible for some migrating households to get access to ownership. In Luxembourg, this residential escape concerned a total of 7,700 people between 2001 and and the flow is still increasing. Similar and also significant residential movements are already observed since a while along the German-French border of the Greater Region (esp. Germans living in Lorraine), although the motives are slightly different here. These border-crossing residential movements also induce a need for action at a very local policy-level, if already visible trends of residential ghettoization are to be overcome and if a full social integration of the newcomers is to be achieved. Finally, both of these residential movements have especially in the neighbouring municipalities and counties across the border to Luxembourg contributed to a further increase of rents, prices for houses to buy and prices for building land. One example is Trier and the surrounding county of Trier-Saarburg, where building land prices continued to develop above the Land-average since 2000 and reached a significantly higher level in 2011, with also a strong increase in the number of buyers from Luxembourg between 2005 and Similar developments can also be observed in other parts of the German border zone along the river Mosel and the smaller borer zone of Saarland, in many border-close zones of Lorraine and to a lesser extent also in Belgium (see: Annex 12). Closely linked to the new border-crossing residential movements is the emergence of atypical cross-border commuter flows, which are a noteworthy characteristic of commuting in the Greater Region. They started to develop already in the 1990s especially at the border between Germany and France. The numbers of Germans living in Loraine but working in Saarland increased from around 4,300 (1995) to 6,000 (2001) and up to a little less than 6,500 in 2011, whereas such a-typical commuting to Rheinland-Pfalz is comparatively low in overall terms (varying between 750 and around 1,000 in the period ). 130 A recent but also more dynamic development is observed for Luxembourg, where the phenomenon of residential 126 Interregionalen Arbeitsmarktbeobachtungsstelle (2005), pp ; CEPS/INSTEAD (2012), pp.8 & 9; ESPON (2012a), pp.886 & 887; ESPON (2010b), p.168; 127 Source: CEPS/INSTEAD (2012), pp.8 & ESPON (2012a),p Rheinland-Pfalz (2013), pp Interregionalen Arbeitsmarktbeobachtungsstelle (2012), p

52 52 escape has made Luxembourgish citizens to become in-commuting nationals. Their number steadily increased from 1,200 in 2001 to 3,900 in 2012 (see: Table 8) and it can also realistically be assumed that many of the in-commuting workers with Portuguese and Italian nationality belong to these a-typical cross-border commuters. 131 Most of these a-typical crossborder commuters are living in Germany (50.2 % in 2011), while relatively equal shares are also living in France (25.1 %) and Belgium (24.6 %). 132 Intense cross-border commuting can also have effects on the society in the country of work, although commuters usually leave their place of work and return back home across the border. This has been examined for the case of Luxembourg, where cross-border workers have become an indispensable resource and are present for the resident population in nearby all aspects of everyday life (i.e. shopping, leisure, work, public services, health care etc.). The phenomenon of cross-border workers is addressed in domestic discourses of the Luxembourg resident population under different prefixes which indicate a certain ambivalent representation in their regard. It appears that the Luxembourgish society generally perceives cross-border commuters by ways of differentness and familiarity both in socio-economic and socio-cultural terms (with positive and negative perceptions 133 ), albeit with strong variations between the different population strata. 134 Demographic change and labour market impact in the Greater Region For the past population development in the Greater Region, two major demographic trends are observed: a period of continuing stagnation from 1970 until 1987, followed by a period of overall demographic growth until the present day which is mainly supported by immigration particularly in Luxembourg and to a lesser degree by population growth in Rheinland-Pfalz and the Wallonie region (see: Figure 6). Especially Luxembourg has experienced strong demographic growth since the mid-1980s (see: Map 12), which is mainly due to the attractiveness of its knowledgeintensive oriented economy. Lorraine population has stagnated and a clear demographic decline can be observed in Saarland since the mid-1990s, which is due to the deindustrialisation process that is taking place in those regions. 135 Figure 6: Population development in the Greater Region Source: Statistical offices of the Greater Region Many of those might have previously lived and worked in Luxembourg, but decided to move across the borders due to lower living and housing cost there (i.e. despite the observed increase of real estate prices across-borders, the cost is still lower than in Luxembourg). 132 Interregionalen Arbeitsmarktbeobachtungsstelle (2012), p i.e. Positive perception: commuters are a necessity for the Luxemburgish economy (87%); commuters are enriching the country s culture (55%). Negative: commuters are competitors on the labour market (34%); commuters threaten the Luxemburgish language being one of the most important factors for national identity (57%). 134 Wille (2011) 135 ESPON (2012a),p

53 53 The population of the Greater Region is also experiencing a gradual ageing, as the share of those aged 60 and over accounted for 24 % in 2008 and 22% in This trend is less pronounced in Luxembourg than in the other parts of the Greater Region. In 2008, the percentage of population aged 80 or more in Luxembourg was 3.6 % which is much smaller than in neighbouring regions Saarland (5.5%), Rheinland-Pfalz (5.4%), Wallonie (4.7%) and Lorraine (4.5%). Nevertheless, the case of Luxembourg is specific due to the large foreign resident population, having a fertility rate higher than that of the citizens of Luxembourg. 136 Map 13: Population development in the Luxembourg crossborder metropolitan area Source: GEOSPECS project (ESPON, 2012a, p. 593). Demographic change will also in the future strongly affect the regional labour markets in the Greater Region and thus the cross-border labour market as a whole. Long-term projections for the evolution of the working-age population (i.e. those aged 20 to less than 60) until 2060 suggest a clear increase in Luxembourg until 2050 and then stagnation during the following decade. In all other areas of the Greater Region, however, the working-age population will decrease and both Saarland and Rheinland-Pfalz are clearly standing out with the most significant negative development (see: Figure 7). These area-specific trends also affect the Greater Region s overall working age population, which is expected to decrease from 54.3 % in 2010 over 51.5 % in 2020 to 48 % in Figure 7: Long-term projection for the working-age population in the Greater Region ( ) Source: Statistical offices of the Greater Region ESPON (2012a),p Interregionalen Arbeitsmarktbeobachtungsstelle (2012), p

54 54 A further aging of the working population and a growing scarcity of labour force, especially of skilled workers and young professionals, can create medium-term threats in the Greater Region, especially if the strong one-way commuting flows prevail. Most affected will be the sending areas, because in particular the young and qualified labour force will continue to be attracted by the more dynamic development in Luxembourg. What is this therefore needed in the future is a better pro-active management of labour supply and demand on the local labour markets close to the border and also cross-border measures that help territorial development effects to emerge on both sides of the border (i.e. labour market policy, training and qualification). 140 These earlier reflections of the Interregional Labour Market Observatory are complemented by the conclusions of its most recent report: a coverage of the Greater Region s future workforce will not only require necessary gains from further immigration, but also an increasing mobilisation of resident person groups that are until now under-represented on the labour markets (e.g. integration of jobless young people; stronger qualification of women, migrants and the older generation) Cross-border interventions supporting labour market integration in the Greater Region ( ) Already long before the start of INTERREG, but in particular since the very dynamic evolution of commuting, a number of specific cross-border cooperation networks and structures were set up in the Greater Region which also deal with different aspects relating to the cross-border labour market (see: Box 7): these are the Conseil Syndical Interrégional Sarre-Lor-Lux (CSI), the InterRégionale Syndicale des Trois Frontières (IRS), the Comité économique et social de la Grande Région (CESGR), the Observatoire Interrégional du marché de l Emploi (OIE) and the Plate-forme syndicale de la Grande Région (PSGR). In addition, also two trilateral EURES cross-border partnerships exist today in the Greater Region. The EURES-Transfrontalier PED for the tree-countries border area of the Pôle Européen de Développement (FR-LU-BE) was formally established in It built on an earlier Social Counselling Office ( Euroguichet Social ) that was promoted and run by the trilateral cross-border trade union association IRS already since The trilateral EURES- Transfrontalier Saar-Lor-Lux-Rheinland-Pfalz (DE-FR-LU) was formally established in 1997, but it was the result of a further widening of the bilateral EURES Lothringen-Saarland that was established already in February Today, both EURES cross-border partnerships support cross-border labour mobility through a provision of information about the living and working conditions in the partner countries and regions, promote the exchange of information on supply and demand on the cross-border labour market and help in placing people into employment. 142 These structures, networks and partnerships can altogether be considered a sort of institutional backbone which helps to sustain and further develop the cross-border labour market integration process in the Greater Region. With the start of EU-funded European Territorial Cooperation in 1991, also the up to now four generations of cross-border INTERREG and ETC-programmes ( , , 140 Interregionalen Arbeitsmarktbeobachtungsstelle (2005), pp. 78 & Interregionalen Arbeitsmarktbeobachtungsstelle (2012), pp. 19 & Europäische Kommission (1998)

55 , ) provided complementary support to enhance the development and further integration of the cross-border labour market within the Greater Region. Box 7: Cooperation networks & structures in the field of cross-border labour market Conseil Syndical Interrégional Sarre-Lor-Lux (CSI): The CSI was founded in Saarbrücken already in It was the first of the now 33 CSIs that exist throughout Europe and its main mission was and still is to represent the social, economic and cultural interests of workers. InterRégionale Syndicale des Trois Frontières (IRS): The IRS was set up in 1987 for the trilateral border zone between France, Belgium and Luxembourg that covers the Pôle Européen de Développement (PED). The IRS is directly involved with counsellors in the EURES-partnership PED and thus helps to promote the mobility of workers in this part of the Greater Region. It also acts, through its publications and daily actions, as watchdog for the respect of the workers social rights and their living and working conditions. Comité économique et social de la Grande Région (CESGR): The Committee was set up in 1997 and the Greater Region is the only cross-border region in Europe disposing of such a structure. The CESGR is today an independent consultative institution of the Summit of the Executives of the Greater Region. The CESGR issues resolutions on matters related to economic, social and cultural development of the Greater Region (many of which address aspects of the cross-border labour market), suggests working themes to the Summit of the Executives which should be addressed, periodically reports to the Summit and has as one positive example of its work - also initiated the establishment of an interregional labour market observatory for the Greater Region (see below). Observatoire Interrégional du marché de l Emploi (OIE): The OIE was established after the 4th Summit of the Executives of the Greater Region in 1998 and its objectives were defined more closely at the 5th Summit in It is a cross-border diagnosis system for the socio-economic development of the Greater Region and prepares comparative and concrete information about the cross-border labour market in order to support political decision takers to draw conclusions in the field of structural and employment policies. Plate-forme syndicale de la Grande Région (PSGR): In 2002, the platform was created and regroups member organisations of the European Trade Union Confederation (ETUC) that are active in the member areas of the Greater Region. Source: Website of the Greater Region: From INTERREG I to INTERREG III ( ) During the first three generations of INTERREG ( , , ), larger parts of the Greater Region s formal cooperation area were always covered by three separate INTERREG-programmes: the bilateral programmes Lorraine-West Pfalz / Saarland (DE-FR) and Germany-Luxembourg as well as the trilateral FR-LU-BE programme Pôle Européen de Développement (PED). During the INTERREG I period ( ), one can observe that significant Community support for social interventions and thus also labour market actions - was only foreseen under the Saar-Lor-Westpfalz programme (19.9% of the total programme support). The other two programmes focused their interventions mainly on the fields of environment (DE-LU, FR-LU-BE) and enterprise development (FR-LU-BE). 143 The focus of the latter programmes was somewhat astonishing, because in the same period the number of commuters to Luxembourg increased from 35,300 in 1990 to already 48,700 in European Commission, DG XVI (1993)

56 56 The above situation clearly changed during the INTERREG II period ( ), because all three programmes now supported measures in the field of labour market development. However, the intensity and success of those measures was highly variable across the three programmes. 144 The INTERREG IIA programme Pôle Européen de Développement dedicated around 15 % of the total Community support to an improvement of human resources (axis 2, only ESF) in order to enhance the cooperation area s necessary diversification process. The support helped to provide enterprise-focused opportunities for further training in the field of RTD and innovation for blue and white collar employees (in total 292 beneficiaries) as well as other training activities of the Centre Européen de Technologie (CET) which supported the acquisition of new skills in the field of knowledge-based economy that were dedicated to a variety of different target groups. In total 12,516 persons had benefitted from this cross-border training offers, of which 24 % came from Belgium and 65 % from France and 11 % from Luxembourg. This set of measures was innovative and also allowed a broad spectrum of person groups to access these offers. 145 The INTERREG IIA programme Germany-Luxembourg did initially foresee 9.7 % of the programme support for qualification and university co-operation (axis 4), but towards the end of the period only 6.4 % had been spent (2000/2001). The improvement of structures to promote cross-border labour mobility was not fully reached (i.e. the information office for cross-border workers was not realised) and also actions for a labour-market integration of specific target groups was also not fully reached since a project to support women had no good resonance. However, improvements of training and education were noticed in the field of further training for enterprise personnel (i.e. set up of new joint structures esp. in the field of trade) and also more transparency on skills enhancement was reached. The INTERREG IIA programme Saar-Lor-Westpfalz dedicated around 4 % of the total Community support to a promotion of employment (ERDF: 0.4 %) and vocational training (ESF: 3.5 %). The employment measures aimed to provide information to crossborder workers but only one project was supported that created a cross-border newspaper in the field of economy. The extent to which the functioning of the crossborder labour market was improved has thus been very low, since no advice centres for cross-border workers had been created. Support under the vocational training measures was quite successful and aimed at joint skills enhancement and at supporting an exchange of trainees. One project created a central exchange office in the field of vocational training, which realised 59 exchanges with 714 participants. The certificates acquired by the participants were also recognised on both sides of the border. During the INTERREG III period , the three cross-border programmes were active in the field of cross-border labour market, training and education and could realise a number of innovative projects. 146 The INTERREG IIIA programme WLL (Wallonie-Lorraine-Luxembourg) was the most active programme and realised a larger number of projects which furthered the 144 The following information is drawn from the in-depth programme-level assessments that were realised under the Commission s ex-post evaluation of the INTERREG II Community Initiative. (LRDP, 2003) 145 i.e. enterprise personnel (22%), job-seekers (20%), students in higher education cycles (38%), researchers (1%), teaching personnel (8%) and civil society representatives (11%). 146 INTERREG IVA Greater Region (2011), p.28

57 57 development and integration of the cross-border labour market. These were mainly supported under programme axis 2 creation and development of a cross-border integrated economic area, but punctually also under axis 4 valorization of human resources, social and cultural integration (see: Box 8). 147 Altogether, the most relevant projects amounted to around 8.7 % of the total ERDF-support for this programme. 148 The INTERREG IIIA programme DELUX, covering Luxembourg and parts of Rheinalnd-Pfalz and Saarland in Germany as well as the German-speaking Community of Belgium, dedicated around 8.4 % of the total programme support (app of million) to measure 4.1 on a cross-border integration of the labour market and education (axis 4). The programme supported two projects, one of which was a webmobile for youth information, advice and job counselling (see: Box 8). 149 The INTERREG IIIA programme SMWL (Saarland-Moselle-Lorraine-Westpfalz) supported actions that furthered an integration of the cross-border labour market under measure 1.3. The main focus was put on improving knowledge of the neighbouring country s language (being one of the main obstacles on the cross-border labour market), ongoing vocational training, integration into employment and higher education. 150 Three projects were supported with around 3.7 million of ERDF support (i.e. 1.5 % of the total ERDF support): two projects focused on a cross-border exchange of primary school educational personnel to improve their language skills and the third on supporting a cross-border working group which focused on establishing a cross-border training scheme for administration and management in the field of health economy. 151 Box 8: Project examples from the period INTERREG IIIA programme WLL (BE-FR-LU): The projects supported under programme axis 2 realised a linking of engineering schools (professors and students) and companies in the field of thermography, a module-based continuous training scheme for multimedia-jobs, an improvement of workplace security in enterprises, a networking of educational institutions, technical universities and other competence centres (Collège Européen de Technologie), a tool helping to orientate potentials and offers of educational institutions towards the needs on the labour market (Abilitic-project) and the set-up of a cross-border network for information and training of enterprises active in the field of environmental management (RIFE-project). Under axis 2, a web-based database on existing frameconventions for wages was elaborated to inform workers in the cross-border zone and a project on youth information for a cross-border job orientation was realised. The INTERREG IIIA programme DELUX (DE-LU-BE): The project Mobile Jugendinformation, Jugendberatung und Jugendberufshilfe put into place a web-mobile for youth information, advice and job counselling, which allowed youth advisors to move within the border region in order to reach young people directly. The web-mobile is a specially adapted truck giving room for 12 persons, which is equipped with 6 PCs and thematic documentation or other information material. Through access to the web-portal Jobonline, young people could also get information on job orientation, traineeship, au-pair possibilities and job opportunities in the cross-border area. Also a specific gender team was connected to this mobile information offer. Sources: EuRegio SaarLorLux+ (2010), pp.14-25; EuRegio SaarLorLux+ (2010), pp Relevant projects under axis 1 amounted to a total cost of 3.5 million (app of ERDF or around 7% of the total ERDF support), while the two supported projects under axis 2 amounted to a total cost of 853,560 (app. 427,000 of ERDF or around 1.7% of the total ERDF support) INTERREG IIIA-OP FR-DE (2000), pp EuRegio SaarLorLux+ (2010), p.8

58 58 The ETC-programme Greater Region ( ) For this programing period, a single programme for the entire Greater Region was established. It supported labour market relevant actions mainly under core area 2 ( Enhancing and promoting the competitiveness of the interregional economy, supporting innovations and promoting the job market ) and core area 3 ( Supporting the acquisition and dissemination of knowledge, using cultural resources and strengthening social cohesion ). The related measures mobilised around 13 % of the total ERDF support dedicated to the programme s three thematic core areas in order to address challenges emerging from further increasing commuter flows, a growing labour market impact of demographic change and the intended development of the Greater Region towards a knowledge-based society. 152 Measure 1.4 ( Development of cross-border employment ) aimed at increasing the transparency and complementarity of the labour markets in order to achieve a greater and more diversified labour offer, a more flexible and market-oriented adaptation of the labour demand and a better integration of unemployed persons into the cross-border labour market through qualification. 153 A total of 7 projects were supported with around 3.58 million of ERDF funding, which corresponds to 3.5% of the total ERDF support dedicated to the programme s three thematic core areas (see: Box 9). 154 Measure 3.1 ( Cooperation in the field of education and further education ) aimed at developing cross-border cooperation among training institutions and institutions of further education with a view to better coordinate and upgrade the relevant offers. 155 This measure supported a larger number of projects (see: Box 9) with around million of ERDF support, which corresponds to 9.8 % of the total ERDF support dedicated to the three thematic core areas. 156 Box 9: Labour market-related projects Measure 1.4 supported two strategic projects aimed at improving the functioning of the cross-border labour market and five theme-specific projects focusing on cross-border education and training. The strategic project Task Force Commuters involved mainly institutional policy actors and aimed at planning and establishing a task force that will develop legal and political solutions for persisting obstacles that commuters and businesses still face on the cross-border labour market (i.e. in the fields of employment, educational, social and tax law). The project OPTI-MATCH involved some of the established labour market relevant cross-border structures and networks (EURES, Observatory) and aimed at improving through targeted cross-border analyses job matching processes on the labour market of the Greater Region. Some theme-specific projects supported an improvement of the potentials and offers of educational institutions through an early detection of needs on the labour market ( Abilitic2Perform ) or helped specific target groups to integrate into the cross-border labour market (e.g. creation of a German-French school of the 2nd chance for non-qualified young people; KIWI connecting youth and young adults, women or migrants to cross-border job opportunities in specific sectors). Other theme-specific projects addressed managers and decision-takers of SMEs to build up their competences for better using the potential of the cross-border labour market ( ACTION Saar Lorraine ) or had a more sector-specific focus ( ECOTRANSFAIRE on ecological building). Most of the labour-market relevant projects under measure 3.1 established cross-border networks in the field of training, further education or job orientation either with a general character or with a particular focus on specific 152 INTERREG IVA Greater Region, p INTERREG IVA Greater Region, p INTERREG IVA Greater Region, p

59 59 sectors (esp. health & social care) and person groups (esp. youth and young adults). Examples are the project Cooperation between the vocational training institutions in Saarburg (DE) and Sarrebourg (FR), which focused on establishing a closer practical cooperation and networking between educational personnel and pupils from both institutions; the project Trilingua which also supported network-building among further education institutions for primary-level educational personnel (virtual academy); the EDUNET-network between educational institutions/further education institutions and economic partners; the FCU-network on university-focused further training in connection with the economy; the project IWAP which has set-up a cross-border academy for further training in the field of palliativecare and the definition of joint qualification standards to facilitate a cross-border employment of care personnel; the network SOPHIA-Lorraine on further training in the field of social care; the project on Home Care which focussed on employment and training and addressed non-profit organisations active in this sector; the network EDUDORA 2 which focused on further training for care personnel in the field of diabetes and obesity; the project Life planning with the Greater Region, which supported also non-formal job-orientation and job integration activities for young people by raising their awareness about the chances that exist in the Greater Region; the project Cross-border school of second chance (E2C) which supported job integration of insufficiently qualified young adults. Source: INTERREG IVA Greater Region (2013), pp.1-49

60 The case of Italy-Slovenia : main features of the cross-border labour market and interventions supporting labour market integration Evolution, main features and future perspectives of the cross-border labour market The Italy-Slovenia (IT-SI) cooperation area covers a border that for a long time has been an external EU-border and only became more recently a new internal EU-border (see: Map 14). This border used to be one of the most tossed about and wrangled areas in all Europe. Map 14: The Italy-Slovenia cross-border cooperation area In a European perspective, the programme area mainly comprises intermediate and rural regions. 157 The programme area comprises a few urban areas situated on the Italian side of the border e.g. Trieste, Venice and Ravenna. The programme area has an above average number of border crossings per 100 km border. Indeed, 68% of the Slovenians and 53% of the Italians living along the border are crossing it at least once a week and their motives vary: family or friends visit, leisure activities, grocery, etc Work is one of these reasons. However, cross-border commuting is only one aspect of labour market integration. The long-term evolution of labour market between Italy and Slovenia has been heavily influenced by historical processes on the one hand (i.e. fall of the Austro-Hungarian Empire, fall of the Iron Curtain and transition period) and EU Regulations and Directives on the other. Since the entry of Slovenia into the European Union (2004) and its entry to the Schengen area (2007), access restrictions for Slovenian workers to the Italian labour market were lifted in July Even if the free movements of workers from the EU-8 member states incl. Slovenia to the Italian job market is only granted since then, movements between both countries have long taken place. Commuter flows across the border Little data is available on a cross-border labour market. This new internal EU border was shifted several times during the 19 th century. Under the multi-ethnic Austro- Hungarian Empire, the region of Venezia Giulia and Slovenia were united, and their destinies were different from those of Friuli and Veneto. At the end of the First World War Slovenia was integrated into Yugoslavia, while the region of Venezia Giulia was annexed to Italy. These borders were put into question again during the Second World War and, after years of impasse, they were only 157 According to the ESPON 2013 EDORA project, intermediate regions are defined as those in which between 15% and 50% live in rural local units while predominantly rural regions have more than 50% of their population living in rural local units.

