Geoscience Reference
In-Depth Information
Without neglecting at all the importance of compensatory motives, the argu-
ment in this topic highlights a different set of motives to pursue interregional
transfers. The emphasis is not so much on compensation, but on a broader
strategy to minimize disruption within a Union increasing in internal com-
plexity. I put significant weight on mobility: constituent units face a trade-
off between the interregional income transfers implicit to centralization and
their capacity to maintain their preferred policy choice to cope with their spe-
cific labor market risks. This trade-off will be all the more intense the larger
the levels of mobility (or the prospect thereof) between regions. Interregional
transfers, I argue, facilitate a mutually beneficial exchange: poor regions obtain
additional resources whereas wealthier specialized regions protect themselves
against undesired inflows of low-skilled workers and dependents. In so doing,
interregional transfers are both a compensation to weaker members of the
Union and an insurance mechanism that helps protect the more advanced, spe-
cialized ones. Is there any evidence in support of such logic during the process
of European integration?
The free circulation of workers has been a central concern throughout the
process of integration, a concern that grows stronger as the economic het-
erogeneity of the Union increases. In an innovative analysis Schneider (
2009
:
85-103) shows that the likelihood that current members require restrictions on
the movement of workers from new entrants increases when current members
and candidates share high levels of industry employment, significant unemploy-
ment, and a large contingent of foreign population. The demand for restric-
tions is even stronger in current members with relatively lower levels of GDP
per capita. As far as low-skill competition is concerned, poorer members have
more to fear from similarly poor (or poorer) new entrants. Indeed, tempo-
rary restrictions on workers' movement applied to new entrants in both the
Mediterranean and East European enlargements, and were closely linked to
issues of interregional redistribution.
The case of Spanish negotiations to enter the European Economic Com-
munity provides an illustrative example. Several aspects of this process help
illuminate the link between mobility and interregional transfers. The first one
concerns the nature of the costs for current members. In line with the argument,
a large proportion of the costs in current members' economies derive from spe-
cialized sectors. During the negotiation period (1978-1985), core members
of the European Economic Community expressed serious concerns about the
impact of the incorporation of the two democracies, Spain and Portugal. The
concerns affected first and foremost the circulation of agricultural products,
and its impact on producers. The large size of agricultural and fishing employ-
ment sectors in Portugal and Spain posed a looming threat on similar sectors in
France and Ireland. Second, there were significant worries about a large inflow
of workers. These reflected concerns, notably by traditional destinies of Span-
ish low-skilled labor (such as Germany, Luxembourg, or France), about the
inability of current members' labor markets to properly incorporate an unwel-
come surge in labor supply. Finally, Ireland and Greece were worried that new