61 61 normalised in the seventies with the Treaty of Osimo (1975). The turbulent history of this area is still visible today e.g. in the place names. The most glaring example is Gorizia, which partitioning in 1947 gave rise to two administrative units the province of Gorizia in Italy and the statistical region of Goriška in Slovenia - with respectively Gorizia and Nova Gorica as regional capital cities. This east-west shifting of the border line has not been without consequences for the local population. Respect for minorities was not always granted, however Slovenian minorities in Italy and Italian minorities in Slovenia subsisted, so that, after WW2, the border zone became the place of an original national minorities crisscrossing. 158 Slovenian minorities are mainly dwelling in the Italian provinces of Udine, Gorizia and Trieste, while the Italian minorities in Slovenia concern the three municipalities constituting the Slovenian Adriatic area i.e. Koper, Izola and Piran (see: Map 15). However, figures show a less bright picture of this national minorities crisscrossing: Trieste, which had 29.8% of Slovenes in 1910 had not more than 10% in 2002, while Koper was 18.5% Slovenian in 1910 and 82.4% in In Italy an assimilation process is rather observed e.g. through the language with only one out of two children being talked to by its parents in Slovenian. In Slovenia, the situation is rather different. Article 64 of the Constitution grants the Italian minority special rights within its historical territory e.g. bilingual public services, own media and schools as well as an own MP in the national parliament in Ljubljana. The 1947 partitioning Map 15: Municipalities with Slovene-speaking people in Italy and with Italian-speaking population in Slovenia Source: Sanguin and Berta (2003), p.368 was satisfying neither for the Slovenians, whose access to the two regional capital cities of Trieste and Gorizia was hindered, nor for the Italians, which main capital cities quickly declined when cut off from their Slovenian hinterland and surroundings. Due to this and to persisting local minorities, arrangements were made to make the border more porous and finally local relationship remained e.g. already in 1949 for local trade and agriculture, extended in Even though geographical mobility of workers was lower within Slovenia and Eastern European countries in general than in other OECD countries, 160 worker flows existed already in the sixties, as the border of Yugoslavia gradually opened to allow the Yugoslavs to work in Western Europe. Since then, local commuter flows between Slovenia and Italy persisted over time and even got larger as Slovenia became an EU Member State in The EU-enlargement of 2004 lifted access restrictions for Slovenian workers to the Italian labour market in 2006, and the entry of Slovenia to the Schengen area (2007) eased cross-border commuter flows. A report to the EU Commission noted that mobility in cross-border regions between old and new EU member states is notably higher, for instance ( ) 10,000 [persons 158 Sanguin/Berta (2003), pp Sanguin/Berta (2003), p Vodopivec/Hribar-Milic (1993), p.43

62 62 commuted from] Slovenia to Italy in 2006/2007. [ ]. Indeed, Slovenia has high ratios of outcommuters: 6.7 out-commuters per inhabitants. 161 Generally the scale of cross-border commuting in the EU has tended to increase over time, ( ) by around 10% between 2007 and 2010 and up until 56% in in EU-12 countries. ( ) The economic recession which followed the financial crisis seems to have had the effect of slowing down the growth of cross-border commuting. However, in a few countries incl. Slovenia the proportion of those in employment working in another country over the three years continued to rise, even sharper as before the crisis. 162 In Slovenia, cross-border commuters are rather older almost 40% of crossborder commuters were aged 50 or over and low skilled. Furthermore, women working in sales and services jobs represent just under the half of the total number of workers commuting abroad. This proportion is around four times larger than the national rates. Cultural elements of connection and transformation of border regions such as the comparability of social systems, the harmonization of the social and economic structures, a sufficiently high degree of spatial and social mobility of the borderland population, inclusion in international traffic and economic flows, the presence of a modern transportation network but also beforementioned cultural factors, including a positive attitude towards one's neighbours and bilingualism on both sides of the border, have been very prominent on the Italo-Slovenian border. Bufon therefore concluded that formerly neglected "border" communities and national minorities perform[ed] their "natural" role as cultural and economic integrators of neighbouring countries and thereby [became] an important factor in regional development. It is widely recognised among the scientific community that Italian and Slovenian minorities were determinant in stimulating and taking forward cross-border cooperation, especially where they are able to develop their "natural" intermediation role. 164 Factors stimulating or hindering cross-border labour mobility Cross-border labour mobility occurs mainly unidirectional: from Slovenia to Italy. The presence of local minorities coupled with the language factor, border-crossing possibilities, and wage differentials are drivers of labour mobility for Slovenians willing to cross the border. Minorities Slovenian minority in Italy and Italian minority in Slovenia maintain a strong role in cultural exchange and promotion of the language, with schools in their language, strong cultural and sports organisations and exchanges. Because of bilingualism, they could act as strong vehicles for cross-border cooperation. 165 As a matter of fact, ( ) ethnicities ( ) present in this (cross-border) area are not confined to their respective national States: the whole territory is characterised by considerable ethnic diversity and inter-coexistence. 166 Coupled with strong cultural links, border-crossing possibilities substantially improved in December 2007 when Slovenia entered the Schengen area. Since then, the number of bordercrossing possibilities greatly improved, especially in the more urban areas. There is less physical cooperation in the Julian Alps in the North of the programme area due to mountainous terrain European Commission, DG Employment and Social Affairs (2009), p. VII 162 European Commission, DG Employment, Social Affairs and Equal Opportunities (2011), p European Commission, DG Employment, Social Affairs and Equal Opportunities (2011), p Bufon (1994) 165 Panteia Oikos (2010), p Lipott (2013), pp Idem, p.60

63 63 Wages differential too is stimulating cross-border labour mobility. As observed by the ESPON Metroborder project, economically attractive places are the driving forces of cross-border interactions. [ ] In general terms, this can be seen as providing evidence for the argument that differences are the driving force of cross-border interactions, as they can be exploited by actors in complementary ways. The question of who profits most and who does not profit remains a sensitive issue. In its SWOT analysis the Community Initiative Programme (CIP) mentioned indeed that the transfer of work force is one sided because of the high inequality of wages.( ) In 2004, wage levels converted at market exchange rates [were] 54% of the EU-15 average in Slovenia ( ) At PPP exchange rates, the degree of wage convergence is larger, but the difference is still substantial ( ) Per capita income levels in PPP range from 44% of the EU-15 average in Latvia to 74% in Slovenia. 168 Even if Slovenia has the smallest difference compared to other EU-8 countries, incomes difference still work as a pull effect i.e. attraction of the markets of destination. Obstacles to a stronger cross-border labour mobility between Italy and Slovenia were also mentioned in a 2009 report to the European Commission on the mobility of cross-border workers within the EU-27/EEA/EFTA countries. 169 Barriers to labour mobility were analysed on a qualitative basis, allowing a particular focus on newcomers. Four main obstacles have been stated by the experts for the Italy-Slovenia cross-border area (see: Box 10). Box 10: Factor hampering cross-border commuting between Italy and Slovenia Recognition of diplomas, since Italian and Slovenian education systems are very different. Very long administrative procedures for recognition, which does not speed up in case a person has a job offer. Risk of commuters to be employed at a lower level in comparison to a person having studied in the country, in particular in the sanitary/medical sector. Differences in tax systems, with no specific regulations for cross-border workers. Long waiting time in case of credit with the public authority. Lack of information on the legal framework available for workers and employers, which reinforce the illegal labour market. Hurdles relating to social legislation e.g. concerning the rights to pension in case of legal cross-border mobility particularly affect Slovenian women (i.e. pensioners in their country, these women cannot help but work illegally in Italy for keeping the pension they are receiving from the Slovenian State. Mentality is an obstacle to cross-border commuting from Italy to Slovenia since the country always had outcommuters, mainly low educated. Therefore people hardly imagine that Slovenia could also attract labour force from abroad. Source: European Commission, DG Employment and Social Affairs (2009) 168 ECB (2006), p European Commission, DG Employment and Social Affairs (2009).

64 64 It shall also be underlined that both employment rates and crossborder infrastructure have a very limited influence on cross-border mobility between Italy and Slovenia. Indeed, cross-border regions have higher rates compared to both their respective national averages and the EU-level (see: Figure). In a European perspective, most parts of the programme area have about average EU multimodal accessibility. The travel time to the border by road is particularly good, especially on the Italian side. Accessibility is only low up in the north, in the province of Udine and in the region of Goriška and Gorenjska covering the Julian Alps. Figure 8: Employment rate 2010 within the CBC Italy Slovenia Source: ESPON TerrEvi project, 2013 In 2006, Jean-Claude Trichet, then President of the ECB, called for all remaining barriers to be removed, including those related to labour mobility. 170 In other words, labour market mobility should be enabled for improving the match between labour market needs and skills. 171 Data and further information from the Migrant Integration Policy Index (see: Annex 13) 172 show both countries have a medium position in this international ranking of countries integration policies. Regarding in particular labour market mobility, Slovenia has halfway favourable policies, while Italy applies slightly favourable domestic policies. These policies also reflect on both countries readiness to welcome workers from abroad. Such halfway to slightly favourable policies challenge the will to deal with labour market integration in a transnational perspective, also in the context of the macroregional strategies i.e. EUSAIR and the future EUSALP. The role of policies has been further explored by the ESPON DEMIFER project, which developed four scenarios showing how various policy bundles can lead to different trajectories of developments in population and labour force by 2050 (see section 2.4, map 2). All scenarios predict a medium to high decrease in the labour force on the Slovenian side of the border. On the Italian side of the border scenarios generally predict positive changes, with the exception of the province of Udine which situation is closer to neighbouring Slovenian regions. To conclude, the Italy-Slovenia area will face future labour market challenges. Joint actions at cross-border level could address these shared needs and size these development potentials more intensively. 170 Jean-Claude Trichet, President of the ECB, Introductory Statement with Q&A following the Governing Council meeting of 3 August, Ignatovic (2011) 172

65 Cross-border interventions supporting labour market integration between Italy and Slovenia ( ) Cooperation between Italy and Slovenia started long before INTERREG. Numerous formal and informal structures and initiatives aimed at developing cross-border cooperation developed before the 1990 s. One of the first initiatives was the setting up in 1965 of the Trigon. Established by Friuli Venezia Giulia (IT) and Slovenia, the association also included Carinthia (AT), and aimed at developing cooperative relations between these border regions regarding tourism and spatial planning. Croatia joined later on and the organisation was renamed Quadrigon. 173 The already mentioned Osimo Agreements (created 1975 ratified 1977) are also considered by the experts as a first form of de facto cross-border cooperation, allowing for better cross-border integration. They consisted of an agreement of promotion of economic cooperation between Italy and the former Yugoslavia, a [never implemented] Protocol on free trade zone, provisions for easier cross-border migration (increased number of border crossings, special provisions and passes for daily migrations of local population - approx beneficiaries in Slovenia and beneficiaries in Italy) and protection of minority rights. 174 The provisions laid down in the Agreements created a quite high potential for crossing the border for the inhabitants in the designated Osimo belt along the border, [stimulating] cooperation, cross-border activities and travelling, also softening the effects of the Iron Curtain and reducing the difference between the old and the new members compared to other borders. Large-scale cross-border cooperation was also experienced through the ALPS ADRIATIC Working Community. In 1978, one year after the ratification of the Osimo Treaty, the Working Community of States and Regions of the Eastern Alpine Regions - or ALPS ADRIATIC - was created by the Autonomous Region of Friuli-Venezia Giulia and the region of Venezia (IT), the Carinthia, Upper Austria and Styria provinces (AT), the Socialist Republic of Slovenia (SI), and the Socialist Republic of Croatia (HR). This further important experience was intended as an agency of territorial cooperation among institutional actors; its primary role was to foster cross border cooperation along the Iron Curtain. 175 Both the Osimo Agreement and the ALPS ADRIATIC Working Community were striving for restoring economic but also cultural networks that existed up until the end of the Austro-Hungarian Empire, when there was no state border and no cultural differences in the programme area. The ex-post evaluation of INTERREG Initiative mentioned that additional local actions emerged such as Odprta meja Confine aperto (a day of outdoor activities along Val Rosandra/dolina Glinščice with free movement across the border) around which more and more coordination and cooperation evolved on the local level (Panteia Oikos, 2010). In addition, the Italy-Slovenia cross-border area is concerned by the bilateral EURES Euradria cross-border partnership (see: Box 11). Created in 2007, this framework agreement for cooperation between the public employment services is also organizing the Fiera del lavoro transfrontaliera Euradria, the Euradria cross-border job fair. 173 Lipott (2013), p Panteia-Oikos (2010) 175 Lipott (2013), p. 10

66 66 Box 11: The EURES Euradria partnership Regions Covered: The cross-border region will include the entire territory of Friuli Venezia Giulia - the province of Trieste, Udine, Gorizia, Pordenone and the statistical regions Goriška, Obalno-kraška and Notranjsko Kraska in Slovenia within its boundaries. Short Description: The framework agreement for cooperation between the public employment services, employers and workers organisations of the adjacent regions of Slovenia and Friuli Venezia Giulia was signed in Trieste in December In March 2008 this partnership was recognised by the European Commission. Using as a starting point the proper dissemination of information about living conditions and employment, the main aim of the partnership is: to promote the mobility of workers in the cross-border region in the interest of matching labour demand and supply, stimulating this mobility by identifying and removing barriers to mobility, providing assistance to jobseekers and employers in their respective searches for job opportunities and staff, safeguarding workers rights and finally, taxation and insurance matters. The action is also directed at encouraging active policies which support the development of an integrated and mutually beneficial labour market, promoting processes which will lead to a real and solid harmonisation of rules and to uncovering and combating the black economy. Eures Euradria is supported by a network of Eures advisors throughout the Euradria region, working within the public employment services or for trades union and employers associations in both countries. Source: Adapt from Eures Euradria With the start of EU-funded European Territorial Cooperation in 1991, also the up to now four generations of cross-border INTERREG and ETC-programmes ( , , ) provided complementary support to enhance further development of the cross-border labour market within the Italy-Slovenia cross-border cooperation. INTERREG and ETC-programmes succeeded one another, accompanying the integration process of Slovenia to the EU. The periods : INTERREG II and III programmes Already from the first generation of INTERREG programmes implemented in the Italy-Slovenia CBC area contributions were made towards labour market integration. The INTERREG II A - Phare CBC Programmes emphasised on five Strategy focus, to which the Productive Fabric on tourism, wine and local products, assistance to SMEs, services for businesses but also training and professional development. An intermediate assessment by the Association of European Border Regions (AEBR) mentioned the barriers to cross-border co-operation. The programme was indeed facing a high rate of commuters to adjacent Slovenian and Italian region. Despite being relatively significant, cross-border commuting has been relatively unstudied with respect to its impact upon both countries. 176 At the end of the programming process, the ex-post evaluation of the INTERREG II Community Initiative provides some information on the effectiveness of the programme interventions with regard to an improvement of the 176 AEBR (no date), p.6

67 67 productive fabric. In particular, it found out that actions were implemented especially in respect of the harmonisation of labour market conditions in the accession countries. Despite these incentives included in the programme, labour market co-operation actions were deemed less successful, in particular due to the absence of political will to open up and harmonise labour markets due to wage level differences and national labour market protection (see: Box 12). Therefore the evaluator s recommendation to harmonise INTERREG programmes in order that inefficiencies and lack of implementation power do not anymore restrict their action because of a conflict of interests between regional, national and EU policy goals, in particular in the case of labour market. Box 12: IT-SI INTERREG II actions towards a cross-border labour market Interventions that improve cross-border education & training potentials and the development of a cross-border labour market: The situation in this field has been rather divided while cross-border education and training has been accepted as a chance to reduce the isolation of the border regions, the establishment of a cross-border labour market has been seen as impossibility. The reason could be found in the disparities of the wage levels, since Slovenian average wages are lower than Italian ones. Still unlike the Austrian programmes in this field the Italian side at least showed some willingness to tackle the problem in the long run and actively involved all the regional labour market authorities in order to establish a mutual knowledge base. There has been one measure dedicated to the problem of cross-border education and training with about 15 projects conducted either within this measure or under other measures. The projects actually conducted within this field have been dealing with the following matters: Training and education of professionals projects to provide higher qualification in specific industries e.g. IT-skills. Cross-border training schemes and bilingual courses to provide know-how transfer in specific industries e.g. management and business administration, tourist guides. Cross-border information schemes to provide regional and local authorities with data on the labour market situation in the border area monitoring as first step for future labour exchange. Source: Adapted from LRDP, 2003, p.198 The following INTERREG programme did not manage to go much further. In its situation analysis, the INTERREG III A / PHARE CBC Italy-Slovenia programme assesses a generally satisfactory situation regarding the labour market on both sides of the border. Already at that time, employment percentages were higher than the national averages despite some sector and specific programme areas facing structural crises. On the labour issues, the programme identified the numerous cross-border workers commuting from Slovenia to Italy as a possible starting point for the future integration of the systems, in particular in view of a common labour market. 177 Worth EUR 118 million, out of which the ERDF contribution amounted to EUR 43 million, the programme included three priorities: (1) Sustainable development of cross-border region (2) Economic co-operation and (3) Human resources, cooperation and systems harmonization, under which several projects address issues related to 177 CIP INTERREG IIA Italy-Slovenia , p.17

68 68 cross-border labour market (see: Box 13). However, the integration of a transnational labour market is listed among the priority topics. 178 Box 13: Projects related to cross-border labour market under the INTERREG III A / PHARE CBC Italy-Slovenia programmes Several projects have been carried out during the period under Priority 3 Human resources, cooperation and systems harmonization measure 3.1 Human resources requalification, retraining for staff personnel and innovative initiatives about the labour market. A total of six projects were identified as providing an outlook of the actions contributing to a cross-border labour market and their produced results. The description of two of them is hereafter reproduced since they have already been emphasised by the ex-post evaluation. PROMO Promoting mobility and protection of cross-border labour aims to respond to the need to promote permanent labour mobility in the border areas using a web portal to put in touch labour supply and demand. The project aims chiefly at informing and promoting cross-border labour mobility, in order to qualify, protect and enhance the workers, with particular emphasis on women workers as well as on the mutual dissemination of information and experiences acquired by the two administrations mentioned above. In this sense the project aims to better outline the two labour markets; to facilitate the matching of supply and demand as regards labour mobility; to set up a cooperation with observers of the Italian and Slovenian labour markets; to enhance the services available to the cross-border labour universe. In addition to facilitating the matching of supply and demand, the portal provides information on fiscal matters, social security and health that the workers need to work across the border. Approved costs of this project were EUR 685, This project emphasised learning and experimentation rather than tangible results. Employment mediation - computer applications in a perspective of dialogue for development aims at supporting the integration of the Venetian and Slovenian work systems, favouring mutual knowledge, dialogue and an evaluation of the opportunities offered on both sides. The beneficiary intended to make available to a crossborder network the experience acquired through the e-labour project, an IT system aimed at favouring a matching of work supply and demand through the telematic network. The market analysis in the cross-border area resulted in an information booklet conceived in two mirror-versions for workers on both sides of the border and providing information on the labour market. Approved costs of this project were EUR 124,585 This project emphasised learning and experimentation rather than tangible results. Source: Adapted from KEEP portal; Panteia Oikos, 2010 Again, the ex-post programme evaluation helped determined that although cooperation increased, the Italy-Slovenia CBC programme achievements were still very limited stating that projects targeting labour market & human resources were only a few and mostly supported various studies, therefore their effect was insignificant [ ] Cross-border endogenous potentials were not mobilised and the labour market has not opened up, both because of administrative barriers (acknowledgement of degrees, specific job profiles etc.) and because of poor knowledge of the potential and poor language skills However, evaluators recognised that progresses are being made towards the development of improved products and services Priority topics are: Promotion of urban, rural and coastal development; Cooperation on research, technological development, education, culture, communications, health and civil protection; Protection of the environment, energy efficiency and renewable sources of energy and Basic infrastructure of cross-border importance 179 Panteia Oikos (2010), pp.88-90

69 69 From INTERREG IV to INTERREG V ( ) During the INTERREG IV period ( ) the area of cooperation increased, including in Italy the provinces of Trieste, Gorizia, Udine, Venezia, Rovigo, Padova, Ferrara e Ravenna and the Slovenian regions Obalno-Kraška, Goriška and the Kranjska Gora municipality, as well as the flexibility areas of Pordenone and Treviso in Italy and Osrednjeslovenska and Notransjko-kraška in Slovenia. For the period , the area of cooperation will be shifted further east. It will now include five Italian provinces Trieste, Gorizia, Venezia, Udine and Pordenone and the five statistical regions of Obalno-kraška, Goriška, Gorenjska, Notranjsko-kraška, and Osrednjeslovenska (see: Map 16) Besides these geographical changes, the programme strategy represents a straight continuation of the previous INTERREG programmes. The now closing up programme aimed at developing the potential of crossborder education and training by raising the level of social integration and strengthening cooperation in the labour market, with particular attention to women and persons belonging to the disadvantaged categories. 180 This goal is addressed under the operational objective Improve and qualify potential employment through coordinated higher education and training systems of Priority Axis 2 Competitiveness and knowledge-based society. Map 16: Italy-Slovenia programme area evolution Source: Regione Veneto, 2014 The programme faced some difficulties in its first steps, namely during the appraisal of the socio-economic situation. Limited data and information were found regarding the cross-border labour market. The weak analyses on this theme were also underlined in the programme ex-ante evaluation stating that information on some aspects of the territorial cooperation are missing, in particular regarding data on exchange and relationship between the two involved countries in the field of languages, business and labour market. Projects directly or indirectly related to cross-border labour market integration were funded. However little visibility on their results is available, yet. 181 Capitalisation activities published so far did not address the (integration of the) labour market issue, also when dedicated to capitalisation on projects results in the field of research, development and innovation. The INTERREG VA Italy-Slovenia Cooperation Programme is currently being drafted. However, for the forthcoming INTERREG V period ( ) labour market relevant actions have no 180 INTERREG IVA Italia-Slovenia (2007) 181 KNOW US - Co-generation of competitive knowledge among universities and SMEs (Strategic project), STUDY CIRCLES - Crossborder laboratory for the development of human resources and cooperation networks promoting local resources, and NUVOLAK - Bilingual entrepreneurial web-based platform aimed at supporting the realization of cross-border entrepreneurial opportunities are three Priority 2 projects. They ended in September and October 2014.

70 70 clear supporting priority axis. A public consultation has been completed in July Expressed public interest was directed towards Research & Innovation (IP 1b), support to SMEs (IP 3d), natural and cultural heritage (IP 6c) and health and social infrastructure (IP 9a). Relevant expected changes were included such as the policy support to the integration of youth in the labour market and the promotion of the cross-border use of health facilities. The on-going negotiation processes however retain only Research & Innovation (IP 1b) and natural and cultural heritage, while two other areas of interest were selected: low carbon economy (IP 4e) and institutional capacity (IP 11 ETC). It is important to note that IP under TO 8 promoting sustainable and quality employment and supporting labour mobility and TO 10 investing in education, skills and lifelong learning have not been considered worth selection from the very first step of the programming discussion. Issues linked to labour market were punctually brought forwards during Task Force discussions. As the Programme has not yet been finalised and sent to the EC, a room for labour market relevant actions remains e.g. within Priority axis 1 or Priority axis 4. Two macro-regional strategies relevant for the Italy-Slovenia cooperation area i.e. the EU Strategy for Adriatic Ionian Region (EUSAIR) and the future EU Strategy for the Alpine Space (EUSALP) are being developed. Both have the common goal of creating more job opportunities in their area. Nevertheless, at the current stage of development, neither EUSAIR nor EUSALP is emphasising the transnational dimension of the labour market. 182 Meridiana Italiana (2014)

71 71 4. Transnational labour market integration and related interventions of INTERREG- and ETC-programmes This chapter analyses implications of the gradual but territorially differentiated evolution of European labour market integration for transnational cooperation areas, first through a general analysis (Sections 4.1 and 4.2) and then by means of two case studies (Sections 4.3 and 4.4). Whereas cross-border labour market integration is today well understood in all its facets, transnational labour market integration still remains a rather abstract concept. Due to this, section 4.1 tries to identify a number of features that may help characterising transnational labour market interactions (i.e. size & orientation of cross-country labour migration flows; factors influencing on cross-country labour mobility; orientation of domestic policies that are relevant for cross-country labour mobility) and also briefly highlights future challenges emerging from demographic change. This shall also help to identify potential fields of action for transnational cooperation that can support a further territorial integration of these areas. Furthermore, section 4.2 analyses interventions for developing and integrating transnational labour markets that were supported by the INTERREG and ETC-programmes since The two case studies on the transnational areas Baltic Sea Region (Section 4.3) and Alpine Space (Section 4.4) were again carried out with a view to integrate and further deepen some of the core issues addressed under the previous sections of this chapter. The Baltic Sea Region covers old and new EU-Member States, a member country of the EEA (Norway) and two neighbouring Third Countries which have variable access to the EU-labour market (Russia, Belarus). Due to a differentiated evolution of labour market integration in this cooperation area (i.e. Nordic countries since the late 1950s; EU-level since the mid-1990s) and a patchwork of different border statuses, cross-country labour migration flows have developed slowly and also very unevenly. Transnational cooperation started in 1992 with the still ongoing intergovernmental VASAB-process, which was complemented since 1997 by the EU-funded transnational cooperation programmes. Issues relating to transnational labour market development were given only little attention during the early cooperation phase, but a more proactive approach is observed in the period and in particular in the context of the EU s Macro-regional Strategy for the Baltic Sea Region (EUSBSR). The Alpine Space Area covers old and new EU-Member States and a non-eu country which up to very recently has fully endorsed the EU s free movement of workers principle (Switzerland). Transnational cooperation in the Alpine Space Area started in 1996/1997 through an ERDF pilot action programme ( ) and was continued during the following periods and Although often intense cross-border commuting exits along many borders within the Alpine Space, the transnational programmes have up to now only paid little attention to labour market-related issues. However, transnational labour market issues might gain more importance in the future due to the consequences of the recent Swiss referendum of February 2014 and the focus of the emerging EU Macro-regional Strategy for the Alpine Space (EUSALP).

72 Main features and future perspectives of labour market interactions within transnational cooperation areas The wider European labour market integration process has also important implications for transnational cooperation areas and their territorial cohesion. Different to cross-border labour market integration, however, it is much more complicated to apprehend the territorial reality of transnational labour market interactions. There are various reasons which may explain this. A first one is the complete absence of an established analytical concept which allows distinguishing the specific dimension of transnational labour market interactions from EU-wide labour market interactions. The notion transnational is normally used in labour market related publications as a synonym for EU-wide labour market integration that was described in chapter 2 of this study. A similar use can be observed in case of the ESF-supported transnational cooperation activities 183 which span across the entire EU and resemble from an ETC perspective much more to interregional cooperation. Other closely related reasons are the particular territorial extent of transnational cooperation areas which further complicates a territorially focussed analysis 184 and the lack of a pertinent indicator which allows to establish the status and to follow up the evolution of transnational labour market interactions. Due to this, the now following analysis will have to remain experimental and is mainly focussed on highlighting basic needs for which transnational cooperation might be an adequate level of action to find common solutions for shared problems. An obvious starting point of this analysis is to explore the scope of transnational labour market interactions that are taking place within the cooperation areas. Other crucial and closely related aspects to be explored in this section are persisting variations in the capacity of domestic policies to stimulate cross-country labour mobility within transnational areas and the territorially differentiated effects that demographic change will have on transnational labour markets in the medium and long term. Cross-country labour migration flows within transnational areas For exploring the territorial pattern of labour market interactions, we could in principle use the geographical orientation of cross-country labour migration flows within transnational areas as a basic point of departure. However, an exact determination of such flows is very difficult, because existing country- or regional-level data on intra-eu mobility flows usually also includes crossborder commuter flows. For an analysis of transnational areas, one should therefore dispose of country-wide and also regional-level data on labour mobility flows that excludes cross-border commuting flows. This is 183 See on these activities: Transnational programme areas usually encompass several EU Member States and sometimes also neighbouring non-eu partner countries, of which either the entire territory or smaller and larger parts of it are covered. The territorial coverage of many transnational areas remained more or less stable over time (however also with territorial overlaps among them), but in other cases also drastic changes have taken place. The most significant change is observed for the former INTERREG IIC/Article 10 and INTERREG IIIB programme areas CADSES and ARCHIMED, which were re-arranged into two new ETC-transnational cooperation areas Central Europe and South East Europe for the periods and

73 73 because the real-life behaviour of actors of cross-border and transnational labour mobility is clearly different. 185 Cross-border workers commute to work on a daily basis or at the maximum on a weekly basis, which is possible due to the much smaller geographical extent of a cross-border area. Commuters are also expected to cover the associated higher travel cost (if compared to migrants) through earnings from their occupation in the neighbour country. Migrant workers, instead, are the typical actors of transnational labour mobility because they cannot afford frequent travelling to work on large distances within the cooperation area on grounds of their earnings. Migrant workers therefore usually pay once travel cost to their place of work which at the same time becomes their new place of residence. Despite this lack of differentiated flow data, some features of recent cross-country labour migration flows are now briefly presented. A first one is that cross-country labour flows within transnational areas are low in overall terms and they also tend to be lower than what is usually captured by the intra- EU mobility flows. The overall magnitude of such cross-country labour flows can be illustrated by referring to the most recent available data on intra-eu labour mobility rates: intra-eu labour mobility between only the EU 15 Member States stood at just 1 % in 2010 and within this volume cross-border mobility accounted for 0.35 %. 186 A second one is the observed shift in the country-wide average crude rates of net migration between the pre-crisis period ( ) and the post-crisis period ( ). From these shifts it appears that ( ) the destination of mobility flows is likely to have been more significantly affected than the rate of mobility in aggregate, given the widening divergence between the Core and Periphery economies (see: Box 14). 187 The observable change in net migration since the crisis has also clear implications for transnational cooperation areas. They are strongest in South-West-Europe, Atlantic, Mediterranean and North West Europe (i.e. due to shifts in IE, ES, PT, FR, SI, EL, BE, NL), but also important in the North Sea and Baltic Sea cooperation areas (i.e. due to shifts in NO, NL, SE). Still significant changes are observed in the Alpine Space (i.e. due to shifts in FR, AT, SI) and in Northern Periphery (i.e. due to shifts in NO, SE), but the situation remained more or less stable in Central Europe and South East Europe (i.e. only shifts in CZ & AT or HR, RO & EL). 185 The need for a clearer differentiation between these two types of labour flows emerges also from studies examining cross-border commuting (e.g. Huber/Nowotny, 2009, pp.31-34; European Commission, DG Employment and Social Affairs, 2009, pp.7 & 8) or cross-border commuting in distinction to international migration (e.g. Nordregio, 2013b, pp.29-32). This illustrates that the practical approach adopted by a recent DG Employment study, which was only developed for coping with problems relating to data availability (European Commission, DG Employment, Social Affairs and Equal Opportunities, 2011, pp.85-87) is rather counterproductive. 186 European Employment Observatory (2013), p European Employment Observatory (2013), pp.7-8

74 74 Box 14: Pre-crisis and post-crisis crude rates of net migration The map on averages of crude net migration ( ) highlights that Spain, Italy and Ireland had very high net inflows of migration in the period , which was strongly linked to the EU enlargements and inflows from the newer Member States. As can be seen, many of the newer Member States exhibited a net outflow over this period. The map on averages of crude net migration clearly shows that the ( ) southern EU countries, as well as the crisis stricken Ireland, have had a significant drop in their net migration rate, although in the case of Italy the overall level of net migration remains high. Italy experienced very strong immigration in 2007, following the accession of Romania and Bulgaria to the EU, but immigration to Italy dropped by 30 % between 2007 and Ireland is an exceptional case, as it experienced very high net inward migration before the crisis, but has become a net emigration country since Factors influencing on cross-country labour migration A first and important influencing factor is that the EU-borders covered by transnational cooperation areas are quite different as regards their formal openness for cross-country labour mobility. If map 3 of the study (see: Section 3.1) and the current shaping of transnational programme areas (i.e. for ) is considered, then the following can be observed: There is a number of transnational areas in which a free movement of workers from the direct programme partner countries was possible since the very beginning of the cooperation in 1996/97 (e.g. Northern Periphery, North Sea Area, Atlantic Area, Acores- Madeira-Canarias, North West Europe, South West Europe, Alpine Space). 188 But there are as many transnational areas in which a free movement of workers within the entire zone has only become possible over time (e.g. after a successive lifting of labour market access restrictions for newly joining EU-Member States) or where the external (land) borders with neighbouring non-eu partner countries are still closed or subject to specific entry restrictions (e.g. Indian Ocean Area, Caribbean Area, Baltic Sea Region, Mediterranean, South East Europe, Central Europe). General drivers of cross-country labour migration are often different kinds of push & pull factors such as differences in domestic and foreign income levels, a different quality of employment and differences in the overall unemployment situation. Various sources indicate that mobility decisions are also influenced by many other factors such as housing issues, the employment possibilities for spouses and partners, return mechanisms and the recognition of 188 Slight exceptions to this general rule exist for the cases North West Europe and Alpine Space which both include Switzerland, as the EU-Swiss Free Movement Agreement only entered into force in 2002.

75 75 mobility experience 189 and family ties or cultural factors. In order to better understand the opportunity structures of migrants, all these factors can be allocated to three different levels: Micro level: Education and skills, employment situation, income level, income security, social status, family status. Meso level: transnational social and family networks, migrant community formation, labour recruitment systems, labour market dualisation, employment niche formation, ethnic status hierarchies. Macro level: income differentials, economic cycles, unemployment levels, labour market regulation, welfare policy & social rights, immigration policy. 190 Obstacles to labour mobility are also important factors and they can be found on both the institutional and the individual levels. A lack of language skills again appears to be the most important barrier to an intra-eu mobility of workers, followed by legal and administrative obstacles (e.g. limited portability of social benefits, non-recognition of qualifications) and a lack of information or historical barriers and cultural differences. 191 Stimulating labour migration through mobility-friendly domestic polices If the above-mentioned factors influencing on cross-country labour migration are considered, it then is obviously of interest to see in how far domestic policies of EU-Member States and other partner countries of transnational cooperation areas are actually creating favourable conditions for mobility. If data of the Migrant Integration Policy Index (MIPEX) 192 is used and arranged for selected transnational cooperation programmes, one can observe that in many cooperation areas the overall design of currently applied domestic policies is far from being optimal for stimulating cross-country labour mobility (see: Table 10). In four of the examined transnational cooperation areas, one can observe that half or more of the covered Member States and partner countries already apply domestic policies which are designed in a way so that they are either favourable or slightly favourable to enhance crosscountry labour mobility (i.e. Northern Periphery, North Sea, Baltic Sea Region, South-West- Europe). In the other six transnational cooperation areas, however, domestic policies are highly variable. Here, a majority of the programme partner countries apply domestic policies that are only halfway favourable or even slightly unfavourable for a cross-country mobility of workers (i.e. North West Europe, Atlantic Area, Alpine Space, Central Europe, South East Europe, Mediterranean). Strong needs for action appear especially in the programme areas South East Europe, North West Europe and Central Europe, because 70% or more of the respective partner countries apply only halfway favourable or slightly unfavourable policies. 189 European Commission (2010a), pp The micro level relates to individuals while macro and meso level structures are shaped within such relationships and networks of relationships. Nordregio (2013b), p European Commission (2010a), pp. 2-3; Nordregio (2013b), pp

76 76 Table 10: Current status of domestic policies relevant for labour mobility in selected transnational areas MIPEX III country rankings (2010) Favourable domestic policies Slightly favourable domestic policies Halfway favourable domestic policies Slightly unfavourable domestic policies Northern Periph. North Sea NWE Transnational programme areas ( ) (*) Baltic Atlantic Alpine Central Sea Area Space Europe Region (**) (***) South West Europe MED South East Europe (****) SE X X X PT X X X NL X X ES X X X DE X X X X X DK X X NO X X X FI X X IT X X X X RO X EE X MK X AT X X X HR X CZ X UK X X X X X X BE X X CH X X EL X X FR X X X X X LU X PL X X LT X SI X X X X MT X HU X X BG X IE X X X LV X CY X SK X X (*) The selection does not consider programmes covering remote maritime or overseas territories of EU-Member States (i.e. Indian Ocean Area, Caribbean Area, Acores-Madeira-Canarias) (**) The ranking does not cover the programme partner countries Belarus and Russia. (***) The ranking does not cover the programme partner country Liechtenstein. (****) The ranking does not cover the programme partner countries Albania, Bosnia and Herzegovina, Moldova, Serbia and Ukraine. Source: Own elaboration on ground of data from the third edition of the Migrant Integration Policy Index (MIPEX III data for 2010) Open labour markets, labour migration and territorial integration It is often stated that a high level of EU-internal labour mobility can act as a shock absorber against short-term economic asymmetries insofar that it ensures that the supply of workers can better respond to variations in demand at local, regional and national levels (e.g. labour force moves from countries with high unemployment & no or limited immediate prospects of improvement to countries with labour shortages) and that it also creates immediate win-win situations for the mobile individuals (e.g. satisfaction and fulfilment due to the change of one s status from unemployed to employed, improved earnings and individual welfare). 193 A high level of cross-country labour mobility also allows transnational cooperation areas to alleviate adverse labour market effects of short-term economic asymmetries and supports the 193 European Commission, DG Employment, Social Affairs and Equal Opportunities (2010), pp.16-17; European Employment Observatory (2013), pp.3-4.

77 77 development of a competitive transnational economy, which then helps to achieve territorial integration in a long-term perspective. An increasing working age population in the receiving countries and regions can stimulate further infrastructure investments, strengthen the competitiveness of the economy and sustain growth processes, especially if these areas already face labour shortages in specific sectors or lack of highly qualified labour (i.e. brain gain ). 194 At the same time, however, one should not overlook that a high level of cross-country labour mobility can also lead to unwanted development both in the sending and receiving countries or regions. This, in turn, can give raise to new social exclusion or territorial imbalances within transnational cooperation areas. Social exclusion may emerge if migrant workers discover that work in their new host country is difficult to find or is of lower quality than they had hoped, ( ) with consequential knock-on effects in terms of living standards and social integration as well as on future career progression and earning power. 195 Furthermore, recent research suggests that migrant workers are among those groups most affected by economic downturns and also points to other negative effects that can emerge in the socio-economic relations of the receiving countries. 196 Social exclusion can also emerge if migrant workers are deciding to return back to their country of origin and then find it difficult to re-integrate in their home labour market. This is confirmed by a recent Eurofound study which concludes that ( ) mobility experience of highly skilled returnees was appreciated in the home labour markets, whereas this was usually not the case with the low-skilled mobile workers. The returnees were in a better position if international work experience was important for the employer. This was usually not the case in low-skilled jobs, where workers experienced difficulties in using their new skills. ( ) Also skilled though not highly qualified returnees who were employed below their qualifications abroad (i.e. brain waste situations) were likely ( ) to encounter difficulties in reintegrating successfully into the home labour market due to the gap in their career development. This was particularly true for young people without work experience relevant to their qualification. 197 Potentially negative consequences of out-migration for the sending countries and regions are widely discussed, in particular as regards the outflow of young and highly skilled people. Extensive emigration of the working age population and significant brain drain can lead to general labour shortage and a lack of highly qualified labour that is needed in specific sectors being particularly relevant for economic development. This has a negative impact on productivity growth and also further increase the demographic challenge (i.e. dependency ratios). Although some debate lately emerged on so-called brain circulation proceses, with migrant workers moving back to their home countries and regions and bringing with them new skills or access to broader transnational relational networks (e.g. business contacts), 198 it seems that the above-observed practice of return-migration only confirms in parts the positive expectations that are associated with this concept. Should many regions within a transnational area suffer from significant human capital losses, then also new territorial imbalances are likely to emerge in a medium and long term perspective. 194 Nordregio (2013b), p European Commission, DG Employment, Social Affairs and Equal Opportunities (2010), p e.g. pressure placed on nationals already disadvantaged on the labour market; undermining of domestic working conditions and wage arrangements; new sub-contracting practices or labour exploitation etc. See: Nordregio (2013b), p.20; FAFO (2006). 197 Eurofound (2012), p Nordregio (2013b), p.20

78 78 Demographic change and transnational labour market integration Demographic change entails evident risks and also opportunities with important implications for the territorial integration of transnational cooperation areas. The risks, more particularly, will not only put increasing pressure on the current social security and welfare systems of EU Member States as well as on their entire economy 199, but also challenge in many ways the key variables of regional competitiveness (i.e. creativity, economic performance, infrastructure and accessibility, knowledge employment, education) and also require changes in sector-specific or horizontal regional policies that are framing the local living conditions of citizens. 200 The implications of demographic change for labour markets are already felt and they will further increase and become in many respects pivotal for the long-term socio-economic development of our societies. For sustaining the present national welfare and social systems under conditions of a further shrinking working-age population, a generally high level of employment is needed and also the general compensation with older professionals has to be better organised. A growing scarcity of skilled labour and in particular of young and highly qualified professionals can hamper the launching of innovative business-level production processes and lead, for the affected firms, to a loss of market opportunities and, for the concerned regions, to diminishing economic growth potentials. An increased mobility of EU migrant workers and a stronger inflow of non-eu immigrant workforce can indeed help countering potential regional labour force imbalances. But this requires in turn that an adequate offer for further qualification and vocational training is put into place so that potentials of lowly educated migrant or immigrant workers are further upgraded (esp. improving language skills) and that other family members be they in working age or close to it - have swift and full access to jobs. Where regional labour markets will be most challenged in the future and where the related regional policies will have to adapt is of course very much depending upon the significance of the region-specific impact of demographic change. For this to explore, we make use of the results of a study project which developed an Index of Regional Demographic Change for a long-term projection ( ) and elaborated a classification of EU-regions with four types that was also mapped (see: Map 17). 201 From this map it appears that EU-regions with a projected population shrinking / lower population growth coupled to a faster / slower population aging (Types I & II) are mostly located in the central-eastern part of the European Union, but also in the northern, western and southern periphery of the Union (Finland, Sweden, UK, Spain, Italy). Conversely, the regions for which a higher population growth coupled to a slower or faster population aging is projected (Types III & IV), are most often located in the north-western and south-western part of the Union, also including some parts of the Alpine Space and some isolated growth islands in the 199 e.g. stronger demands on the social protection systems (i.e. pensions, health care and long-term care); raise of the total agerelated public expenditure or of other social expenditure items (e.g. disability benefits; various transfer payments); increasing financial pressure on a further shrinking active population (i.e. through taxes & social contributions); production processes are not taking place because economic growth will depend on rising productivity alone if working age population declines and employment rates remain low. 200 e.g. maintaining an adequate and close-by access to essential public services, provision of new and age-specific infrastructures / services and where required - provision of adequate socio-economic integration opportunities for immigrants to avoid social exclusion and polarisation. 201 The RDC-Index pictured both ageing and shrinking of the population, while giving them equal weight, and related demographic change in one region to demographic change in all 264 EU27 regions. For further details see: Tivig, T./Frosch, K./Kühntopf, S. (2008): pp.13-16

79 79 north-eastern and south-eastern part of the Union (mainly regions around metropolitan or capital city areas). Map 17: Relative position of EU 27 regions area with respect to population ageing and shrinking in 2030 Source: Tivig/Frosch/Kühntopf (2008): The same study also developed a measure of Regional Demographic Location Risk (RDLR), which was obtained by linking demographic trends to location factors (i.e. labour supply, human capital, labour productivity, R&D performance) and by considering also contextual influences that may moderate the link between demography and location factors. 202 If only the regionallevel risks and opportunities of demographic change for labour supply and human capital are looked at and interpreted from a transnational cooperation perspective, then the following can be observed: As regards the situation of labour supply up to 2030 (see: Map 18), the interplay between demographic trends and the current location situation as well as specific contextual factors 203 produces a rather diffuse overall picture across the European Union. It appears that only North West Europe and the North Sea Region are characterised by a generally positive long-term perspective. Here, regions with a high or medium labour supply risk are few in number and the rest of the regions either have a neutral situation or a moderate and high opportunity situation. All other transnational cooperation areas are characterised by much higher proportions of regions with a high or medium labour supply risk and the programmes Central Europe, South East Europe and Mediterranean stand out in this respect. For the availability of human capital up to 2030 (see: Map 19), the interplay between demographic trends and the current location situation as well as specific contextual factors 204 leads to a clear West-North and Central-South-East divide within the European Union. In the 202 Tivig, T./Frosch, K./Kühntopf, S. (2008): pp Contextual components were the incidence of female part-time employment, the relative labour market situation of women and the elderly and also the accessible population in the domestic context as well as in adjacent or more distant regions of other EU countries. 204 Future availability of human capital is also driven by factors such as educational investment, the unused highly skilled female potential and the extent of life-long learning.

80 80 cooperation areas South-West-Europe, Atlantic, North West Europe, North Sea, Northern Periphery (i.e. to some extent also Baltic Sea), the large majority of regions either have a neutral situation or a moderate and high opportunity situation as regards the future availability of human capital. All other transnational cooperation areas are characterise by much higher proportions of regions with a high or medium human capital risk, with the Central Europe and South East Europe programmes clearly standing out in this group. Map 18: Labour Supply Regional Demographic Location Risk Map 19: Human Capital Regional Demographic Location Risk Source: Tivig/Frosch/Kühntopf (2008): Appendix A, figures 14 & 15 To conclude, it becomes clear that the indeed variable future implications of demographic change for regional labour markets create shared needs and development potentials in transnational cooperation areas that should be addressed more intensively through joint actions. Starting points for such actions promoting transnational labour market integration should in particular be the aspects which were listed under the above-mentioned contextual influences, because they have potentials to moderate the implications of the demography factor.

81 Transnational interventions under INTERREG and ETC-Programmes ( ) promoting labour market development and integration Transnational cooperation addressed the territorial implications of European labour market integration rather seldom under the first two generations of INTERREG-programmes ( & ). Under the next generation of transnational ETC-programmes for , however, one can notice a slowly increasing interest to become active in this field. Transnational programmes for and For the first programming period , no precise information is available on the exact thematic focus of the realised transnational interventions. However, an overview on the main strategic objectives of the seven INTERREG IIC Programmes and the four Pilot Action Programmes (i.e. Northern Periphery, Alpine Space, ARCHIMED, Mediterranean Gateway) 205 suggests that they gave little or no attention to issues relating to transnational labour market integration. For the programming period , however, more information on the scope of labourmarket relevant transnational interventions exists. This information stems from an in-depth financial analysis that was carried out under the Commissions ex-post evaluation of INTERREG III, which also briefly covered Strand-B programmes. 206 Among the 83 fields of intervention used by all transnational programmes, three out of the five labour market relevant fields 207 stand out with still relatively significant shares: the field workforce flexibility stood at position 15 and was applied by five programmes, while the fields educational training and vocational training stood at positions 20 and 22 respectively and were applied by three and five programmes respectively. Compared to this, however, the fields positive labour market action for women and labour market policy had only very small expenditure shares (i.e. positions 46 & 48) and where applied by two and one programmes respectively. Another important transnational activity during both programming periods was the building up of a knowledge stock on the territorial situation of the relatively young cooperation areas through spatial visioning processes. Within the elaborated and subsequently also further up-dated vision documents, however, issues relating to the labour-market situation were addressed quite differently (see: Table 11). Several cooperation areas started to elaborate transnational spatial development visions already in 1992/94 (Baltic Sea Region) or later on in 2000/2001 (North West Europe, North Sea Region, CADSES). These early documents addressed a wide range of themes that were important for spatial development planning and policy. They also considered labour market related issues either extensively (Baltic Sea Region, CADSES) or to some extent (North West Europe, North Sea Region). During the period, several transnational co-operation areas up-dated their existing spatial vision documents (Baltic Sea Region, North Sea Region, North West Europe) or elaborated a spatial vision document for the first time (Atlantic Area). Some adopted a generally more focussed approach which also led to lack in consideration of labour market related issues 205 LRDP (2003a), pp Panteia (2010a), pp i.e. codes 174 (vocational training), 210 (labour market policy), 230 (developing educational and vocational training; persons and firms), 240 (workforce flexibility, entrepreneurial activity, innovation, information and communication technologies; persons and firms), 250 (positive labour market actions for woman).

82 Up-dating,, status by 2005 Status by 2000/2001 Up-dating,, status by 2005 Status by 2000/2001 Up-dating,, status by 2005 Status by 2000/2001 New elaboration, status by 2005 Status by 2000/ (Baltic Sea Region, North Sea Region). Other programmes maintained a relatively wide thematic approach and considered labour market related issues extensively (North West Europe, Atlantic Area). However, a common feature of all these processes was that labour market-related issues were mostly seen as a complement to the area s economic system and that a cross-country development and integration of labour markets was not considered a transnational challenge in itself. Table 11: Labour market related issues addressed by transnational spatial development visions Transnational cooperation areas ( , ) CADSES (*) Atlantic Area Baltic Region Sea North Region Sea North-West Europe Issues relating to labour markets, demographic change and social matters Labour market, employment & unemployment structure, patterns of qualification Population structure & demographic change Social cohesion and patterns of social disintegration Changing life styles & new needs of population / /+ + Intensity of consideration: 0 = not at all + = to some extent (with larger gaps) ++ = extensively (*) For the document elaborated by the VISION-Planet project. Source: Own elaboration on ground of information in ESPON-INTERACT (2006a), p.38 The above described overall situation for both programming periods can mostly be explained by the fact that transnational programmes were strongly focussed on the European Spatial Development Perspective (ESDP). The involved Member States and regions gave priority to addressing the main objectives and thematic policy options of the ESDP among which, however, labour market integration was not listed. Another explanatory factor could be the legal patchwork situation on formal labour market access, which existed under a number of transnational programmes that included a larger proportion of candidate counties ( ) and new Member States still being subject to temporary labour market access restrictions ( ). Under such conditions, it was obviously rather difficult to initiate meaningful transnational actions in this particular field. Transnational programmes for Under the next generation of transnational ETC-programmes ( ), however, one can notice a slowly increasing interest to address issues related to transnational labour market integration. This was mainly motivated by the now much broader general awareness about the medium and long-term impacts that demographic change will have on national/regional labour markets. Another supporting factor was in some cooperation areas also the new situation which

83 83 emerged after the lifting of the last temporary labour market access restrictions for workers from the new EU Member States. Some indication for this growing attention can be found in the spending profile of the 13 transnational programmes (see: Table 12), which had a total committed ERDF-support of slightly more than 1.7 billion at the end of Of this committed total, all transnational programmes allocated around 67.6 million of ERDF-support (or 4% of the total) to labour market-relevant interventions (i.e. intervention field codes 62-74, see Annex 9). The highest amounts of ERDF-support were mobilised by the three programmes South East Europe, Central Europe and Baltic Sea Region, which together account for 68% of the total ERDF-support allocated to labour market interventions under all transnational programmes. The Indian Ocean programme, which was the financially smallest of all transnational programmes with about 26 million of ERDF-support, had with 11.4% the highest share of ERDF-support allocated to labour market interventions. Clearly above-average shares of programme-level ERDF-funding for labour market interventions are also found under the programmes South East Europe (7.4%), Atlantic Area (6.4%), Central Europe (6%), Baltic Sea Region (5.9%) and Northern Periphery (5.8%). Table 12: ERDF-funding allocated of transnational programmes to labour market interventions Programmes ERDF-funding for labour market interventions, commitment status as of end 2012 (in million ) Share of labour market interventions in the programme s total committed ERDF-funding (in %) Madeira-Açores-Canarias 2,00 3,90 South West Europe 0,00 0,00 Alpine Space 0,00 0,00 Baltic Sea Region 11,75 5,86 Northern Periphery 2,02 5,79 Atlantic Area 6,40 6,36 Indian Ocean 2,93 11,44 Caribbean 0,59 1,44 North West 6,98 2,12 Mediterranean 0,00 0,00 North Sea Region 4,63 3,53 Central Europe 14,09 6,03 South East Europe 16,19 7,40 Total all programmes 67,59 3,88 Source: own elaboration on ground of ERDF commitment data 2012 provided by DG REGIO Some programmes addressed transnational labour market development in a more general way (Baltic Sea Region, see case study in section 4.3) or in the context of more specific themes. A good example for the latter is Central Europe, where projects focussed on improving education to better meeting the needs of changing labour markets and on addressing the wider challenge of demographic change (see: Box 15). 208 The following information stems from a financial analysis of the programming period which was realised in the context of this assignment (see: Scoping Study), based on the categorisation data (in its raw form) as reported in the 2012 Annual Implementation Reports by the Managing Authorities, which was made available by DG REGIO. See:

84 84 Box 15: Addressing transnational labour market development in Central Europe The project Senior Capital aimed to contribute to the economic competitiveness of Central Europe through developing knowledge and enlarging quality work force by focusing on the potentials of seniors. More specifically, the project promoted a stronger economic and social role of senior citizens by supporting their knowledge development and by channelling their knowledge and experience towards younger generations. In this respect, the project first collected good practices on education and employment models and also established a more wide ranging collection of successful cases on employment solutions for seniors by businesses across Europe ( Key findings were jointly discussed and a joint pilot methodology had been developed to prepare pilot actions aimed at testing tools and adapting them to the local needs. Local actions promoted new senior specific education and employment schemes to extend the qualified workforce base in specific fields needing additional human resources with a view on safeguarding employment opportunities of younger people. The project ET struct aimed to address and tackle the general lack of coherence in the connection of the educational system to the leading edge of technology and business practices, being one part of the Lisbon employment agenda. Within this wider context, the participating regions faced three types of problems that were to be addressed by transnational cooperation: brain drain of young and well-educated people, increasing migrant workforce penetrating the labour markets and weak links between secondary education and changing demands of the labour market. Improvements in this respect should be achieved by a number of transnational tools and by setting up permanent territorial management structure ( Firstly, the project developed a transnational knowledge management tool ET-Inventory (new-skills-for-new-jobs) with data about the current and the foreseeable economic situation in the ten project partner regions. Secondly, an elearning platform ( ET- LearnTrain ) was developed which contains online and blended learning modules - in English and the partner languages - in order to train regional workforces for the current and foreseeable economic challenges. Finally, in every partner region, permanent territorial management structures (ET-Management) were established to enable stakeholders at policy, at labour market and at education-training levels to work together effectively. These permanent territorial structures were also linked at transnational level in a meta-structure (ET-Joint-Management). Outlook on the period All programmes of the European Structural and Investments Funds (ESIF) in the period are expected to contribute to the smart, sustainable and inclusive growth pillars of the Europe 2020 Strategy. Transnational cooperation programmes shall contribute to the Europe 2020 Strategy by means of actions linked to the Union's cohesion policy priorities that involve national, regional and local partners, with a view to achieving a higher degree of territorial integration of transnational territories. If it is acknowledged that also the development and further integration of a transnational labour market is important for achieving a higher degree of transnational territorial integration, then it appears that the Common Strategic Framework and the thematic objectives (TOs) of the Common Provisions Regulation (CPR) for the ESI-Funds establish an adequate context for doing so. Interventions addressing TOs 8-10 are particularly well-suited for achieving this and they mainly deliver on inclusive growth (i.e. with TO 10 delivering partly also on smart growth). 209 But also interventions addressing TO 1 can support this, as the possibility 209 i.e. TO 8 on promoting sustainable and quality employment and supporting labour mobility; TO 9 on promoting social inclusion, combating poverty and any discrimination; TO 10 on investing in education, training and vocational training for skills and lifelong learning.

85 85 of promoting investment in social innovation exists (i.e. under Investment Priority 1b) 210 which helps to deliver on both smart and inclusive growth. Under the specific investment priorities that the ETC-regulation sets out in Article 7 (1) (b) for transnational cooperation, it is foreseen that cooperation programmes shall enhance institutional capacity of public authorities and stakeholders and efficient public administration by developing and coordinating EU macro-regional and sea-basin strategies. A development and integration of the transnational labour market can therefore also be pursued in this new context, provided that these strategies foresee actions in this respect. A comparative screening of the relevant documents adopted for the various EU Macroregional Strategies shows (see: Table 13) that in particular the EU Strategy for the Baltic Sea Region (EUSBSR) 211 and the EU Strategy for the Danube Region (EUSDR) 212 provide a considerable scope for joint action in these fields. In case of the EU Strategy for the Adriatic and Ionian Region (EUSAIR), 213 however, this scope is very limited. As regards the EU Strategy for the Alpine Region (EUSALP) that is currently under preparation, a review of the provisional and publicly available documents 214 shows that some relevant issues are considered and that the main priority 3 of Pillar 1 envisages to focus on promoting high levels of employment, with the aim of ensuring full employment in the Region (see: Annex 14). Table 13: Labour market related issues addressed by EU Macro-regional Strategies Relevant topics addressed Cross-country labour mobility Factors influencing mobility & persisting obstacles Education & vocational education (youth) Employment, further training/skills improvement and lifelong learning Inclusion of vulnerable person groups esp. into jobs Demographic change & labour markets Labour market data gathering Governance (policy coordination, cooperation structures & networks) Other (e.g. cross-border commuting, illegal labour market practices, braindrain etc.) EU Macro-regional Strategies (*) EUSBSR EUSDR EUSAIR EUSALP ST & SBA AP ST AP ST & SBA AP ST (**) /++ (tourism, maritime) ++ (tourism, maritime) / / / Intensity of consideration: 0 = not at all + = to some extent (indirectly) ++ = to a large extent (directly) (*) Abbreviations: EUSBSR - EU Strategy for the Baltic Sea Region; EUSDR - EU Strategy for the Danube Region; EUSAIR - EU Strategy for the Adriatic and Ionian Region; EUSALP - EU Strategy for the Alpine Region; ST - strategy document; SBA supporting background analysis; AP - action plan (**) Assessment of provisional documents which were publicly available as by October Source: Own elaboration on ground of documentary evidence. 210 Social innovation is understood as being ( ) new ideas (products, services and models) that simultaneously meet social needs (more effectively than alternatives) and create new social relationships or collaborations. 211 European Commission, DG Regio (2010) 212 European Commission (2010b); European Commission (2010c) 213 European Commission (2014a); European Commission (2014b); European Commission (2014b) 214 The States and Regions of the Alpine Region (2013); European Commission, DG Regio (2014)

86 86 Also the strategy and action plan for the Atlantic Ocean Sea Basin have a clear focus on joint actions in the field of labour market and employment development. The strategy underlines that the ( ) challenge is to ensure that new high-added value jobs are created at the coast and at the same that those who seek employment in the new economy have the right skills to do them. Wider mutual recognition of training, including the next generation of marine scientists, re-training and professional qualifications are required to retain maritime expertise and restore the attractiveness of maritime professions. There is a need to make better use of the experience of people retired from maritime professions and to attract young people to maritime careers. Dialogue with social partners on working conditions for fishermen and seafarers should continue. 215 Consequently the Action Plan therefore envisages, in order for the blue economy to reach its potential in the Atlantic area, to improve skills in traditional Atlantic industries such as shipbuilding, aquaculture and fisheries (Priority 1) and also to promote a socially inclusive model of regional development through exchanging best practice on enhancing the health, social inclusion and wellbeing of coastal populations (Priority 4) European Commission (2011b), pp.7, 8, European Commission (2013b), pp.3, 4, 8

87 The case of the Baltic Sea Region : main features of the transnational labour market and interventions supporting labour market integration Evolution, main features and future perspectives of the transnational labour market The transnational cooperation area Baltic Sea Region (BSR) includes eleven countries, some of which are covered with their entire national territory (i.e. PL, LT, LV, EE, FI, NO SE, DK and BY) while others are included only with parts of their territory (i.e. DE, RU). 217 Eight of these eleven countries are Member States of the European Union (see: Map 20). Within the BSR-area, more than 60% of the total population lives in about 1,050 cities with more than 10,000 inhabitants. The BSR comprises a number of European metropolitan areas such as Berlin and Saint Petersburg (being the largest metropolises with 4-5 million inhabitants each) as well as Copenhagen, Oslo, Stockholm, Helsinki, Tallinn, Riga, Vilnius and Warsaw and also a wide range of secondary growth poles. Despite the large number of urban areas, most of the programme area is characterised as intermediate or rural areas in a European perspective. Around 25% of the population dwells in the rural areas. In the south of the Baltic Sea the urban settlement patterns are denser and most intermediate and rural areas are considered as being in close proximity to a city. In the Nordic Countries and to some degree also in Estonia, Latvia and Lithuania the rural regions are often characterised as remote. 218 Map 20: The BSR transnational cooperation area Analysing the long-term evolution of labour market integration in the BSR and main features of transnational labour market interaction is challenging, as a variety of effects stemming from a complex overlay of different historical processes has to be considered (i.e. early labour market integration between the Nordic BSR Countries; staring Community-law based labour market integration following the EEC/EU-enlargements of 1973 and 1995; fall of the Iron Curtain and transition period; EU-enlargement of 2004 & persisting labour market access restrictions in larger parts of the cooperation area; very recent full application of the EU s free movement of workers principle). Considering this, it is worthwhile to be mentioned that already in 2004 a study of Nordregio intended to ( ) provoke a discussion on the emergence and the potential characteristics of a future common labour market in the Baltic Sea Region Russia: Saint Petersburg City, the Republic of Karelia and the five oblasts of Kaliningrad, Pskov, Novgorod, Leningrad and Murmansk. Germany: the six Länder of Bremen, Hamburg, Schleswig-Holstein, Mecklenburg-Vorpommern, Brandenburg and Berlin, and the Regierungsbezirk Lüneburg. 218 ESPON (2012b), p.12; VASAB (2009a), p Nordregio (2004), p.3

88 88 Formal labour market integration and labour migration flows in the BSR Labour market integration first began in the BSR in its Scandinavian part (NO, SE, DK, FI) with the conclusion of the multilateral inter-state agreement on a Common Nordic labour market in Since the establishment of the free Nordic labour market, more than one million Nordic citizens have taken up their right to move freely between, and settle down in, the differing Nordic countries. 220 This helped that bottlenecks in the labour supply of one Nordic nation s labour market have on occasion been solved by temporary labour immigration from another Nordic country. During the 1960s, the most important feature of Nordic cross-country labour migration was the significant outflow of workers from Finland to Sweden which reached a peak in 1969/1970 with around 80,000 persons migrating to Sweden in each of these years. These flows from Finland decreased in the following decade and remained at the same level as before the liberalisation, mostly because foreign workers recruitment was generally stopped in Sweden since the economy slowed down in 1972/73. Economic transformation in Sweden during the 1980s further reduced the demand for unskilled blue-collar workers from Finland and immigration to Sweden generally turned away from being predominantly labour market oriented (i.e. immigrants since then have mostly arrived to join relatives already resident in Sweden or as refugee immigrants). 221 The evolution of Nordic labour migration flows in more recent times can only be approximated by taking a look at general migration flows between Nordic countries. Towards the end of the 1990s, migration flows between Nordic countries of the BSR (excl. IS) amounted to around 32,000 persons. The flows were most significant between Sweden and Norway, followed by the flows between Finland and Sweden, Norway and Denmark and finally Denmark and Sweden (see: Figure 9). Figure 9: Migration flows between Nordic countries 1998 Roughly one decade later in 2009, all Intra- Nordic migration flows account for slightly more than 50,000 persons. They represented around 25 % of all international migration to and from Nordic countries. If one considers again only the Nordic BSR countries (excl. IS, Greenland, Faroe Islands), the total flows amounted at around 37,000 persons. Source: Nordregio (2004), p Nordregio (2004), p Nordregio (2004), p.5; HWWI (2009), p.2

89 89 Although the total flows had not significantly evolved if compared to the previous decade, one can notice a marked change in the domestic flow pattern (see: Figure 10): bilateral migration flows between Denmark and Sweden now come second right after the flows between Norway and Sweden, followed by the flows between Finland and Sweden and Norway and Denmark. Over half of all migrations in the Nordic Countries occur among population segments aged years, with the age group of years being the most mobile and being attracted by the metropolitan core cities and regional centres with a university. In the age group between 30 and 50 years the capital regions are the highest gainers, although the age group years prefers the capital core cities while the age group years prefers the municipalities around the capital core cities. The populations in their late careers are most attracted by mediumsized towns and non-urban areas, just as nonurban areas. 222 Figure 10: Migration flows between Nordic countries 2009 Source: Nordregio (2010), p.62 Formal labour market integration on grounds of the Community s free movement of workers principle started in the BSR with the EEC-enlargement of 1973, as unrestricted labour mobility had become possible between Denmark and Western Germany ( ). Then, after the German reunification of 1990 and the EEA-agreement of 1994 and the EU-enlargement of 1995, the free movement of workers principle was successively applied to the new German Länder, Norway, Sweden and Finland. During the phase from the fall of the Iron Curtain in the early 1990s until the 2004 EUenlargement, when free access to EU labour markets for workers from the Candidate Countries did not yet exist, much policy-level debate arose on a potential mass migration from East to West that could possibly also affect the labour markets of some western BSR countries. Despite an indeed noticeable outflow of people from the transition countries to Western Europe (in particular to Germany) especially during the first years of the 1990s ( ), the expected mass migration from East to West actually failed to materialise ( ) as by ( ) the mid 1990s, this outflow had however slowed markedly. This observation is also valid with respect to the experience of the Nordic countries. ( ) From the mid-1990s onwards ( ) it was short-term migratory movements that increased ( ) with one ( ) major reason for this being that most OECD-countries had by then abolished visa requirements for short-term visits from the transition countries. 223 Also the new freedom to travel abroad from Russia, which came into effect as of 1993, ( ) did not 222 Nordregio (2010), p Nordregio (2004), p.6

90 90 result in an explosive increase in emigration rates with great masses migrating to the west, as was commonly feared in Finland. 224 The EU-enlargement of 2004 has led to a very heterogeneous situation on the transnational labour market of the BSR: only Sweden, Poland and the three Baltic States applied a general open doors policy for their respective labour markets, whereas the other EEA-Member States of the BSR (DE, DK, NO, FI) applied temporary restrictions on the free movement of workers. Yet, the transitional regimes were rather different in these four countries: whereas Germany and Finland applied restrictive access regimes, 225 the rules were significantly liberalised in Denmark and Norway with the official aim to secure proper wages and working conditions for migrants, but not to restrict inward labour migration. 226 With the progressive lifting of these restrictions in 2006 (FI, NO), 2009 (DK) and 2011 (DE), however, a basically free movement of labour started to exist throughout all EEA countries of the BSR. However, the progressive opening of national labour markets did not lead to the strong increase in crosscountry labour mobility that was expected by many forecast studies. 227 Sweden, with the biggest Nordic labour market, had received in the years immediately after the enlargement only few migrant workers, while Norway received over 50% of the total Nordic labour migration inflows from EU 10 countries (e.g. in 2005, a total of 23,236 work permits were issued). In all Nordic countries, most migrant workers from the EU 10 came from Poland, Lithuania and Estonia (in total 90%), were predominantly young and male and employed in short-term and unskilled jobs, mainly in agriculture and the service sector or in construction and food industries. 228 If one looks now at the overall significance of cross-country labour migration flows in the BSR, it appears that in 2006 the working-age population having changed their region of residence accounted for only 1% of the BSR's total working-age population, compared to 1.26% in the EU 27. On the western side of the BSR, residential moves from within the EU and Norway ( ) represented 1.33% of the total working-age population; that is slightly above the average for the EU-15. This result was driven by the German regions, where 1.82% of the working-age population came from another EU region or Norway. ( ) The BSR East received ( ) four times fewer working-age residents from the other regions of the EU and Norway, equal to just 0.3% of its total working-age population. The regions in the western Baltic Sea were thus ( ) clearly the main destinations for working-age residents from other regions of the EU and Norway. 229 This general picture is confirmed by a recent study on the Central Baltic Region where aside to cross-border commuter flows also cross-country labour flows exist between the concerned countries (SE, FI, LV, EE). 230 In 2004 (when Estonia and Latvia became EU Member States) Sweden was one of three Member States (along with the UK and Ireland) that did not impose limits on labour mobility from the new Member States. Finland (together with a number of other European 224 Nordregio (2004), p i.e. EU 10 migrant workers only had the same rights as third country citizens and got access to the labour market if there was no available labour supply nationally or from EU Dølvik/Eldring (2005), pp A good overview on such studies is provided in: Nordregio (2004), pp Dølvik/Eldring (2005), pp.5-6; FAFO (2006) 229 European Commission, Directorate-General for Regional Policy (2010), p Although the study employs the terms cross-border migration and cross-border labour mobility, it becomes clear from the definition of these terms that actually cross-country labour mobility is meant. The study observes that cross-border migration is defined similarly by all four Central Baltic countries: an international migrant or immigrant/emigrant ( ) is a person, who has previously been a permanent resident of a country, moves to reside permanently in another country for a period of >12 months. However, there are significant differences between the origin and destination numbers between the countries. The span of the figures shows the difference between the countries official national data. ( ) By cross-border labour mobility, the study means ( ) the geographical mobility across national borders of labour between the regions and countries of the Central Baltic Region (see: Nordregio, 2013b, pp.31&33).

91 91 countries) removed restrictions concerning workers from the new Member States in EU enlargement and the free movement of EU citizens have had a major effect on migration flows, precipitating increased emigration from Estonia and Latvia. The impact of EU enlargement on Finland and Sweden has however been rather modest. ( ) Migration flows increased between Finland and Estonia due to the introduction of the EUs free movement rules. In 2000 about Estonian citizens lived in Finland. This number had increased to when Finland granted free access to the labour market for workers from the new Member States, and by 2012 almost Estonian citizens lived in Finland. The number of Estonian citizens in Sweden is much lower, however the number increased from persons in 2004 to 4000 persons in Although the number of Latvians living in Finland (1300) and in Sweden (4500) is relatively low, the migration flows show the same pattern ( ). When looking at the Central Baltic region, the migration flows between Finland and Sweden and Finland and Estonia are clearly the most important (see: Figure 11), with thousands of people moving annually between these countries. 231 Figure 11: Migration flows in the Central Baltic Region Source: Nordregio, 2013b, p.30 Factors stimulating or hindering cross-country labour mobility 232 During the 1990s, the early East-West migration flows in the BSR were often motivated by the large gaps in wages and living standards or dreams of a new life in the West. But even after the 2004 enlargement and the progressive lifting of the last labour market access restrictions, economic motives continue to be important determinants of mobility decisions of Europeans living in the new Member States. Wage gaps remain substantial as drivers of labour migration and better employment opportunities are a particularly important factor motivating mobility in the case of the Baltic countries. A special Eurobarometer on geographic and labour market mobility shows that when better job opportunities abroad are asked for as mobility intention, the three Baltic countries are all among the 6 leading EU 27 Member States: Lithuania and Latvia being respectively at a 1st and 2nd position and Estonia at a 5th position. 233 The language factor plays an ambivalent role in the BSR with respect to labour mobility. On the one hand, it is generally recognised that labour mobility in the common Nordic labour market ( ) benefits significantly from the fact that the various countries within this market have closely related languages, even in the case of Finland, where Swedish is the second official language Nordregio, 2013b, pp The following does not examine the variety of factors that influence on return migration, which is also of importance for the BSR. This aspect was recently analysed by a study of Eurofound which examined developments and motives for the cases of Poland, Latvia, Romania and Hungary. See: Eurofound (2012). 233 Three quarters (74%) of Latvians and 68% of Lithuanians say the chance of finding work abroad is better (in fact in each case about one third say chances are "much better") and in the case of Estonia, 53% of respondents say chances of finding work abroad are better. European Commission, Eurobarometer (2010), p Nordregio (2004), pp.4&5

92 92 Such a mobility-supporting influence can also be assumed in the case of labour migration between Estonia and Finland because of the closeness of the languages spoken in both countries. On the other hand, however, it is observed that a lack of language skills is still a major obstacle for East-West labour mobility flows in the BSR because there is an obvious need to have at least a basic knowledge of the language in the target country. This is shown by experiences in the Central Baltic Area which covers regions of Estonia, Finland, Latvia and Sweden, as ( ) the employability of a person is better, if they have the language skills of the target country ( ) and because (...) language related barriers do not relate solely to workplace tasks but also to the capability to obtain information about various issues in the target country. 235 There are also other obstacles to a stronger cross-country labour mobility within the BSR, many of which are related to the highly different labour market systems in the BSR region. These differences were analysed by a comparative study of the Baltic Sea Labour Network and exist, among others, with respect to labour laws and regulations, labour market institutions, welfare systems or policy priorities. 236 However, it appears from a review of domestic policies in BSR countries being highly relevant for cross-country labour mobility that the overall situation in the BSR is rather positive if compared to that of many other transnational cooperation areas. Data and further information from the Migrant Integration Policy Index (see: Table 10 in Section 4.1 and Annex 15) 237 shows that two thirds of the nine EEA-countries belonging to the BSR have either favourable policies (SE) or slightly favourable policies (DE, DK, FI, NO, EE). The remaining three EEA-countries apply domestic policies that are either halfway favourable (LV, PL) or slightly unfavourable (LT) for cross-country labour mobility. Still, there are many concrete examples for mobility hindrances which were identified by a study on the Central Baltic Area (see: Box 16). The policy recommendations elaborated in this respect also apply to the cross-country labour migration flows which exist in this BSR sub-area. They point to a necessary improvement of cooperation and a clarification of regulations, an improvement of the availability of information, an instalment of measures minimising language barriers and also an improvement of data collection and forecasting tools. 238 Box 16: Obstacles for cross-country labour mobility in the Central Baltic Region (SE, FI, LV, EE) People looking for employment abroad often lack sufficient knowledge of the labour market in their destination country or of issues relating to social benefits, taxes and the recognition of qualifications, housing and transportation costs. There is clearly a lack of simple step-by-step guidelines for job-seekers which explain what is important when moving to another country. There is also a lack of easily available assistance and information on EU labour market regulations and rights which makes foreign workers more vulnerable to exploitation. Employers also lack knowledge on the issues that need to be considered when recruiting people from abroad. There is lack of a simple checklist regarding the recruitment of foreign workers which generally discourages employers from hiring people from abroad. Employers do not have enough knowledge about foreign qualifications. They often have difficulty in evaluating the qualifications and skills of job seekers as there are no easily available general guidelines or translation schemes available on the mutual recognition of qualifications. This lack of knowledge in respect of skills and competences restricts employers from employing mobile jobseekers. Employers consider it too risky to employ jobseekers if they are not sure that the jobseekers skills are of a sufficient standard. The portability of social benefits and the opaque nature of most social sector regulations, as they pertain to foreign nationals, remains a key question region and may often hinder job seekers from becoming mobile. Regulatory ambiguities are even more complex between the new Member States of Latvia and Estonia and the old Member States of Finland and Sweden. High housing costs and the difficulties associated with finding suitable housing is a problem faced by mobile 235 Nordregio (2013b), p BSLN (2011) ; BSLN (2012) Nordregio (2013b), p.44&45

93 93 workers in growing regions such as Stockholm or Helsinki. Levels of economic disparity are also viewed as a considerable obstacle to cross-border labour mobility and function as barriers hindering, for example, Swedish workers from moving to Latvia. Labour organisations in particular stress that poor working conditions for mobile workers can impede mobility. Cultural differences between the countries are relatively small, even though differences clearly exist in respect of working cultures. Problems related to cultural differences and issues such as different ways of working are also closely related to the lack of tacit knowledge. Source: Nordregio (2013b), p Open labour markets, labour migration and territorial integration With the progressive opening of labour markets, the BSR has indeed become ( ) a unique example of labour market integration among countries with huge disparities in wages and living conditions ( ). 239 But it also appears that cross-country labour migration and transnational labour market integration led to quite different effects in the various BSR-countries and often also to undesirable developments. Cross-country labour migration was indeed beneficial for the receiving countries, as for instance Sweden and Finland received migrants from Estonia and Latvia that had on average a higher educational level and better professional skills than international migrants. 240 But the liberal EUregime on cross-country service provision and the now open BSR labour market also allowed companies to re-shape their manpower strategies to benefit from new sources of labour supply and wider gaps in labour costs and gave rise to new practices often under-cutting social standards in the host countries. 241 This indeed created a need in the BSR ( ) of securing orderly conditions, especially in the growing European markets for service mobility ( ) and of ensuring more efficient cooperation ( ) to develop, monitor and enforce basic principles for a real common market for work ( ). 242 Short-term benefits also emerged in the sending countries, where the early outflows of lowly skilled workers being unemployed due to structural adaptation processes had put pressure from domestic labour markets. But rather quickly, the cost of strong labour outflows was increasingly felt in Poland and in the three Baltic States (e.g. brain-drain, tax-drain, labour shortage, brainwaste 243 ), because a positive brain circulation process 244 which could have emerged with the definitive return of migrant workers back to their home country did actually not take place. In Estonia and Latvia, for example, the strong out-migration of highly qualified and -skilled workers had started to become a structural problem for the domestic economies especially in 2006 and 2007, when there was rapid economic growth in the Baltic States and substantial wage increases in many sectors. Also in Poland, increasing labour shortage was felt in many sectors and the national debate on stimulating return migration gained in momentum in 2005 and And even in the aftermath of the financial and economic crisis, no generalised mass return of migrant 239 FAFO (2006) 240 see on this: Nordregio (2013b), p i.e. temporary work agencies; out-sourcing production across the BSR; hiring of sub-contractors from abroad with posted workers, often used to undercut host country wages, work, health and safety rules or collective agreements; emerging of a growing sub-market where dubious agents reap quick profits by exploiting foreign workers through fictitious posting and inferior/illicit labour practices; problems in enforcing the equal treatment principles of the EU Directive 96/71 on the posting of workers were observed. See on this in particular for the Nordic countries: Dølvik/Eldring (2005); FAFO (2006) 242 FAFO (2006) 243 i.e. skilled workers who take up jobs below their qualification level often facing difficulties reintegrating in their home labour market after their return. 244 see on this: Nordregio (2013b), p.31

94 94 workers took place, as ( ) many emigrants opted for either a wait-and-see strategy by staying in the host countries or migrating onward to other destination countries. In Poland, the most prominent crisis impacts were ( ) the freezing of emigration, a growth in the rate of return that would have probably happened later anyway, and an increase of circularity (where migrants return to the host country repeatedly for short periods), followed by another rise in emigration. ( ) In Latvia, the global downturn increased emigration and diminished return migration, which had accelerated in 2006 and 2007 ( ). 245 More recent trends in the general territorial development of unemployment and migration also indicate an increasing polarisation in the BSR: Examination of local disparities in unemployment rates within the BSR shows similarly that in the social context, the patterns are substantially different. First, the primary divide appears to be between countries rather than within them, reflecting a situation where labour market policy in general is more a national than a regional affair. Second, because high unemployment (as well as other related social challenges) does not conform to the urban rural dichotomy (i.e. the urban paradox), for the most part, we see no particularly large discrepancies between major metropolitan areas and their surrounding territories. 246 As regards migration in the BSR, the general pattern for various types of BSR territories in the period shows the following (see: Figure 12): On the urban rural axis, predominantly urban regions have taken a clear lead, whereas predominantly rural regions are at the bottom end of the scale. Capital (city metropolitan) areas exceed all other types of regions, and only 10 urban regions (out of 238 regions in total) absorb 47% of all surplus migration in the BSR. ( ) Moreover, border regions Figure 12: Differences in net migration rates for various types of BSR territories Source: Nordregio (2014), p.12 still today perform worse than the rest of the BSR: ( ) Net migration into external border areas is down to less than half that of their respective countries, unemployment rates are higher, GDP/capita is lower and accessibility is much worse. ( ) Following the economic crisis of 2008, border regions have experienced a much steeper fall in ( ) migration or a much larger relative decline in employment than the non-border areas of the BSR. 247 Demographic change and labour market impact in the BSR Various sources indicate that the BSR is likely to face major demographic challenges in the medium- and long-term future which will have marked implications for the integration of the 245 Eurofound (2012), p Nordregio (2014), p Nordregio (2014), p.11-14

95 95 transnational labour market and a balanced territorial development of the cooperation area as such. 248 One aspect is the significant decline in the overall size of the working age population. This will cause general labour shortages and more specifically a lack of highly-skilled labour that is needed in order to ensure that the BSR is able to manage further structural change, to sustain growth and to remain competitive in the coming decades. Although this shrinking of the productive age resource as well as the related pressure of securing enough and also adequately qualified labour force tends to affect national and regional labour markets in the BSR very differently, a generalised need will emerge in the BSR to bring into work a much higher proportion of the currently inactive but potentially employable population. Another aspect is that cross-country labour migration might only in parts help to address emerging labour market imbalances, especially if the overall level of labour migration continues to be low in the BSR. But even if a further increase in cross-country labour mobility should be achieved, this can lead to marked territorial disparities both within countries and the entire cooperation area. That tends to be the case if labour migration continues to take place in an East-to-North/West direction and benefits only the large metropolitan areas or urban centres in the BSR, because a further outflow of labour will then become a major threat for the future socio-economic development of the sending countries and regions. This overall appreciation can be further substantiated by taking a closer look at the projected changes in the total BSR population up to 2020 (see: Figure 13) and in the BSR population by age groups up to 2030 (see: Figure 14). From the first projection it appears that ( ) among the countries of the Baltic Sea Region only Sweden, Finland, Denmark and Poland will denote growth of their populations until Based on the assumption that there will be no decisive changes in fertility and migration, Lithuania and Latvia will have to endure the greatest losses, followed by Germany. ( ) From the change in the employable population up to 2030, more specifically, it appears that ( ) forecasts are particularly drastic in the Baltic States, Poland and Russia. ( ) Here, it can be noted that ( ) the decline in population aged 15 to 44 will be most severe. The same holds for Germany. As this is the younger fraction of the employable population, outlooks for the time past 2030 are similarly negative. 249 Figure 13: Population forecast 2020 Figure 14: Change of Population by Age Group 2010 to 2030 Source: HWWI (2013), p.28 Source: HWWI (2013), p Nordregio (2013b), p.15; VASAB (2010), p.9; HWWI (2013), pp HWWI (2013), pp.28-29

96 Transnational interventions supporting labour market development and integration in the Baltic Sea Region Transnational co-operation in the Baltic Sea Region started already in 1992 with the Karlskrona conference in Sweden, 250 at which it was decided to jointly prepare a document on a spatial development concept entitled "Vision and strategies around the Baltic Sea 2010" (VASAB). Following a further meeting of ministers responsible for spatial planning and development in Gdansk (1993), the report VASAB 2010 Vision and Strategies around the Baltic Sea 2010 was adopted at the 3rd Ministerial Conference in Tallinn of December The VASAB 2010 document was the first transnational vision for spatial development worldwide and laid the foundation of a continuing inter-state co-operation cooperation process (VASAB-Process). For coordinating common actions and preparing proposals in-between the regular ministerial conferences, a Committee on Spatial Development of the Baltic Sea Region (CSD-BSR) was established that is supported by a secretariat. Subsequently, the CSD-BSR developed a follow up document entitled From vision to action which was to function as a practical guide on how to implement the spatial vision and to support spatial development. This document was formally endorsed by the 4th Conference of Ministers for Spatial Planning and Development in Stockholm of October Since 1997, the VASAB-process was complemented by the stronger bottom-up driven EU-funded transnational cooperation among states and regions in the BSR which started with the INTERREG IIC programme ( ) and was continued by the INTERREG IIIB programme ( ) and the ETC programme ( ). Furthermore, in 2009, a new and complementary level of cooperative action was introduced with the adoption of the EU Strategy for the Baltic Sea Region (EUSBSR). These three dimensions are now examined more closely to see in how far transnational cooperation is actually supporting labour market development and integration in the BSR. INTERREG programmes and VASAB in the period : The Baltic Sea Region INTERREG IIC programme ( ) supported a total of 45 projects with 220 partners, but it did not support any projects which focussed directly on transnational labour market development and labour market integration. The Baltic Sea Region INTERREG IIIB Neighbourhood programme ( ) has further widened the range of topics addressed by transnational co-operation in the light of the ongoing VASAB-process and supported a total of 129 projects with ERDF funding of 121 million. 253 These projects often deepened and expanded earlier networks or initiatives that were started under INTERREG IIC and have significantly widened the scope of stakeholders that were directly involved in transnational co-operation (i.e. more than 3,200 project partners). A review of the programme s project database shows, however, that aside from some projects addressing education in a transnational perspective (i.e. university cooperation e.g. BSVC - Baltic Sea 250 The conference was also attended by the European Commission and by representatives from international organisations such as the European Bank of Reconstruction and Development (EBRD), the Helsinki Commission (HELCOM) and the Nordic Council of Ministers. 251 VASAB (1994) 252 VASAB (1996) 253 Additional programme funding came from Norway (total national funds: 5.6 million) and from the former TACIS programme ( 7.1 million).

97 97 Virtual Campus or ScanBalt Campus ) no projects directly promoting transnational labour market development or labour market integration have been supported. 254 During the period , also the ongoing VASAB-process has made further progress and took important future-oriented decisions. At the 5th Conference of Ministers for Spatial Planning and Development in Wismar (September 2001), a Declaration on transnational spatial planning and development measures in the Baltic Sea Region up to the year 2010 was adopted and an updated Spatial Development Action Programme, laid down in a new report entitled VASAB 2010+, was presented. 255 Although this action programme did consider labour market related and social aspects, they were mostly seen as a complement to the transnational development of the BSR s economic system (see: Section 4.2 & Table 11). Furthermore, in 2004, preparatory work on upgrading the 1994 Vision document was launched and the 6th Ministerial Conference in Gdańsk (September 2005) instructed the CSD-BSR to focus work of VASAB also on the preparation of ( ) a long-term perspective for the spatial development of the Baltic Sea Region under active participation of the regional authorities and in dialogue with relevant pan-baltic organisations. 256 Financial support for the working groups elaborating this long-term perspective was provided by the INTERREG IIIB project East West Window. 257 The period : ETC programme, VASAB and EUSBSR In the period one can notice a clear shift away from the rather passive attitude to labour market issues that was prevailing during the early phase of transnational cooperation. A development of the BSR labour market and its further integration was now pursued more proactively in the context of transnational cooperation and also considered a common issue for the medium- and long-term development of the BSR. Key drivers for this shift were the global financial and subsequent economic crisis and the considerable impacts they had in the BSR. This motivated actors to undertake efforts in these fields to achieve a more cohesive overall development of the BSR. The ETC-programme for the Baltic Sea Region promoted for the first time cooperation on issues with a direct relevance for transnational labour market development and labour market integration. Three projects were supported under Priority 1 Fostering innovations (i.e. project Best Agers ) and Priority 4 Attractive & competitive cities and regions (i.e. projects Best Agers Lighthouses & BSLN ). Altogether, these projects received around 5.63 million of ERDF funding which corresponds to 2.7 % of the total initial ERDF funding for the BSR-programme (i.e. 208 million). The transnational project Best Agers lasted from January 2010 to December 2012 and was classified a strategic project by the BSR-programme. It involved 19 partners from 8 countries and was led by the Academy of Economics Schleswig-Holstein (DE). Best Agers aimed to sensitise employers, policy makers, the general public and the best agers themselves to the manifold potentials this age-group possesses. The first phase of the project was mainly dedicated to research in order to build an analytical framework for project and in the following, research results have been incorporated into the VASAB (2001) 256 VASAB (2005),p VASAB (2010), p.54

98 98 development of toolboxes, curricula and fourteen pilot initiatives with the aim to raise economic activity of the "best agers". Best Agers has also compiled key messages for political decision makers and other stakeholders and issued a 17 Point Programme for Sustained Employability of Best Agers (see: Annex 16). 258 After the end of the Best Agers project, a transnational extension project called Best Agers Lighthouses was approved by the BSR-programme in November It allowed eight of the original Best Agers partners and four new partners from Germany, Poland, Lithuania, Latvia, Finland and Sweden to work for two more years on the topic of employment of older people. Best Agers Lighthouses focused on implementing age management interventions in selected SMEs and public organisations in different BSR countries. The interventions followed a jointly developed methodology which is based on the results of the Best Agers project, and they were monitored and evaluated scientifically in order to determine the concrete economic consequences of introducing age management in human resources management. The companies and organisations are promoted as lighthouses in order to provide employers with a concrete and practical model approach. 259 The transnational project Baltic Sea Labour Network (BSLN - A European Model for Improvement of Interregional Labour Policy) aimed at promoting cooperation on transnational labour market questions and labour mobility by bringing together representatives from the trade unions, employers, politicians, labour market experts, academics and public officials. As a knowledge network, BSLN brought together experts from many disciplines to provide a comprehensive picture of the challenges that the BSR is facing. As a forum of development for decision-makers and policy implementers, BSLN put key people together to combine knowledge and ideas to develop strategies, policies and practical solutions. This policy dimension was also reflected by the involvement and positive reaction of important sub-regional actors like the Baltic Development Forum and the Baltic Sea Parliamentary Conference. At the final project conference in Hamburg on 15 to 16 November 2012 with around 240 participants, the participants agreed on a conference resolution and 13 central recommendations for developing strong labour markets in the BSR. The most important achievement was the creation of the permanent tripartite Baltic Sea Labour Forum (see: Box 17), which ensures the sustainability of the EU-part financed project. The forum started to work in January 2012 during the German Presidency of the Council of the Baltic Sea States (CBSS) and promotes continuous transnational cooperation between labour market actors. 260 Box 17: The Baltic Sea Labour Forum (BSLF) The BSLF is the only cooperation body where trade union, employer organisation parliament and governmental organisation representatives work together to create sustainable regional labour markets within in the BSR. To date the BSLF comprises 28 member organisations from 8 countries (DE, DK, LT, LV, EE, RU, FI, PL) and involves the Baltic Sea Parliamentary Conference Secretariat (BSPC) as well as the Council of the Baltic Sea States Secretariat (CBSS). A further nine institutions are currently involved as observers in the BSLF. Under the auspices of the BSLF, transnational social dialogue and regional co-operation in the BSR have reached a permanent status. The mission of BSLF is to work together through social dialogue in order to promote fairness and competitiveness. The core objectives are: finding joint solutions to commonly identified challenges promoting transnational social dialogue, based on the responsibility of social partners for the development ; BSLN (2012); Nordregio (2013b), p.22

99 99 of labour market policies in the Baltic Sea Region influencing policy- and decision-making in the field of labour market policies, e.g. by issuing joint opinions and recommendations networking and exchange of experience between the social partners and political institutions in the Baltic Sea Region BSLF is currently focusing on the working areas youth employment and mobility of labour. Both subjects are of particular importance for the labour market development and consequently for the sustainable economic growth in the Baltic Sea Region. Further work of the BSLF was partly financed by the European Commission (DG Employment, Social affairs and Inclusion) from November 2011 till January 2013 and afterwards by the project Cross Border Information Management in the Baltic Sea Region which was partly financed by CBSS Project Support Facility (July 2013 July 2014). Sources: ; In June 2006 the European Commission presented a communication concerning the EU Strategy for the Baltic Sea Region (EUSBSR) 261 and this strategy was adopted by the European Council in December Through its objectives, priority areas and horizontal actions, the EUSBSR aims to provide an integrated framework for improving the environmental condition of the sea, transport bottlenecks and energy interconnections as well as facilitating the development of competitive markets across borders and common networks for research and innovation (see: Box 18). Issues relating to labour market development and labour market integration in the BSR (i.e. common labour market) are clearly given attention in the Commission s supporting background analysis for the EUSBSR 262 and the strategy itself sees a need to increase labour market inclusion and integration if high productivity, high levels of innovation and sustainable economic growth are to be achieved in the BSR. This assigned level of importance is also translated into the detailed Action Plan of June 2009 and its updated version of 2013 which better aligns the strategy objectives to the new strategic objectives Europe 2020 Strategy. 263 Box 18: Objectives, Priority Areas and Horizontal Actions of the EUSBSR The EUSBSR s new strategic framework of 2012 defines three Objectives which represent the three key challenges of the strategy: (1) saving the sea, (2) connecting the region and (3) increasing prosperity. Each objective relates to a wide range of policies and has an impact on the other objectives. The objectives guide an array of Priority Areas which are specific areas for macro-regional cooperation that address the key challenges and opportunities in the Region. The Priority Areas are implemented by regional stakeholders through detailed actions and Flagship Projects. Also a number of Horizontal Actions are included that are essential for the successful implementation and coherence of the strategy. They complement the objectives and Priority Areas and also set out actions and flagship projects. Source: European Commission (2012) ; i.e. COM(2009) 248 final, Brussels see: European Commission, Directorate-General for Regional Policy (2010) 262 i.e. i.e. Commission staff working document European Commission, Directorate-General for Regional Policy (2010) 263 European Commission (2013a)

100 100 Among the seventeen EUSBSR-Priority Areas (PAs) of the updated action plan, several address issues that are particularly relevant for cross-country labour mobility as well as for transnational labour market development and integration. The PA on Education Developing Innovative Education and Youth, for example, highlights that increased prosperity presupposes access to good education and training for all, an effective and inclusive welfare system and a well-functioning labour market supporting geographical, professional and socio-economic mobility. To achieve this, the PA sets out a number of actions, flagship projects and potential flagship projects (see: Box 19). 264 But also a number of other PAs contain aspects that are relevant for transnational labour market development and labour market integration. Examples are the PA on Crime (i.e. combating labour exploitation and related human trafficking), the PA on Health (i.e. health as a precondition for labour market inclusion), the PA on Internal Market (i.e. administrative burdens due to strongly regulated labour markets) and the PA on SME (i.e. entrepreneurship training as part of the school curriculum). Box 19: Focus of the PA on Education Developing Innovative Education and Youth Action Develop new methods for training entrepreneurship and innovation : Flagship project Baltic Training Programme (BTP). Action To meet the challenge of demographic changes and to combat youth unemployment : Flagship project Quick IGA. Action Making lifelong learning and mobility a reality within the BSR : Potential flagship project BSR Mobility Database & Baltic Summer job programme. Action Enhance cooperation on a voluntary basis between the regional universities of the BSR : Flagship project Baltic University Programme & Potential flagship project BUP-GreenLab. Action Closer integration and cooperation of youth policy structures : Potential flagship project Baltic Sea Youth Forum & Value-based leadership for young leaders in the volunteer sector. Action Closer integration and cooperation of youth policy structures : Potential flagship project Network the local youth policy structures. Action Social inclusion : Flagship project Baltic Sea Labour Forum & Potential flagship project Learning for Life and Work in School LLWS Baltic. Among the five EUSBSR-Horizontal Actions (HAs), especially the HA on Neighbours addresses labour market relevant issues from a cross-border perspective in order to make the BSR competitive. As regards the free movement of labour, however, a number of issues need to be addressed. On the one hand, the employers in the receiving countries have to cope with many challenging legal issues. On the other, the employees themselves have to know about their rights and responsibilities. And last but not least the sending countries suffer from the loss of their workforce, especially where there is excessive brain drain. Coordinated activities are needed to provide structured information, enable labour market monitoring, improve changing of good practices (especially in the border regions) and involve key partners, including those from third countries, in dialogue. 265 Consequently, the related action Fostering labour market related activities especially in the cross-border context foresees three potential flagship projects on Information centres network and labour market monitoring in the BSR, on the Baltic Sea Labour Forum cooperation with Russia and on Speeding up development of transnational mobility in the Baltic Sea Region (see: Box 20). 264 European Commission (2013a), pp European Commission (2013a), pp

101 101 Box 20: Focus of the HA on Neighbours (potential flagship projects) Fostering labour market related activities especially in the cross-border context : Some cross-border labour market information centres have started monitoring the labour market or have only been doing so for a limited time. Continuing this monitoring and starting to do so in other border regions is very important. It is vital to develop common indicators in order to produce comparable data. There are rapid changes in the mobility of the region s labour force and there is a need to develop activities and strategies in response to the challenges those changes pose. Border region information centres are structured differently and different problems exist but there are also many problems in common. It would be mutually beneficial to learn from the experience of others and to exchange ideas, solutions and methods. Baltic Sea Labour Forum cooperation with Russia : The Baltic Sea Labour Forum (BSLF) working together through social dialogue was established in November 2011 in Hamburg. The core aim of the Forum is to promote social dialogue and tripartite structures, since cooperation is a crucial element of sustainable economic growth and social development in the Baltic Sea region. The Forum is a network for the exchange of experience and communication and aims to promote cooperation between the key actors (based on the BSLF memorandum of understanding). However the engagement of Russian partners, who have been involved in the BSLF discussions, is not guaranteed. But as part of the Baltic Sea region, Russia is an important partner and must therefore be involved in the active work of the Forum. Speed up development of transnational mobility in the Baltic Sea Region : Transnational mobility actions are considered a central issue in the process of making Europe a society and economy based on knowledge that is a reference for the other areas of the world. The modern labour market in many countries suffers a range of problems connected both with lack of qualified personnel and with insufficient competence of already available labour force. The aim of this potential flagship project is to establish content-related networking structures between Baltic Sea region cities in order to realize a fostered implementation of mobility. Several target groups will be included e.g. a) apprentices in initial vocational education, b) qualified employees, c) teachers, d) students. Also in 2009, at the 7th conference of the BSR ministers responsible for spatial planning and development in Vilnius (October 2009), the VASAB Long Term Perspective (VASAB-LTP) was adopted which will be pursed in parallel to the implementation of the EUSBSR. The VASAB-LTP is a transnational strategic spatial planning document on territorial integration, which leads to territorial cohesion in the Baltic Sea Region. It ( ) also proposes a list of actions to stimulate territorial development potentials and to overcome the existing gaps for both the coming years and in a longer run. 266 Aspects relating to labour force development and labour market integration occupy a prominent place already in the chapter setting out the trends and challenges for territorial development in the BSR (see: Annex 17) and re-appear under many of the policy guidelines and specific actions that the VASAB-LTP promotes to achieve the territorial cohesion perspective. While the labour force and especially the highly skilled labour force concentrates in the BSR metropolitan areas and larger urban centres, an improvement of the quality of the labour force and a further mobilisation of untapped labour potentials is needed in small and medium sized cities and especially in the rural areas. Social cohesion problems are caused by the demographic trends and labour force movement in the BSR, as especially urban-rural disparities are being magnified by recent labour force movements from the new EU Member States to the gradually opening markets of the western BSR countries. Finally, a closer link between improved and more reliable transport connections is seen, because they support greater labour mobility in the BSR and also the development of integrated cross-border labour markets based on commuting. Consequently, point 9 of the VASAB-LTP s Action Agenda foresees to organise ( ) a pan-baltic conference to work out measures for counteracting the impact the demographic trends and labour 266 VASAB (2010), pp.5&14

102 102 market development have on the urban-rural polarisation and social cohesion in the Region. But also other points of the agenda offer scope for common initiatives in the field of transnational labour market development and integration is respect. These are point 1 on developing and implementing a BSR cooperation strategy for the metropolitan areas of the whole Region by involving relevant urban cooperation actors (e.g., business support organisations, investment agencies, marketing agencies and national/regional authorities, etc.); point 5 on creating and spreading within the BSR a model solution on using a stakeholder approach in enhancing the potential of small and medium-sized cities and towns within the metropolitan areas as international centres of innovation and specialised services; point 7 on launching joint transnational and cross-border initiatives to combine the development of metropolitan areas and their rural surroundings in a better way; point 10 on addressing the obstacle of cross-border deficits in primary (TEN-T) and secondary (interregional connections) transport networks of the BSR countries for developing transborder labour markets in the Region. Considering the attention that the VASAB-LTP devotes to cross-border mobility and crossborder labour market integration in the BSR, it should be mentioned that such aspects were also directly addressed by and actively promoted under the cross-border Central Baltic INTERREG IVA Programme The programme highlighted that one of the major questions related to the development of a stable labour market in the programme area is the better utilisation of both the internal and the potential external labour force and suggested in this respect that better utilisation of the labour force is a prerequisite for the development of the Central Baltic region s ability to confront internal and external challenges such as globalisation and labour market imbalances. 267 As also strong cross-country labour migration flows exist within the Central Baltic Region 268 due to the sea which separates the main economic centres Stockholm and Helsinki from Tallinn and Riga, it is worthwhile to mention the achievements of the project CentralBaltic JobFerry (see: Box 21) which can also be interesting from a transnational perspective. Box 21: Central Baltic INTERREG IVA Programme CentralBaltic JobFerry The project CentralBaltic JobFerry aimed at increasing the mobility of job and education seekers by identifying those professions currently exhibiting a high demand for labour and by generally enhancing the flow of information across the Central Baltic region. The project s main outcome was the establishment of a multilingual platform that provides information for job and education seekers as well as employers and experts concerning job and educational opportunities in the Central Baltic region. At the final project conference, policy recommendations were discussed and further developed with the participants from local and regional public authorities, national ministries, universities, employment agencies as well as employers' organisations and labour unions. The project also showed that there is a need for in-depth analyses and comparable data on cross-border labour mobility in order to better understand the characteristics of mobility within the EU; more efficient integration of cross-border labour mobility in EU regional policies; clarification of roles of labour market actors in regard to mobility issues within the national and regional context; intensification of cooperation between labour market actors at different levels; 267 Strong cross-country labour migration flows exist mainly between Sweden and Finland and between Estonia and Finland, but at a lower level also between Sweden and Latvia or Estonia. Also a high level of cross-border commuting exists mainly between Estonia and Southwest Finland. See: Nordregio (2013b), p Nordregio (2013b), p.23

103 103 exchange of experiences with other European regions on how to facilitate mobility especially at regional level; extended support for job-seekers to overcome obstacles to cross-border mobility, e.g. by making language courses easily accessible. Sources: Nordregio (2013b), p.11 ; Outlook on the period The transnational BSR programme for aims to strengthen integrated territorial development and cooperation for a more innovative, better accessible and sustainable Baltic Sea Region (overall objective). Interventions shall look for joint solutions to common issues and funding for this will be made available by four thematic priorities: priority 1 on capacity for innovation, priority 2 on efficient management of natural resources, priority 3 on sustainable transport and priority 4 on institutional capacity for macro-regional cooperation (see: Figure 15). Figure 15: Objective tree of the BSR transnational cooperation programme Source: ETC-Programme BSR (2014), p.22 Two of these four priorities will also allow pursuing cooperation in the fields of transnational labour market development and labour market integration: Under priority 1, the programme explicitly envisages support to non-technological innovation which also places particular attention on social innovation and demographic change. However, it would have been desirable to include among the mentioned examples for actions also some that directly point to social innovation in the field of transnational labour market development. Under priority 4, the programme will support an increase of transnational capacity for implementing the EUSBSR and for working on common priorities with the partner countries (specific objective 4.1) and also support coordination of macro-regional 269 ETC-Programme BSR (2014)

104 104 cooperation with a view to facilitate the implementation of common priorities with the partner countries (specific objective 4.2). Both focuses are particularly relevant for transnational labour market development and labour market integration, if one considers the prominent role that these aspects play in the context of many of the EUSBSR s Priority Areas (PA) and in one Horizontal Action (HA). 270 The priority will provide seed money for a preparation of projects under PAs / HAs and directly support to Priority Area Coordinators and Horizontal Action Leaders to carry out additional tasks related to their role as a coordinator/leader. Overall, it can therefore be concluded that the BSR-programme opens up sufficient windows of opportunity for further deepening and widening the started transnational cooperation on labour market development and integration. 270 esp. Priority Area on Education Developing Innovative Education and Youth with its many labour-market relevant actions and flagship projects as well as the Horizontal Action Neighbours with the three potential flagship projects Fostering labour market related activities especially in the cross-border context, Baltic Sea Labour Forum cooperation with Russia and Speed up development of transnational mobility in the Baltic Sea Region.

105 The case of the Alpine Space : main features of the transnational labour market and interventions supporting labour market integration Main features and future perspectives of the transnational labour market in the Alpine Space The Alpine Space (ASP) transnational cooperation area encompasses seven countries, some of which are covered with their entire national territory (i.e. AT, LI, SI and CH) while others are included only with parts of their territory (i.e. DE, FR, IT). 271 Five of these seven countries are Member States of the European Union (see: Map 21). The ASP area represents an attractive working and living space. It is home to almost 70 million people, which operate one of the most dynamic economic growth areas in Europe generating a total GDP per capita of 22, Dominated by the Alps in its very centre and their surrounding foothills and lowlands of the peri-alpine belt, the transnational area also has a great cultural and linguistic diversity, where German, Latin and Slavic cultures and languages meet. The main alpine metropolises, which even play an important role in a worldwide perspective, are located at the periphery of the Alps e.g. Lyon, Milano, Munich, Vienna and Zurich and also a wide range of secondary growth poles. However, urban areas are a minor part of the programme area, which is in a European perspective rather dominated by intermediate and rural areas and areas in close proximity to a city. Furthermore, there are a number of remote regions. 273 Map 22: The ASP transational area Map 22: Travel time to border by road Within the ASP area, formal EU labour Source: Gloersen et al. (2013), p. 24 market integration and especially cross-border commuting is a reality for decades. Switzerland 271 France: Rhône-Alpes, Provence-Alpes-Côte d Azur, Franche-Comté, Alsace. Germany: districts of Oberbayern and Schwaben (in Bayern), Tübingen and Freiburg (in Baden-Württemberg). Italy: Lombardia, Friuli Venezia Giulia, Veneto, Trentino-Alto Adige, Valle d Aosta, Piemonte and Liguria. 272 Portrait of the Alpine Space Programme, available at: ESPON (2012b), p.53

106 106 and Lichtenstein are two EFTA countries located at the very heart of the programme, with which labour market interaction are the most intense also due to short travel times to borders (see: Map 22). Both countries are associate members of Europe's border-free Schengen area. Since 1999, an EU-Switzerland agreement allows the freedom of movement giving citizens the right to enter, live and work in both territories. Since the entry of Slovenia into the European Union (2004) and its entry to the Schengen area (2007), restrictions for the labour market access of workers were lifted for all ASP countries. However, the Swiss popular vote of against mass immigration recently challenged this principle. Main features and future perspectives of the transnational labour market The Alpine Space area entails a variety of borders. Out of the seven ASP countries, only France, Germany and Italy belong to the six EEC founding members which apply the Community principle of a free movement of workers since a long time: first on ground of the two transitional regimes of 1961 and 1964 (i.e. EEC-Regulations and Directives of 16 August 1961 and of 25 March 1964) and definitively since 1968 on ground of Council Regulation 1612/68. Then, after the EEA-agreement of 1994 and the EU-enlargement of 1995, the free movement of workers principle was successively applied to Austria, Liechtenstein and Switzerland. In 2002 a step forward was taken with the entry into force of Agreement on the Free Movement of Persons between the EU and Switzerland, where the right of free movement was complemented by the mutual recognition of professional qualifications, by the right to buy property, and by the coordination of social security systems. Also temporary access restrictions for workers from Slovenia were lifted in all Member States in 2006/2007 and in May 2011 for Austria and Germany. They should also be eliminated also in Liechtenstein (in 2014) and Switzerland (in 2016). However, a potential backward step was taken with the 2014 Swiss popular vote against mass immigration. Indeed, this vote brings a change in Switzerland s immigration policy. Before 2009, all popular initiatives to restrict, reduce or stabilize the number of foreigners in Switzerland had all been rejected. For the third time in the history of popular votes on foreigners, an initiative managed to get a majority vote by referendum. Nevertheless, the Free Movement of Persons Agreement will remain in force until the legal position changes, which should not happen over the next three years. 274 Very little data is available on the formal labour market integration and labour migration flows at the transnational ASP level. In May 2011, after 7-year temporary restrictions, the German labour market along with the Austrian was opened up to the 8 mainland countries which entered the EU in 2004 EU, incl. Slovenia. Generally, the opening up of labour markets in Germany did not give rise to a large inflow of migrants. Indeed, the total net inward movement of workers in Germany amounted to over 100,000 in 2011, which is far below the projections of the Institute of the German Economy (IW). Inflows from Slovenian nationals amounted to 105 persons per month on average in 2011, and to 188 for the first four months of Consequences on the Austrian labour market have been more important with a rapid increase of inflows [ ] and one year afterwards, the number of workers entering from these countries was only slightly higher than forecast. 9.5% of the EU8 274 The Constitution needs to be amended. The next steps to be implemented are therefore the legislation drafting by the Federal Department of Justice and Police, a submission to consultation, and a three years delay for implementation. (Source:

107 107 national employed in Austria were from Slovenia, which makes it the 4 th largest group after Hungary (40%), Poland (25%) and Slovakia (16%). About one third of them are commuters. In Germany and Austria, these new EU8 mainly occupy works of seasonal nature. A change in gender gap was also observed, with women being more and more attracted, while men remain a majority. 275 No rich documentation and in-depth analyses are available for the Alpine Space area as a whole, as it is the case for other EU15 cooperation areas where migration flows are high. Only punctual information at local or national level can be gathered. The existing data gap on the Alpine Space labour market makes it difficult to deal with this issue in a transnational perspective. However, a mapping of the labour market centres shows that those with low travel-to-work times are most often found at the northern and southern edges of the Alpine Space, while in the central part rather most often high travel-to-work times can be found (see: Map 23). Map 33: Labour Market Centres and travel-to-work time (min) Cross-border commuting in border regions is high for most ASP countries. In France, in Alsace, 8% of the workers cross the border to Switzerland, for most of them, while a lower percentage goes to Germany. Further south, the crossborder metropolitan region of Geneva is one of the most dynamic in Europe. Significant socio-economic performances gap induced pull factors (differentials in wages and incomes) and push factors (differentials in unemployment rates). About Source: Tappeiner et al. (2008b) workers were commuting across the border to Geneva in i.e. one quarter of the total number of cross-border workers in Switzerland. These driving forces for a polarisation of labour flows resulted in strong cross-border economic interdependencies between the metropolitan core and its borderland periphery. Furthermore, Geneva is quasi geographically surrounded by the French territory with implications on scarce land availability and limited national transportation. Cooperation allowed ensuring the smooth operation and attractiveness of the metropolitan centre. 277 Only a small proportion of those working in border regions in Germany are employed outside the country, with the exception of Freiburg where 5% of those in employment work in Switzerland. Indeed, in the regions which border Austria (Schwaben, Oberbayern and Niederbayern) figures are always less than 1% of those in employment and well below 0.5% in those further north which border the Czech Republic (Oberpfalz and Oberfranken). The flows are larger in the other 275 European Commission, DG Employment, Social Affairs and Equal Opportunities (2011), p.108; European Commission, DG Employment, Social Affairs and Equal Opportunities (2012), p OCSTAT, ESPON (2012a)

108 108 direction, from the Austrian regions into Germany (1-2% from Oberösterreich, Salzburg and Tirol), though there are much larger flows still from Vorarlberg into Switzerland (over 8% of those in employment). There is equally only limited commuting into Austria from Italy in the south (the figure being much less than 0.5% of those in employment in the bordering regions of Friuli-Venezia-Giulia and Veneto, though slightly more in Bolzano/Bozen, where linguistic factors could play a facilitating role) or, indeed, from Slovenia to the south-east (just over 1%). Commuting in the ASP is relatively intense when considering that across the EU, less than 1% of people in employment commute across national borders. 278 Several Alpine Space countries are among the countries having the higher ration of in-commuters: Liechtenstein ranks second after Monaco with about 360 in-commuters for 1000 inhabitants and Switzerland ranks 5 th with about 30 in-commuters for 1000 inhabitants, while Austria also has a high ratio of in-commuters (5). Commuting to these countries is steadily rising since The most important branch of cross-border commuting is manufacturing. However, the alpine region - in particular Austria, Switzerland, France and Italy - stands out for Hotels and restaurants, as tourism in their alpine territories tends to prosper almost all-year-round. Age distribution of the cross-border commuters varies across countries. Younger age groups i.e. younger than 30 years are significantly represented in the border regions between France and Italy and between Germany and Austria. In contrast, older cross-border commuters are only shown between France and Germany and most commuters belong to the age group. Crossborder labour mobility is stimulated by several factors to which the main are income difference, infrastructural accessibility, housing market. A Commission study identified them as pull effects i.e. attraction of the markets of destination. In the specific case of the Alpine Space area, the EU- Swiss free movement agreement in force since 2002 also plays a role. 279 On the other hand, cross-border labour mobility is most probably hindered by several common factors such as languages and a lack of information. Especially in the ASP transnational areas, the importance of other factors tend to rise. Although there is a predominantly positive perception of foreign commuters clear signs of felt displacement in some border areas have been identified already in 2009, mainly in Switzerland. In the country, covering 27% of all in-commuters from the neighbouring countries of Italy, France and Germany, in-commuters are conspicuously considered as competitors to domestic workers [ ] due to the reason that in-commuters occupy well remunerated, attractive job positions in great quantities. 280 The recent Swiss popular vote against mass immigration brought this situation to the general attention. Quotas and quantitative limits shall now be set by the Federal Council. They will be allocated to the cantons taking into account a range of indicators relating to the economy and the jobs market. 281 Also further progress could be made in the Alpine Space with respect to domestic policies that are important for a cross-country mobility of workers. Data and further information from the Migrant Integration Policy Index (see: Annex 18) 282 show that five out of the seven countries belonging to the ASP area only have halfway favourable policies (DE, FR, SI, CH, AT). Only Italy applies slightly favourable domestic policies for cross-country labour mobility, while 278 European Commission, DG Employment, Social Affairs and Equal Opportunities (2011), pp European Commission, DG Employment and Social Affairs (2009) 280 European Commission, DG Employment and Social Affairs (2009) 281 Source: the Swiss confederation online administrative portal 282

109 109 Liechtenstein has not been evaluated. These policies also reflect on the ASP countries readiness to welcome workers from abroad. The ASP is likely to face major demographic challenges in the medium- and long-term future, which will have marked implications for the integration of the transnational labour market and a balanced territorial development of the cooperation area as such. A shrinking labour force will be a problem for many Alpine Space regions, in particular in the northeastern part of the area i.e. Map 24: Demographic types of Alpine regions corresponding to blue areas on the map (see: Map 24). On the other hand, green (Rural growing areas) and yellow (Dynamic city and rural) areas are less confronted to demographic challenges. However, the Alps have started to age long before the rest of Europe [ ] a fundamental demographic difference between the Alpine space and Europe as a whole is represented by the far greater weight of out-migration, mainly of men and women belonging to the younger age Source: Demochange project (2012) groups, as a factor conducive to structural ageing. [ ] Brain drain, and more generally the drain of human resources, has certainly not stopped in the last fifty years. It is rightly perceived as one of the most serious threats to the economic and social development, or survival, of the Alpine area [ ] As a matter of fact, the symmetrical phenomenon of brain gain is now visible in many parts of the Alp [ ] One of the most alarming finding is that a growing polarisation can be detected between the main valleys and the foothill belts, where population concentrates, and the communities located at higher altitudes or in the most secluded valleys, which are experiencing growing marginalisation. 283 To conclude, the Alpine Space area has a quite considerable diversity as regards future labour market challenges. Joint actions at transnational level could address these shared needs and size these development potentials more intensively EU-funded interventions in the Alpine Space area supporting labour market integration Already before INTERREG, long-standing cooperation between the regions and national governments of the Alpine Area exists. Three large-scale cross-border Working Communities e.g. ARGE ALP (AT, CH, DE, IT), ALPS ADRIATIC (incl. AT, IT SI) and COTRAO (FR, IT) experimented transnational cooperation some twenty years before INTERREG programmes were set up. ARGE ALP was founded in 1972, citing that cross-border cooperation is essential, considering that the consequences of economic, environmental aspects and social developments do not stop at state borders. It aims at dealing collectively with concerns and problems in the ecological, cultural, social and economic fields as well as strengthening the mutual understanding between peoples in the Alps and the 283 Viazzo (2012)

110 110 consciousness of collective responsibility towards the common alpine habitat. 284 ARGE ALP encompasses Salzburg, Tyrol, and Vorarlberg (AT), Bavaria (DE), South Tyrol, Lombardy, and Trentino (IT) and Graubünden, St. Gallen and Ticino (CH). Three years later, in 1978, the Working Community of States and Regions of the Eastern Alpine Regions - or ALPS ADRIATIC - was created by the Autonomous Region of Friuli-Venezia Giulia and the region of Venezia (IT), the Carinthia, Upper Austria and Styria provinces (AT), the Socialist Republic of Slovenia (SI), and the Socialist Republic of Croatia (HR). The main areas of interest of its members are trans- Alpine traffic links, port traffic, generation and transmission of energy, agriculture, forestry, water management, tourism, environmental protection, nature conservation, landscape care, preservation of cultural and recreational landscape, regional development, settlement development, cultural relations, contacts between scientific facilities. 285 The Western Alps Working Community (COTRAO) aims to involve partners in the same geographical area in the management of the Alpine region, particularly in the sensitive areas of the mountain economy, protection of the nature and transport policy. Born in 1982, the Working Community of the Western Alps and includes Rhône-Alpes, Provence-Alpes-Côte d'azur (IT), Val d'aosta, Piedmont, Liguria (IT) and Valais, Vaud, Geneva (CH). It later gave birth to the Alps Mediterranean Euroregion. A more recent and larger organisation was born with the Alpine Convention signed in 1991, under the form of a framework agreement for the long-term protection of the alpine natural ecosystem and for a sustainable development of the Alpine region. It was ratified by eight alpine States: Austria, France, Germany, Italy, Switzerland, Liechtenstein and Monaco, and by the European Union, and entered into force on March This intergovernmental organisation intends to answer the urgent need for a long-term protection of the alpine natural ecosystem and for a sustainable development of the Alpine region. Two-year term Working Groups are set up with the aim to study ongoing developments as well as to report progress to the Alpine Conference and the Convention Permanent Committee. If most working groups deal with environmental issues, 286 an ad hoc expert group for the elaboration of RSA5 on Demographical changes was formed in This Working Group, presided over by Italy, shall prepare a Report on the State of the Alp focusing on regional development factors for better handling of demographic change in the Alpine Space incl. employment, innovation, brain drain issues. In addition, also several bilateral EURES cross-border partnerships exist today in the Alpine Space e.g. EURES Oberrhein (FR-DE-CH), EURES Bodensee (DE-AT-CH-FL), EURES TransTirolia (IT-AT-CH) and EURES TransAdria (IT-SI). This European job mobility portal encourages border workers mobility, reducing the obstacles to mobility and putting in place information services for workers on living and working conditions on either side of the borders. These structures, networks and partnerships help to sustain and further develop the crossborder labour market integration process in the Alpine Space area. 284 Source: (DE, IT) 285 Joint Declaration of Venice, Alpine Convention Working Groups are eleven: (1) Working Group Transport (2) Working Group UNESCO World Heritage (3) Natural Hazards Platform (4) Ecological Network Platform (5) Water Management Platform in the Alps (6) Large Carnivores, Wild Ungulates and Society Platform (7) Ad hoc expert group for the elaboration of RSA5 on Demographical changes (8) Working Group Macro-regional strategy for the Alps (9) Mountain Farming Platform (10) Working Group Mountain Forests (11) Energy Platform (Source:

111 111 INTERREG and ETC-programmes of the period Transnational cooperation in the Alpine Space Area started in 1996/1997 through an ERDF- Article 10 Joint Pilot Action programme ( ), but it did not address issues relating to the development or integration of the transnational labour market. The Alpine Space INTERREG IIIB programme ( ) widened the range of topics addressed by transnational co-operation and supported a total of 58 projects with ERDF funding of 125 million. Two priorities of the INTERREG IIIB programme offer a framework for transnational actions targeting labour market. Priority 1 on the Promotion of the Alpine Space as a competitive and attractive living and economic space in the scope of a polycentric spatial development in the EU entails a Measure 2 Competitiveness and sustainable development under which a possible action is the mutual recognition of qualifications, networking and cooperation of labour ex-change and professional associations with a view to promoting mobility of labour force. Similarly, Priority 2 on the Development of sustainable transport systems with particular consideration of efficiency, inter-modality and better accessibility quote under its Measure 2 Improvement of existing and promotion of future transport systems by large scale and small scale intelligent solutions such as inter-modality the general objective to increase the knowledge about the possibilities of, the acceptance for and the use of modern information technology for all social, labour and cultural groups of the Alpine Space. 287 However, a review of the programme s project database shows that aside from some projects addressing workers mobility in a transnational perspective (e.g. E-Motion - E-learning for population mobility ) no projects directly promoting transnational labour market development or labour market integration have been supported. 288 It has to be noted that this statement also applies to the following ETC-programme of the period , although it sets among its Guiding Principles an Innovation-oriented approach seen as a basis for [ ] easing accessibility to labour markets. 289 Furthermore, in its first priority Competitiveness and Attractiveness of the Alpine Space, one element in the rationale mentions actions at transnational level [ ] to increase job opportunities and stabilise labour markets in disadvantaged regions with labour market services being identified among the main beneficiaries. 290 However, as in the previous period, projects addressed transport and innovation issues but none of them mention transnational labour market. Although often intense cross-border commuting exits along many borders within the Alpine Space area, transnational INTERREG Programmes (and their cooperation activities) have only paid very little attention to transnational labour market integration. This might originate partly from the intention to be complementary to cross-border cooperation programmes, but certainly also from the implications which the application of temporary restrictions to labour market access of workers from new EU Member States until 2006 (in Italy) and 2011 (in Germany and Austria) had in a transnational perspective (i.e. little cooperation needs & opportunities). 287 INTERREG IIIB-OP Alpine Space, December INTERREG VB Alpine Space (2014) 290 INTERREG VB Alpine Space (2014), p.39

112 112 Outlook on the period Also the new Alpine Space programme does not focus on aspects related to transnational labour market integration, although demographic change and the recent Swiss referendum of February 2014 will indeed have clear implications in the transnational context. The new Programme too decided not to tackle the issue of labour market considering it would be better addressed at a lower scale. Preliminary territorial analysis, carried out in the Strategy Development for the ASP, considered labour market issues to be important in all parts of the Alps, and that a significant number of them were cross-border. 291 Although, it did not consider relevant addressing these issues at the transnational level, as the added value of strategy design or policy implementation at the level of the Alps (as compared to corresponding policies at the national or regional level) could not be identified. However, the still on-going elaboration of the EU s Macro-regional Strategy for the Alpine Space (EUSALP) might represent an alternative instrument by which such matters could be addressed in a transnational context. The direct involvement of the national level should help address this issue of transnational labour market. The public consultation questionnaire on the draft EUSALP proposes Stimulate an Alpine Job Market in its multiple choice question concerning the main objectives EUSALP should concentrate within Pillar 1 (see: Box 21 and Annex 14). 292 The macro-region strategy is expected to somehow tackle the labour market issue through actions under Pillar 1, Priority 3 "Promoting high levels of employment with the aim of ensuring full employment in the Region. Nevertheless, the transnational dimension of the labour market is not developed as a key issue, most likely due to the already mentioned lack of transnational data concerning this issue at the Alpine Space level. However, the EUSALP could indeed be good framework where especially a further improvement of the often not yet optimal domestic policies that are relevant for cross-country labour mobility issues is dealt with. Box 21: Towards an EU strategy for the Alpine Region (EUSALP) The process of developing a macro-regional strategy in the Alpine Region started with the Common Declaration adopted during the Summit of Regions - Strategy for the Alps on March, 2010 at Mittenwald, Bavaria. Subsequently, with the Resolution the 23 rd of May 2013 the European Parliament called for a macro-regional strategy for the Alps to be the subject of a comprehensive evaluation by the Commission, based on objective criteria and measurable indicators. On December 2013, the European Council invited the Commission, in co-operation with Member States, to elaborate an EU Strategy for the Alpine Region, which, the Working Document An Alpine macroregional strategy for the European Union was presented the 10 th of July 2014 and was under public consultation from July 16 th to October 15 th Source: t33 Srl; Gløersen et al. (2013) 292 EUSALP Priority 1 concerns Fostering sustainable growth and promoting innovation in the Alps: from theory to practice, from research centres to enterprises

113 Overall Conclusions Our analysis shows that European labour market integration is a complex and evolutionary process. It was and still is driven by a steady widening the Community s free movement of workers principle through the successive EEC, EC and EU enlargements, but also by a further expansion of its direct application towards some non-eu countries. A free movement of workers is today nearby achieved in full in the 28 EU-Member States as well as in Norway, Iceland, Liechtenstein and Switzerland. This positive overall achievement should not be taken for granted, as recent developments in 2014 show. One example is the Swiss popular vote "Against mass immigration" of February 2014, which led to the application of special rules for Croatian nationals (i.e. separate quotas outside quotas for third country nationals) and will most likely also imply that permanent quotas on residence/work permits are adopted for citizens of all other EEA countries except Liechtenstein. Another example is the lively and sometimes also populist debate in the United Kingdom about how many Bulgarian and Romanian workers should come to the UK and recent government announcements to make the system on welfare for EU migrants tougher than anywhere in Europe 293 or to remove EU jobseekers from the UK if they are not in a job within six months. But European labour market integration is more than creating a basic right for workers from one country to have access to labour markets of other countries. It is also about establishing favourable frame conditions across the EU and within the individual Member States which help to eliminate obstacles that still hinder European labour mobility and to support a full inclusion of mobile workers into the society of their respective host countries; facing the challenges of demographic change that will emerge in the medium- and longterm on national and regional labour markets (i.e. territorial availability of a sufficiently abundant and adequately qualified labour force; potential regional labour force imbalances; generalised scarcity of highly skilled workforce). All these dimensions of the European-wide labour market integration process have considerable territorial implications for cross-border and transnational areas which need to be addressed and tackled by interventions supported under the respective ETC-programmes. Cross-border labour market integration Intense cross-border commuting along many EU-borders is a clear sign for a stronger functional integration of the respective cross-border labour markets. Evidence from EU-wide studies and from our case studies shows that commuter flows in the EU have significantly increased, especially since the early 1990s. However, the total volume remains relatively limited in overall terms. For all EU 27/EEA/EFTA countries, an EU-wide study of 2009 estimated that a total of 293 Likely reforms in the UK could mean that in future EU workers will not get in-work benefits until they have been in the UK for four years, not get social housing until they have been in the UK for four years and not get child benefits and tax credits for children living elsewhere in Europe no matter how long they have paid taxes in the UK. See at:

114 ,000 cross-border workers existed in the years 2006/2007. Of this total, commuters in the Greater Region might alone have accounted for close to 20% if data for 2005 is considered (i.e. figures indicate 135,120 commuters). If compared to commuter flows in the Greater Region which are today the highest observed in the EU28 (i.e. at around 160,600 in 2010), commuting across many other EU borders appears to be rather modest. This is also the case for the border between Italy and Slovenia, where commuting is of a medium-high level in a European perspective (i.e. estimated at around 10,000 commuters). Still, commuting is unexpectedly high at this border given the area s recent history and commuting was also further growing during the crisis years Cross-border workers still face a great variety of mobility obstacles on a daily basis along all internal borders of the EU28. Many of these obstacles originate from systems differences which exist between EU Member States or between them and other neighbouring countries (esp. NO, LI, CH), for example as regards domestic social security and taxation laws or national pension schemes and education systems. However, even through further EU-wide legislation and harmonisation, it cannot be expected that these systems differences will be eliminated in the foreseeable future. It therefore becomes clear that cross-border labour markets will remain fragmented, albeit at different levels of significance along the various EU-borders. Consequently, a promotion of cross-border labour market integration will continue to be an important but difficult task along all EU borders in the period and beyond. It requires a continuing cooperation effort over a longer time period in order to achieve significant and also lasting improvements. Since the start of EU-funded cross-border cooperation in 1990/1991, the up-to-now four generations of cross-border INTERREG- and ETC-programmes ( , , , ) had been very active in promoting a further development and integration of cross-border labour markets. They supported interventions which aimed at eliminating or mitigating persisting obstacles to a cross-border mobility of workers, further developing the capacity of the border-regional workforce to access job opportunities across the border, establishing specific cooperation structures or networks which help to further deepen the level of cross-border labour market integration. During this period and throughout the EU, cross-border interventions varied quite strongly in terms of location (esp. programme areas with significant commuter flows), timing (i.e. relevance in the different programming periods) and also in terms of focus and intensity (i.e. wide range of action or rather limited scope of actions due to an absence of significant development potentials). As regards the latter aspect, however, some interesting developments can be observed in the programming period A first one is that cross-border programmes involving only new Member States allocated in overall terms an equally important share of their funding to labour market interventions than programmes involving only old Member States. Another one is that programmes with the highest absolute ERDF-funding and the highest shares of funding for labour market interventions often covered areas either having a maritime or mountainous and rural dimension, where usually cross-border commuting is rather low. Both developments clearly show that also other cross-border areas are increasingly paying attention to this theme, irrespectively of the volumes of commuting that might exist. This also suggests that even rather

115 115 low commuting flows are considered essential for the development of the cross-border economies. A good example for this growing attention is the Italy-Slovenia case, where crossborder cooperation on labour market development and labour market integration has become more intense over time. Both long-lasting and more recent initiatives have been implemented to support cross-border mobility, also punctually under the INTERREG- and ETC-programmes. A cross-border labour market - where it exists - is an important element for enhancing territorial integration of the entire cooperation area. This results not only from its decisive role for socio-economic development, but also from its role as an arena helping to foster sociocultural exchange. These important functions of the cross-border labour market clearly come to the fore in cooperation areas with already intense or rapidly growing commuter flows. A good example for this is again the Greater Region, where a joint governance framework for crossborder labour market development has progressively emerged. This framework is made up of various strategic cooperation structures, each of which has its own function rationale, and of a larger number of thematic cooperation networks focussing on more specific labour market issues. Today, this framework allows pursuing an extremely well-informed cross-border policy on labour market development which also points to (controversial) issues that are relevant for a wider integration of the cross-border cooperation area. But cross-border labour market integration can also challenge territorial integration, especially if intense commuting leads to unwanted side effects and if commuter flows continue to be strongly unidirectional. New challenges that emerge from intense commuting were observed in the Øresund crossborder area (DK-SE) and especially in our case study area Greater Region. For the Luxembourg cross-border metropolitan area, more particularly, we have shown that the high level of commuting induces a number of other territorial developments (i.e. population concentration in the immediate border areas; a-typical commuter flows; raising property prices) and also unwanted side-effects (esp. increased traffic, congestion, pollution etc.). They affect cross-border integration in many ways and thus require further local/regional or joint interventions to be tackled effectively. Strongly one-sided commuter flows are observed along many EU borders and this also holds true for both of our case study areas Greater Region and Italy-Slovenia. Achieving a more balanced commuting pattern is obviously not easy and requires a multitude of actions: an important one is of course the progressive elimination of economic disparities between both sides of a border, which at the same time are an important driver of commuting and a prerequisite for more territorial integration. However, joint efforts towards balancing commuter flows should be undertaken, mainly because of the foreseeable labour market effects of demographic change. Regional competition about workforce is likely to increase in the future (esp. for skilled and highly qualified workforce) and continuing massive workforce outflows from only some areas would then substantially hinder their socio-economic development, thus leading to further territorial imbalances within the entire cooperation area. From the above-said, the following overall conclusions can be drawn on thematic perspectives for cross-border cooperation in the programming period : (1) Cross-border cooperation should continue supporting pragmatic and area-specific solutions helping to alleviate negative effects on cross-border labour mobility which result from the observed systems differences between EU Member States (e.g.

116 116 provision of information & advice to cross-border workers). As EURES cross-border partnerships (EURES-T network) already exist since a long time at many EU borders, the new ETC-programmes should focus on complementary initiatives which further broaden the already existing assistance and advice offer. (2) Cross-border cooperation should also initiate more strategic initiatives which aim at definitively eliminating systems differences that are the causes of many mobility obstacles, for example through national-level policy changes and more effective crosscountry coordination. This indeed demanding approach requires strong political will, but our case study on the Greater Region shows that this is already done in practice (i.e. the Task Force Commuters consisting mainly of institutional policy actors, which develops legal and political solutions for persisting obstacles that commuters and businesses still face on the cross-border labour market). (3) The development of cross-border labour markets should also be promoted through interventions supporting a provision of cross-border vocational training and qualification offers and of cross-border educational offers at all levels. The latter should in particular focus on enhancing language skills and improving inter-cultural competencies. Both aspects are important preconditions for accessing and successfully integrating the cross-border labour market, especially in cooperation areas with linguistic borders. (4) Cross-border areas with an already high level of cross-border commuting should at a certain point of time consider establishing a certain governance framework which helps to further develop and integrate the cross-border labour market. Our case study on the Greater Region shows that many options do exist for this. Whatever constellation is chosen, it is important that this framework provides effective assistance to joint policy making (e.g. through regular data gathering, analyses, reports, policy-briefings etc.). But also cross-border areas with still rather low commuting flows that wish to further develop their cross-border labour markets should consider this option. However, actions should be taken in a step-by-step approach and be closely oriented at the most important needs. Transnational labour market integration Cross-country labour migration flows in the EU are low in overall terms and they also tend to be lower than what is usually captured by intra-eu mobility flows. Data of 2010 for only the EU15 Member States suggest that just 1% of the EU s active population had been mobile and that within this volume cross-border commuting accounted for 0.35 %. These rather modest intra-eu mobility flows are also confirmed by evidence from our Baltic Sea Region (BSR) case study, where in 2006 the working-age population having changed their region of residence accounted for only 1% of the BSR's total working-age population compared to 1.26% in the EU27. General drivers of cross-country labour migration are often different kinds of push & pull factors, but there are also many obstacles to labour mobility that can be found on both the institutional and the individual levels. Despite EU-wide legislation that aims to create conditions which stimulate greater intra-eu labour mobility, many EU Member States still apply domestic policies that are only halfway favourable or even slightly unfavourable for labour mobility. If this

117 117 aspect is looked at through a transnational cooperation perspective, then it appears that there is a clear need for further improvements in six of the thirteen programme areas existing in the period (i.e. North West Europe, Atlantic Area, Alpine Space, Central Europe, South East Europe, Mediterranean). Transnational cooperation is also increasingly challenged by the implications that demographic change will have for regional labour markets and the transnational labour market as a whole. Prospective analyses show that transnational cooperation areas are characterised by different patterns of long-term regional risks and opportunities, both in terms of general labour supply and of sufficiently qualified human capital. The programme areas which appear to be most at risk under both perspectives are Central Europe, South East Europe and Mediterranean. But also our case study area Alpine Space is for both cases not in a clearly favourable position. This obviously creates shared needs and development potentials which should be addressed more intensively through in transnational cooperation. Cooperation which promotes a further integration of the transnational labour market has clear potentials for furthering the territorial integration of transnational cooperation areas. High levels of cross-country labour mobility can allow cooperation areas to alleviate adverse labour market effects of short-term economic asymmetries (i.e. mobility acting as a shock absorber ) and support the medium-term development of a competitive transnational economy (i.e. brain gain in flows-receiving countries or regions). At the same time, however, it should not be overlooked that continuing and strongly one-sided labour migration flows can also lead to unwanted developments in the sending countries or regions of a transnational area (e.g. brain drain tax-drain, labour shortage, brain-waste), which then are likely to create new territorial disparities within the cooperation area. The relevance of all these issues has been clearly shown in our case study on the Baltic Sea Region. EU-funded transnational cooperation started in 1997, but our analysis shows that territorial implications of the European labour market integration process were addressed rather seldom under the first two generations of INTERREG-programmes ( ; ). This general lack of attention during the early cooperation phase was also observed in our two case study areas Alpine Space and Baltic Sea Region. Under the following generation of ETC-programmes ( ), however, one can notice that labour market related issues were increasingly given attention by transnational cooperation. Ten out of the thirteen transnational programmes allocated variable shares of their ERDFsupport to labour market relevant interventions. The support amounted to 67.6 million or 4% of the total committed ERDF funding in The three programmes with the highest absolute ERDF-funding for labour market interventions were South East Europe, Central Europe and also our case study area Baltic Sea Region. The Alpine Space programme, instead, belongs to the smaller group of programmes which did not allocate any funding to labour market relevant interventions. This growing attention in several cooperation areas might have been a result of the new transnational situation that emerged with the lifting of the last temporary labour market access restrictions for workers from the new EU Member States. But also the now much broader awareness about the medium and long-term impacts of demographic change on national and regional labour markets has certainly been an important factor which stimulated this growing interest. A final influencing factor is in some cases also the thematic orientation of existing EU

118 118 Macro-regional Strategies, as especially the EUSBSR and the EUSDR consider issues that are relevant for transnational labour market development extensively. The Baltic Sea Region case illustrates well this clear shift in attention given to transnational labour market development and integration. The ETC-programme allocated 11 million or around 6% of its ERDF support to projects involving labour market relevant interventions. Also the intergovernmental VASAB-process paid more attention to transnational labour market development in the newly elaborated VASAB Long Term Perspective. Successful projects and themes of transnational relevance also found their way into the EUSBSR, which addresses a broad variety of aspects relating to transnational labour market development in a medium-term perspective. The EUSBSR action plan intends to establish a sort of institutional backbone for this thematic cooperation field through a potential flagship project that builds on the results of a previously supported ETC-project (Baltic Sea Labour Forum). This allows concluding that rather soon a durable transnational problem-solving capacity will be in place in the BSR by which the very complex needs and challenges in this very particular field of action can be addressed and tackled jointly. If the Alpine Space area is compared to the BSR, then a completely opposite picture appears. Although issues relating to the transnational labour market were regularly mentioned by the three generation of INTERREG programmes, they remained at a low level of priority in the concrete actions supported. Also in the context of the emerging EUSALP, it seems that transnational labour market integration might only be addressed in parts. However, important challenges do exist on the transnational labour market: a first one is the impact of demographic change and a second one are the consequences of the recent Swiss popular vote "Against mass immigration", which will lead to a clear policy-shift in one of the most popular destinations for cross-border workers and migrant workers in the Alpine Space area. From the above-said, the following overall conclusions can be drawn on thematic perspectives for cross- transnational cooperation in the programming period : (1) Transnational cooperation should start actions which improve national and regionallevel policies that are of relevance for cross-country labour migration, with a view to create a more mobility-friendly cooperation area in overall terms. Joint actions could for example be started under the perspective of social innovation, e.g. through jointly identifying and transferring (applying) successful models or solutions. (2) Transnational cooperation should more intensively address the complex labour market implications of demographic change, although several programmes have already supported actions on this topic during the period Starting points for further joint actions should be issues which have a likely moderating potential on the demography factor (e.g. by stimulating female employment & mobilising unused highly skilled female workforce potential; by stimulating a higher employment of elderly persons or of other unemployed; by training and education or life-long learning etc.), as the latter can hardly be influenced directly. (3) Transnational cooperation should - where the conditions are right also develop joint actions which help to achieve a stronger integration of the transnational labour market (e.g. by a better coordination of national/regional policies; by establishing specific cooperation structures dealing with issues of the transnational labour market etc.).

119 119 These much more far-reaching actions obviously require substantial joint political will among the concerned countries and regions and they should also be framed by a more wide-ranging cooperation outside the transnational ETC-programmes (e.g. through actions promoted by a Macro-Regional Strategy). Definitions, data availability and persisting data gaps Our study shows that there is a set of basic definitions which allows distinguishing various types of international labour mobility within the EU (see: Annex 1). Although these definitions are not fully homogeneous and also not easy to operationalise for data gathering purposes, they can be used as a starting point for analysing labour mobility flows that are particularly relevant for cross-border and transnational cooperation areas: these are crossborder commuting flows, with cross-border workers living in one country and working in another country, and cross-country labour migration flows, with migrant workers changing their place of residence to the place of work. Of importance is that both types (and related data gathering processes) are clearly separated, because otherwise flow data is mixed and could easily lead to false conclusion. This need for a clear differentiation is also demanded under several studies on labour mobility, wherefore a recent EU-level attempt to merge both mobility types under the common heading of crossborder commuting cannot be considered a very positive step. 294 As regards the general availability of (EU-wide) uniform data on both of these specific labour mobility flows, we can conclude from our extensive review of studies realised on these issues that sill significant gaps and problems do exist. This obviously hampers many crossborder and transnational cooperation areas to obtain a good perception of their respective labour markets. (1) Availability of data for cross-border commuting flows: Observations made in past EU-wide studies 295 show that they often had problems in producing solid quantitative information, because identifying cross-border workers on ground of an identical definition across all regions along the EU borders was not possible. Also a production of aggregated data on cross-border commuting flows for the EU or even for a given co-operation area often encountered serious problems. One reasons for this was that regular data on commuting had - with a few exceptions - rarely been available, either because monitoring was missing or because it had been conducted with too low frequency. Data existed most often only for larger border strips between two countries or a single country (i.e. often not corresponding to / broken down on NUTS 3 or LAU 2 or 1 levels), but in some border regions also estimates had to be used in order to compensate for obsolete or unavailable data and to assure an overall comparability of information. This general situation prevailing at many EU-borders is confirmed by our findings from the case study Italy-Slovenia. Here, documentation and in-depth analyses as well as data on issues relating to cross-border commuting and cross-border labour market development are available. But they are only produced sporadically by some organisations in the cross-border area dealing 294 See for this approach: European Commission, DG Employment, Social Affairs and Equal Opportunities, 2011, pp See in particular the observation in: European Parliament (1997); European Commission, DG Employment and Social Affairs (2009)

120 120 with the cross-border labour market (e.g. EURES cross-border partnership Euradria ) or in the framework of EU-studies and evaluation exercises. A clearly opposite situation is observed in our case study area Greater Region, which can be considered a Europe-wide best practice example in this respect. Abundant documentation and in-depth analyses as well as a variety of data sets are regularly available on a broad range of issues relating to the cross-border labour market. This is due to intense and regular data gathering and data analyses by the concerned countries and regions themselves, but also a result of two important joint initiatives: (1) the ongoing cooperation among the national and regional statistical offices of the Greater Region and (2) the establishment of the Greater Region s labour market observatory. Especially the latter elaborates very detailed periodic reports to support political decision takers at regional or local levels and also the wider policy-making process at the cross-border level. This initiative is a good example which can also be replicated along other EU-borders. (2) Availability of data for cross-country labour migration: This data is particularly relevant for transnational labour market integration, but flows are difficult to monitor given the free mobility within most of the EU. Population registers cannot be used, because in many EU countries residence permits are not required by other EU nationals. The Alpine Space area is certainly a good example where data availability problems and a lack of in-depth analyses on cross-country labour migration flows clearly make it difficult for cooperation to deal with issues relating to transnational labour market development. Furthermore, awareness about the need to differentiate between cross-country labour migration and cross-border commuting is barely noticeable. An improvement of data availability and data quality will obviously require stronger cooperation between the Alpine Spacecountries e.g. through setting up dedicated networks. A clearly different but still not yet optimal situation is observed in the Baltic Sea Region (BSR), where rich documentation and in-depth analyses as well as data on issues relating to transnational labour market development are available. The level of detail is generally higher for the Nordic BSR countries. This is due to the early Nordic labour market integration which made this aspect a key policy area of the wider Nordic cooperation process that is also regularly monitored. What is still missing is a coherent BSR-wide view that also includes the German Länder, Poland, the three Baltic States and if possible - the two neighbouring partner countries Russia and Belarus. Also more adequate data on BSR-wide labour migration flows is needed, 296 but it can be observed that awareness about the need to differentiate between cross-country labour migration and cross-border commuting already exists. Improving data quality indeed requires stronger cooperation between the countries and regions of the BSR, but it can be observed that first steps are already made in this direction (i.e. Estonia and Finland have recently signed an agreement on the exchange of population register data; launching of a potential EUSBSR flagship project aiming to create BSR Mobility Database ). 296 The situation is currently often examined by using general migration flow data (i.e. not specified by age groups in order to detect the share of the working age migrant population).

121 ANNEXES 121

122 122 ANNEX 1: International and EU-level definitions applied to different types of mobile workforce Term Origin & Source Specification Migrant Migrant Worker Migrant Worker Worker Migrant Worker Cross-border workers (also: crossborder commuters or frontier workers) Cross-border workers (also: crossborder commuters or frontier workers) Non-resident workers United Nations: Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families" United Nations: Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families" International Labour Organization: Convention concerning Migrations in Abusive Conditions and the Promotion of Equality of Opportunity and Treatment of Migrant Workers European Union: Free movement of workers principle and case law of the European Union s Court of Justice European Union: Articles 1 to 6 of Regulation (EEC) no. 1612/68 guaranteeing the free movement of EEA nationals in the single labour market. European Union: Regulation (EC) no 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (i.e. the Basic Regulation). Regulation (EC) no 987/2009, entering into force in the EU Member States since 1 May 2010 (i.e. the Implementing Regulation). The current regulations abrogated Regulations (EEC) no 1408/71 and no 574/72. (*) Member States Rights of residence. Bilateral double taxation conventions: They are often concluded between neighbouring Member States with many persons crossing borders to work. Double taxation conventions often contain special rules for cross-border workers, which are a result of negotiations between the States. Rules may vary from one double taxation convention to another. European Union: Article 45 TFEU (ex Article 39 TEC Free movement of workers ). Article 7 of Regulation (EEC) No 1612/68 on freedom of movement for workers within the Community. Case law of the Court of Justice: judgment of 14 February 1995 in the Schumacker case (C-279/93) and later judgments such The term migrant is usually understood to refer to any person who lives temporarily or permanently in a country where he or she was not born, and has acquired some significant social ties to this country. A person who is to be engaged, is engaged or has been engaged in a remunerated activity in a State of which he or she is not a national. A person who migrates or who has migrated from one country to another with a view to bring employed otherwise than on his own account and includes any person regularly admitted as a migrant worker. Any person who undertakes genuine and effective work for which he is paid under the direction of someone else, but it does not cover third country migrant workers An EEA national is entitled to work without a work permit in all other EEA Member States. The worker s family members can also work in the other Member State under the same conditions as the worker himself, this is regardless of their nationality (so this also applies to third country nationals). Workers not being EEA nationals (third country nationals) do not enjoy this freedom of movement. Article 1, paragraph f of Regulation (EC) no. 883/2004: Frontier worker means any person pursuing an activity as an employed or self-employed person in a Member State and who resides in another Member State to which he returns as a rule daily or at least once a week; A cross-border worker is thus person who works in one Member State (State of employment) and lives in another (State of residence). It is essential that he retains his normal place of residence outside the State of employment. If the cross-border employee moves to the State of employment, he becomes a migrant worker. A resident who moves to a neighbouring State but continues to work in his original State of employment (migrant resident), is also a cross-border or a frontier worker. The term normal place of residence does not exclude the possibility that the cross-border employee, for practical reasons, also has temporary accommodation in the State of employment. The definition of cross-border worker provided in the EC Regulation on the coordination of social security systems (see above) is broader than that contained in domestic rights of residence and in particular in double taxation conventions, which often leads to confusion and to wrong conclusions. In the case of bilateral double taxation conventions, differences may apply both to the definition of cross-border workers as such, and the division of taxing rights between the Member States concerned. Normally any special rules for cross-border workers are limited to persons who both live and work close to the border and are employed. They may even be limited to persons employed in the private sector (as opposed to the public sector). From the point of view of the State of employment, a cross-border worker falls within the broader category of non-resident workers - non-resident meaning that they have their tax residence somewhere else. Article 7 ensures that migrant and cross-border workers are entitled to the same social and tax advantages as national workers. Social and tax advantages include in particular: study finance for children, redundancy payments or dismissal, non-contributory continuation of company pensions in the event of unemployment,

123 123 Posted workers Multinational worker as Gschwind C-391/97, Zurstrassen C- 87/99, Gerritse C-234/01, Wallentin C- 169/03 and Meindl C-329/05. European Union: Directive 96/71/EC, establishing a hard core of clearly defined terms and conditions of work and employment for the minimum protection of workers, including minimum rates of pay, which must be complied with by the service provider in the host Member State. Member States: Bilateral double taxation conventions European Union: Regulation (EEC) No 1612/68 and Regulation (EC) no 883/2004 guarantee the right of free movement for this group of employees and ensure that they do not lose their accumulated social rights. tax credits, maternity allowances (birth grant), access to collective private health insurance, tax rebates, etc. Court of Justice: The Court of Justice has constantly held that residents and non-residents are not generally in the same situation. Differences in taxation between residents and non-residents may therefore not necessarily constitute discrimination. The Gschwind case suggests that non-residents obtaining 90% or more of their total income in the state of employment should normally be entitled to the same tax treatment as residents. A posted worker is an employee who normally works in the territory of one Member State (the originating State), and who is sent by his employer - in the framework of the provision of services - to work in another Member State. Posting is thus not covered by the regulations on the free movement of persons. During this period the posted employee works exclusively in this Member State. In the course of his normal working activities the employee in question is subject to the employment laws, social security and income tax of a given Member State. However, posting to another Member State, even if this is only temporary, can interrupt this normal and familiar framework. An employee who conducts his professional activities in more than one Member States at any given time. Neither the country where the employer is based nor the country of residence of the employee necessarily have to be one of these countries of employment (e.g. a resident of Germany who, working for a French international hotel chain, conducts quality inspections in the French and German subsidiaries of the group, or carries out quality inspections in Austria and Liechtenstein). Guidelines concerning income taxes can be found in bilateral double taxation conventions which the country of residence of the employee has concluded with each of his countries of employment. Unlike social security, it is possible for a person to be taxed in several states, without being doubly taxed (salary splitting). (*) Regulation (EEC) no. 1408/71 and Regulation (EEC) no. 574/72 shall remain in force and their legal effects shall remain valid (Article 96, Regulation 987/2009) for the purpose of (1) Council Regulation (EEC) no. 1661/85 of 13 June 1985 laying down the technical adaptations to the Community rules on social security for migrant workers with regard to Greenland, (2) the Agreement on the European Economic Area concerning the EEA States Iceland, Liechtenstein and Norway and (3) the agreement between the European Community and its Member States of the one part, and the Swiss Confederation of the other part, on the free movement of persons and other agreements containing a reference to Regulation (EEC no. 574/72), for as long as said agreements have not been amended in accordance with the implementing regulation. Sources: ETUC (2011);

124 124 Citizen of employed in DE (*) FR (*) LU (*) ANNEX 2: Long-term development of the right of EEC & EC nationals / EU citizens to work in other EU Member States EEC 6 BE (*) NL (*) IT (*) UK (**) EEC 9 IE (**) DK (**) EC 12 EU 15 EL ES PT AT SE (**) FI (**) EU 25 EU 27 EU 28 LT LV EE HU PL CZ SK SI CY MT RO BG HR DE (*) FR (*) LU (*) BE (*) NL (*) IT (*) UK (**) IE (**) DK (**) EL ES PT AT SE (**) FI (**) LT LV EE HU PL CZ SK SI CY MT RO BG HR (*) Date indicates EEC foundation, but free mobility of workers within the EEC 6 was applied on ground of two transitional regimes (Regulations and Directives of 16 August 1961 and of 25 March 1964) and definitively in 1968 on ground of Council Regulation 1612/68 of 15 October (**) For Ireland and the United Kingdom, the indicated date of applicability is the one as member states of the EEC, but a similar right previously existed on a bilateral basis (no date found). For Denmark, Sweden and Finland the first date refers to a similar right which existed on ground of the Agreement concerning a common Nordic labour market of 22 May 1954 (later replaced by an agreement signed on 6 March 1982). & & & & & & = general open doors policy during the respective integration phases (i.e. rights on the free movement of workers were immediately applied after the EEC foundation or a subsequent EEC/EC/EU accession). & & = temporary restrictions on the free movement of workers (2+3+2 transitional period) were (or still are) applied during the respective integration phases until the indicated year when those were (will be) lifted. Updated version of an own elaboration for the ESPON 2013 project GEOSPECS (see: ESPON 2012a; Stumm, 2011), realised on ground of information as indicated on the web-page:

125 125 EU citizen of DK (*) SE (*) FI (*) ANNEX 3: Labour market integration within the EEA and between EU Member States and Switzerland Development of the right of EU28 nationals to work in EEA countries and in Switzerland EU 15 EU 25 EU 27 EU 28 DE FR LU BE NL IT UK IE EL ES PT AT CY MT LT LV EE HU PL CZ SK SI RO BG HR employed in NO (EEA) (*) IS (EEA) (*) LI (EEA) (**) CH (***) EU country of employment TBD TBD TBD DK (*) SE (*) FI (*) Development of the right of nationals from EEA countries and Switzerland to work in the EU28 EU 15 EU 25 EU 27 EU 28 DE FR LU BE NL IT UK IE EL ES PT AT CY MT LT LV EE HU PL CZ SK SI RO BG HR for citizen from NO (EEA) (*) IS (EEA) (*) TBD LI TBD (EEA) CH TBD (*) Some dates for Denmark, Sweden, Finland, Norway and Iceland refer to a similar right which previously existed on ground of the Agreement concerning a common Nordic labour market (of 22 May 1954, replaced by an agreement signed on 6 March 1982). (**) Liechtenstein imposes a permanent quota for all EU citizens and for citizen of other EEA countries (NO, IS). (***) The Swiss popular initiative "Against mass immigration" of 2014 is scheduled to impose permanent quotas on residence/work permits for citizens of all EEA countries (EU 28, NO, IS, except LI), starting from 2017 at the latest. = prior Nordic labour market integration process = general open doors policy for the EEA (1990s) and for EU15/CH (2002) & & = general open doors policy for the EEA and for CH & = temporary restrictions on the free movement of workers were (or still are) applied after the 2004 & 2007 enlargements until the indicated year when those were (will be) lifted. = to be determined: restricted movement of workers; transitional period or no date yet decided. = to be determined: Croatia has yet to sign a protocol with Switzerland; 2+3+2(+3) transitional period Updated version of an own elaboration for the ESPON 2013 project GEOSPECS (see: ESPON 2012a; Stumm, 2011), realised on ground of information as indicated on the web-page:

126 126 ANNEX 4: Cross-border regional levels of commuting Source: European Commission, DG Employment and Social Affairs (2009): Scientific Report on the Mobility of Crossborder Workers within the EU-27/EEA/EFTA Countries (Final Report), Munic/Sopron, p.25

127 127 Type of border effect Effects associated to political borders ANNEX 5: Extensive version of the general typology of border effects, elaborated under the ESPON 2013 project GEOSPECS General reasons explaining border effects Different status of the political border & different degrees of openness for economic exchanges & inter-personal relations. Concrete examples for associated closure effects (-) and opening effects (+) + Smooth & free circulation of persons, goods and services (no controls), due to the status as internal EU-border/Schengen border of full members or associated members/eea-border and the absence of restrictions to labour market access. + Smooth & free circulation of persons, goods and services (with some controls), due to the status as internal EU-border/non-Schengen border/eea-border and the absence of restrictions to labour market access.. - Strongly limited circulation of persons, goods and services due to the status as an external EU-border (i.e. import restrictions, sanitary prescriptions, restrictions to labour market access, visa requirements & visa cost, extensive customs checks & control procedures, long waiting times due to different checkpoint opening hours, staff shortage or bureaucracy). - Exchange rate losses due to different currencies used on either side (e.g. between EURO-zone members & non-euro zone countries). Different legal systems, different governance structures (administrative units & powers), and different policies meeting at a political border. + Establishment of activities which provide specialised economic services drawing upon the cross-country differences in customs or tax legislation. - A lack of co-ordination/co-operation and joint planning in the field of public policies due to different administrative structures and powers. - Low quality of public services or social facilities (lacking investment) due to insufficient catchment areas in border / cross-border regions and/or due to legal and financial barriers. - Varying quality in terms of tackling major emergencies, accidents with a cross-border impact due to different legislations and organisation of rescue & disaster prevention services. - Different organisation and functioning of public transport systems and lacking cross-border co-ordination and operation. - Varying levels of crime prevention and public security on either side of the border, due to different legislation & organisation of police forces. - Due to a use of different currencies on either side of a common border, risk of exchange-rate losses and existence of other transaction cost. - Curtailed civil rights of foreigners living as permanent residents on the other side of a border (e.g. voting rights in the home country) or of residents in a border region with respect to aspects on the other side affecting their own quality of life (e.g. installation of waste disposal / incineration facilities, nuclear power plants). - Obstacles for border-crossing business activities (esp. for SMEs & small crafts undertakings) due to different legislations on tax, social welfare and education/vocational training or different technical standards & other formal requirements (e.g. special permits, mandatory membership in intermediate professional organisations etc). - Obstacles for independent professions (e.g. doctors, lawyers, architects etc) due to different legislations or an insufficient de-jure or de-facto recognition of degrees, diploma or other qualifications. - Obstacles for cross-border mobility & labour market commuting (i.e. existence of labour market restrictions, different taxation & social systems, different other administrative/regulatory requirements governing e.g. the access to vocational training & further training, lacking information on job opportunities or on required levels of formations/graduations). - Different environmental legislations/standards or practices, leading to unwanted developments (e.g. pollution of air, soil and water, noisedisturbances) which also negatively affect the quality of life on one or both sides of a border. - Limited admission into a hospital or consultation of a doctor on the other side of the border, due to different health care systems and insurance regulations. - Higher cost for cross-border phone calls or cross-border mail delivery services. Effects associated maritime boundaries to Different levels of certainty / clarity about the maritime boundaries existing between states. + Non-existence of disputes on maritime boundaries, favouring a coherent off-shore and on-shore regional development which is also further enhanced by a less problematic implementation of supranational regimes or policies (e.g. EU-fisheries policy, joint preservation of coasts & the marine environment). - Existence of disputes on maritime boundaries, leading to multiple off-shore and on-shore problems (e.g. hampered activity of local fishermen,

128 128 hampered functioning of ports and of maritime police control, incoherent management& preservation of the sea / the marine ecosystem, hampered development of tourism, distortions in the well-being of local inhabitants). Effects associated natural obstacles to Existence or non-existence of a natural obstacle & varying significance of the barrier effect represented by an existing obstacle (e.g. high mountain, large river & lake, sea or large maritime separation). + High permeability of the border, due to the non-existence of a physical obstacle and/or a high or even very high density of border crossing possibilities (i.e. by road, rail, ship etc) and/or well-developed cross-border transport & communication infrastructures (including public transport services). + Intense economic and inter-personal exchanges or cross-border labour market commuting, due to short distances & travel times. - Reduced permeability of the border, due to the existence of a physical obstacle and/or a low or even very low density of border crossing possibilities (i.e. by road, rail, ship etc) and/or underdeveloped cross-border transport & communication infrastructures (including public transport services). - Limited economic and inter-personal exchanges or cross-border labour market commuting, due to long distances & long travel times. Effects associated to economic discontinuities Effects associated to socio-cultural dividing lines Significantly different levels of economic performance (i.e. observed with respect to the overall situation or a specific issue) between areas located along a common border, acting at the same time as potential push factors and pull factors. Different interpretation of the common historical legacy & different levels of inter-personal relations existing between both sides of a border Variations with respect to the general ethno-cultural & linguistic settings on either side of a border + Intense cross-border trade / provision of services, due to the non-availability or a different quality of products & services on one side of a border. + Legal cross-border labour market commuting, due to an unfavourable situation in the area of residence and more attractive conditions one on the other side of a border (i.e. stronger economic dynamism & more / better job opportunities, better working conditions, higher wages etc), causing an outflow of workforce. + Legal permanent migration of individuals from one side to the other side of a border, due to lower property prices or rent and/or a better living standard (e.g. wages), often also coupled to the emergence of a flow of in-commuting nationals (i.e. persons from one state who are living on the other side of the border but are still working in their former home country). - Dislocation of companies / specific production processes from one side to the other side of a border, due better infrastructure and lower wages / taxes or to other monetary advantages existing on the other side of a border (e.g. better credit & loan conditions; higher public subsidies for companies). - Illegal immigration & employment or risk of social conflicts, due to a very unfavourable economic situation / poor living standard on one side of a border and restrictions existing for cross-border mobility (external borders). - Smuggling, due to cross-border differences in the price or taxation of goods and/or the non-availability of certain goods. + Due to positively shared historic experiences, existence of positive instinctive attitudes (e.g. mutual trust, a sense of belonging together & a common identity). - Due to negative historic experiences and/or the non-existence of common historic ties, existence of negative instinctive attitudes (e.g. traditional prejudices, mistrust / misinformation, a lack of mutual knowledge/understanding or ignorance). + Existence of similar cultural/moral concepts and behavioural patterns existing on both sides of the border, leading to a better comprehension of the neighbours way of thinking and behaving and a high level of mutual trust. + Due to the fact that the same language is spoken on both sides of the border, cross-border inter-personal and official communication as well as job-access is easier. - Existence of negative instinctive attitudes (e.g. mental barriers/misunderstandings, mistrust, lack of genuine motivation), due to different cultural/moral concepts and behavioural patterns. - Existence of different official languages and a lack of language proficiency (multi-linguism) on both sides of the border which lead to a communicative barrier among individuals, to difficulties in accessing jobs and to more complicated customs / administrative procedures.

129 ANNEX 6: Persisting mobility obstacles along the borders between the Nordic Countries (DK, SE, FI, NO, IS) The ten most serious border obstacles, based on the number of people they affect and how serious the consequences are for the individual, are the following: 1. People who have worked for several years in one country and take early retirement from a different country receive a lower pension if they do not meet the demands for early retirement in both countries. Their pay-out can be considerably reduced as a result. 2. People on partial sick leave in one country cannot take up part-time work in a different country without losing their sickness benefit. Accepting any work in a different country involves changing the social insurance host country, which again has consequences for the sick leave. 3. People living in border areas are not allowed to approach the labour market on the other side of the border when they seek labour market training. 4. Someone hired in one country risks not receiving any unemployment benefit if they fail to register with that country's unemployment benefit fund from day one. In Sweden you need a whole year's uninterrupted membership in order to claim unemployment benefit. The Freedom of Movement Forum says it would be more reasonable to demand at least eight weeks' membership. 5. People living in Sweden and working for a staffing agency/temp agency do not receive money from their unemployment benefit fund in between jobs. 6. Border commuters who become unemployed during a period of sickness leave risk losing all of their benefit when declared partially fit for work, because the two countries can't agree on who is responsible for paying the benefit. 7. Swedes who live in Sweden and work in Norway and receive Norwegian rehabilitation benefits as a result of being injured or otherwise ill, will run into trouble when trying to document this fact in Sweden. This is because Norwegian authorities refuse to fill in the necessary Swedish unemployment benefit form (the E301). This will have consequences for the size of a person's benefit if he or she become unemployed. 8. A person living in Sweden and working in Denmark who get injured or for other reasons remains incapable of working for a long period of time must, after medical treatment, travel daily to Denmark to attend a rehabilitation programme. It would be easier if this could happen in the country of residence. 9. Men who work in Norway with a wife/partner who neither lives nor works in Norway has no right to paternity leave around births or parental leave to look after children. The right is derived from the rights of the mother. 10. People on parental leave cannot break it off to take up work in a different Nordic country. The consequence would be a reduction of the parental benefit to the basic level when that work ends, i.e. the right to parental benefit in the former country of work ends and is replaced by basic level parental benefit in the country of residence. Source:

130 130 Annex 7: Summary overview on interventions of INTERREG IIA programme ( ) with relevance for cross-border labour market integration Programmes covering EU-borders with a low degree of isolation The 5 Interreg IIA programmes along the borders between the Netherlands, Germany and Belgium (Ems-Dollard, EUREGIO, Euregio Rhine Waal, Euregio, Rhine-Meuse-Nord, Euregio Meuse-Rhine), joint activities have centred around an optimisation of cross-border mobility and better access to labour markets. They supported the installation of targeted networks such as job centres focusing on SME needs or advisory units in administrations providing information on professional specificities or profiles of labour markets across the border. The programmes also supported cross-border training and qualification measures to increase the potential of employability in areas and to promote the crossborder recruitment of unemployed into available jobs (exchange programmes, added value qualifications, bi-lingual competence). In total about unemployed persons have visited various job-fairs and about persons participated in border-crossing vocational training courses/ jointly established qualification and/ or bi-lingual curricula. The 3 very small Interreg IIA programmes covering the Danish-German border have generally adopted the approach that joint education, training and also working experiences contribute most successfully to cross-border integration on a long-term basis. Consequently, the supported education and training provisions as a main field of action and could achieve with comapratively small amounts of support quite respectable outputs and results Under the programme Sønderjylland/Schleswig, for example, education and training activities considered all levels of education (school classes, university colleges, vocational training schools, specific qualification courses) and 330 participants attended one of the offered courses and classes. Good experiences were also made with qualification courses for specific topics (nurses training, business employees, language courses, etc.). Another example is the programme Fyns Amt / KERN which supported 5 education and qualification projects with a total of 278 participants. One of these projects was a joint project of all 3 Interreg programmes along the Danish- German border. A project supporting unemployed women to start their own business assisted 117 startups, but the further fortune of these start-ups is not known. This project had applied an innovative approach, as a bus, converted into a mobile training centre, brought the training facility to the clients. This procedure proved to be successful and its application was also considered by other institutions afterwards. Programmes covering EU-borders with a medium or high degree of isolation The Interreg IIA programme Spain-France established a broad co-operation in the field of education and training. More than 137 projects covering training / education, social and cross-cultural activities were realised. Projects were conducted to re-integrate unemployed into the labour market, i.e. by offering language courses and commercial training. More than people benefited from these courses and with a participation of more than 450 SMEs. Under the Islands programme (FI-SE), 588 persons participated in education / training measures and 147 language courses with participants were organised. In addition, the programme has supported 5 finalized education modules based upon distance learning. The INTERREG IIA programme Barents (FI-SE-NO-RU) introduced human resources development as an important priority of the programme, with a strong emphasis on improving general and specialist know-how, language, culture and mass media training. Areas of particular focus included administration, services and training systems, language, vocational and university training and exchanges of experts, teachers and students, especially with Russia. Programmes covering former external EU-borders The Interreg IIA programme Saxony (DE-PL-CZ) has supported a number of cross-border oriented training and qualification courses. The projects mostly focused on an improvement of language skills and of specific aspects related to cross-border co-operation (like e.g. communication and information

131 131 management, accounting, etc.). The courses could however not be organised in a complete cross-border way, as participants from the Czech and Polish side were not allowed to receive support from the Interreg programme. Projects covered sectors such as tourism (restaurants and hotels), agriculture and broadcasting. A few more advanced projects also dealt with the development of joint job profiles and joint professional training (e.g. cook, certificate valid both in Germany and the Czech Republic). The INTERREG IIA programme Brandenburg (DE-PL) covered an external EU-border which was becoming more open due to increasing cross-border trade and labour mobility. However, the lack of cross-border networking between educational and training institutions threatened to undermine further cooperation. The programme placed a strong emphasis on human resource measures, particularly training and job-creation initiatives. Priority areas include training and job creation (e.g. new jobs and safeguarding existing jobs), and education and cultural initiatives (e.g. joint educational facilities, language training). In the cross-border zone covered by the INTERREG IIA programme Austria-Hungary both sides of the previous external EU-border were relatively well equipped with training and educational facilities, but the joint potential of these institutions had not been fully released. Labour market issues have consequently been identified as an important sector within the border region and first cross-border cooperation initiatives were launched. Two measures in the human resources priority helped to initiate a better exchange of experience between schools and training institutes concerning the curricular, teaching and training methods and approaches as well as to foster networks across the border. An example for this was the project Cross-Border Cooperation in Labour Market Policy, which involved a transfer of know-how between Austrian employment centres and their counterparts in Western Hungary in relation to EU strategies, methods and instruments in the field of labour market policy. This project was linked to a PHARE-CBC funded management training course aimed at integrating unemployed people into the labour market. Sources: Ex-post evaluation of the INTERREG II Community Initiative (LRDP, 2003, pp.69-71); LACE-GUIDE Practical Guide to Cross-border Co-operation (AEBR/European Commission, 2000, pp ) ANNEX 8: Currently existing EURES cross-border partnerships 1.EuresChannel (BE-FR-UK) 2.Scheldemond (BE-NL) 3.EURES-TriRegio (CZ-DE-PL) 4.EURES Meuse-Rhine (BE-DE-NL) 5.P.E.D. (BE-FR-LUX) 6.Saar-Lor-Lux-Rheinland/Pfalz (DE-FR- LUX) 7.Bayern - Tschechien (DE-CZ) 8.EUREGIO Rhein-Waal (DE-NL) 9.Danubius (SK-HU) 10.Pannonia (HU-AT) 11.Northern Ireland/Ireland (IE-UK) 12.TransTirolia (IT-AT-CH) 13.Info site for commuters in the Øresund Region (Copenhagen-Malmö) 14.Galicia/Região Norte (ES-PT) 15.Oberrhein (FR-DE-CH) 16.Tornedalen (SV-SF) 17.Bodensee (DE-AT-CH-FL) 18.Euradria (IT-SI) 19.BESKYDY (CZ-PL-SK) Source:

132 132 ANNEX 9: Labour-market relevant intervention fields in the programming period Increasing the adaptability of workers and firms, enterprises and entrepreneurs: 62 - Development of life-long learning systems and strategies in firms; training and services for employees to step up their adaptability to change; promoting entrepreneurship and innovation 63 - Design and dissemination of innovative and more productive ways of organising work 64 - Development of specific services for employment, training and support in connection with restructuring of sectors and firms, and development of systems for anticipating economic changes and future requirements in terms of jobs and skills Improving access to employment and sustainability: 65 - Modernisation and strengthening of labour market institutions 66 - Implementing active and preventive measures on the labour market 67 - Measures encouraging active ageing and prolonging working lives 68 - Support for self-employment and business start-up 69 - Measures to improve access to employment and increase sustainable participation and progress of women in employment to reduce gender-based segregation in the labour market and to reconcile work and private life, such as facilitating access to childcare and care for dependent persons 70 - Specific action to increase participation of migrants in employment and thereby strengthen their social integration Improving the social inclusion of less-favoured persons: 71 - Pathways to integration and re-entry into employment for disadvantaged people; combating discrimination in accessing and progressing in the labour market and promoting acceptance of diversity at the workplace Improving human capital 72 - Design, introduction and implementation of reforms in education and training systems in order to develop employability, improving the labour market relevance of initial and vocational education and training, updating skills of training personnel with a view to innovation and a knowledge based economy Measures to increase participation in education and training throughout the life-cycle, including through action to achieve a reduction in early school leaving, gender-based segregation of subjects and increased access to and quality of initial vocational and tertiary education and training 74 - Developing human potential in the field of research and innovation, in particular through postgraduate studies and training of researchers, and networking activities between universities, research centres and businesses Source: Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999.

133 133 ANNEX 10: Sector-specific distribution of employed persons in Luxembourg (NACE Rev. 2) according to origin (in %, ) = cross-border commuters = foreigners (resident population) = Luxembourg nationals Source: Interregionalen Arbeitsmarktbeobachtungsstelle (2012), p.91 ANNEX 11: Density of commuters according to their place of residence (Evolution 1994, 1999, 2010) Source: CEPS/INSTEAD (2012), pp.8 & 9

134 134 ANNEX 12: Housing prices per square meters in the Luxembourg region, 2010 Source: GEOSPECS (ESPON, 2012b, p.894 )

135 135 Country ANNEX 13: Status of domestic policies in Italy and Slovenia that are relevant for cross-country labour mobility (as by 2010) Description & key findings & IT SI Italy allows legal non-eu workers and their families to integrate into the general economy, with all its strengths and weaknesses, while ignoring their specific situation in it. As in most new labour migration countries (CZ, PT, ES), nationals and legal migrant workers have equal access, support and rights. However the public service is losing out on the skills of non-eu residents, unlike in 21 of the 30 other countries. Moreover, the lack of targeted support in Italy means that the jobs non-eu residents do find may be below their qualifications or outside the legal labour market. Immigrants, especially women and youths, benefit from such support in established countries of immigration as well as PT. Key findings are: Favourable labour market mobility and family reunion, as in other new countries of labour migration. New long-term residence requirements may or may not encourage language learning and integration. Security Act lowers score on family reunion, long-term residence and access to nationality. Many new legal conditions are out of step with general societal realities. Anti-discrimination law slightly improves to meet EU standards. Equality body and policies weakest in Europe. Rome consultative bodies model for political participation. Voting rights still absent for non-eu residents. Educating migrant pupils is area of weakness for Italy, EU. Labour market mobility is restricted and Slovenia, at 44 points, scores around the Central European average. While migrant workers have largely equal rights when in jobs, their temporary status may prevent any long-term economic integration. They are limited in accessing or changing jobs, while fewer measures target their specific circumstances. Only certain temporary migrants can immediately access the labour market, with additional restrictions to enter the country in place since Unlike leading new countries of labour migration (ES, PT), those who have a right to work are still denied access to the public sector (as in 10 countries, including IT) and can only set up their own business after 1 year. Certain professions, such as the legal sector, are completely closed off. If migrant workers become unemployed, they can only be entered on the register of unemployed persons if they have a personal work permit that is valid for 3 years or for an indefinite period of time. Their possibilities for employment have been further affected by the crisis, which has shifted focus from promoting their integration and tackling immigrant unemployment to reducing the unemployment of nationals. Slovenia was alone (with IE) in reducing its commitment to migrants specific measures, unlike other countries (AT, DE, LU, PT, ES, EE), where these were maintained. As a result, workers already in Slovenia may no longer benefit from targeted measures to encourage further training. Not only will this affect their ability to advance in the labour market, but those that lose their job will have less chance to be employed, despite their contribution to the economy in periods of growth. On the other hand, they are now better informed of their workers rights through the employment service of Slovenia in an effort to protect them against exploitation. These rights include equal working conditions (as in 29 countries), but do not extend to equal access to social benefits for all (as in only half MIPEX countries, most of which have few migrant workers). Key findings are: Slovenia ranks 18th, above all other Central European countries. Scoring 5th after SE, CA, PT and ES, securing family life is a strength for integration, but may create economic dependency. Economic crisis means fewer migrants can improve skills if they lose their jobs but are better informed on their rights. Wide definitions and application of antidiscrimination principles undermined by weak equality body. Access to nationality still lacks key principles for countries of immigration. Conditions for accessing long-term residence and security best promote integration through settlement. Source:

136 136 ANNEX 14: Draft Structure of the EU Macro-regional Strategy for the Alpine Region The EU Macro-regional Strategy for the Alpine Region aims to bring a new impetus for co-operation and investment to the benefit of all involved: States, regions, civil society stakeholders and, above all, European citizens. It will build on a long tradition of cooperation in the Alps, and will seek to complement, rather than duplicate existing co-operation structures. The Strategy will build upon three general action-oriented pillars (1) To improve the competitiveness, prosperity and cohesion of the Alpine Region; (2) To ensure accessibility and connectivity for all the inhabitants of the Alpine Region; (3) To make the Alpine Region s environmentally sustainable and attractive. The main challenge of the Strategy should be to tackle the economic, social and territorial imbalances existing in the Alpine Region, stimulating an innovative and sustainable model of development, able to conciliate the promotion of growth and jobs, and the preservation of natural and cultural assets in the area. As its main objective, the EU Strategy for the Alpine Region aims to ensure that this region remains one of the most attractive areas in Europe, taking better advantage of its assets and seizing its opportunities for sustainable and innovative development in a European context. The Strategy will focus on areas of (macro) regional mutual interest. Therefore, the priority areas and specific objectives selected should reflect genuine commitment to working together to achieve common solutions to challenges or unused potential. Source: EUSALP- website: