OECD, Iceland the Euro

Here's a question for all you OECD observers out there. I came across this report in the FT today about the OECD urging Iceland to adopt the euro, and it struck me that the OECD might be sticking its head pretty far above the parapet here.

It's one thing for a newspaper to endorse EU membership or Eurozone membership for a country in the editorial pages; quite another for an international organisation to make strong statements that will so obviously have such major political implications in that country.

Is it just me? Is this sort of thing quite common and nothing too remarkable or controversial?

Centre for European Reform

One of the best EU think tanks, the Centre for European Reform runs a good-quality blog, which they populate with challenging opinions from their staff. Like Caroline Lucas' blog, the postings are perhaps fewer and further between than they might be, but CER does at least produce its thoughts in written form, if not on their blog, very regularly and frequently.

The blog looks at some of the big EU issues, such as the Constitutional Treaty (now the Reform Treaty), the EU's Middle East policy, the prospects for Turkish membership, and more. I'd like to see more postings on economic policy and on hot issues like data protection and privacy, but maybe that just reflects my personal bias. After all, they do plenty of excellent work in these areas (see their publications on competitiveness and on Justice & Home Affairs), so it's not like they don't have anything to say.

Perhaps motivation is low because of the low level of comments (to be fair, at the time of writing they're doing a lot better than I am on that score, but I'm still very new!). Chicken or egg?

Anyway, what they do post is of high quality, and I enjoy reading them from time to time.

Polish Plumbers Apply Here!

The Polish plumber was the bogeyman of European politics for the two years that the Services Directive was going through co-decision in the EU institutions, coinciding with the accession of Poland and seven other former Communist Bloc countries - perhaps not quite a hate figure, but certainly feared as the symbol of Eastern European workers coming to Western Europe to "take our jobs", working for East European wages. The Polish tourist board outflanked French trade unionists by using humour and publishing the now-famous poster of a hunky, wrench-toting, pipe-wielding Polish plumber addressing French lady tourists saying, "Je reste en Pologne. Venez nombreux!"

At the time, the argument went something like this: Polish plumbers will come in large numbers to "old" EU countries like France and Germany, will price local competitors out of the market, and will not contribute a penny to local taxes. This has all been proved to be nonsense by the UK and Ireland, which have no successfully hosted several hundred thousand Polish workers (not just plumbers), of whom the overwhelming majority pay taxes and fill labour shortages. Most EU Member States took advantage of a "phase-in period" for the freedom of movement for workers from the new Member States, and have seen very limited immigration. Germany and Austria retain these controls. What immigration there has been there seems to be part of the grey economy, with the workers legally present in the countries, but working illegally.

And now we have the German government acknowledging a skills shortage in Germany, and calling for immigration from the East to be made easier. Great! Let's all gloat at the Germans and say how pleased we all are that they were wrong. And wrong they undoubtedly were. But is it really that simple?

Now, I'm not an economist, but I know for a fact that Poland is facing severe shortages of skilled construction workers, and yes, plumbers! Word is, you can't get hold of a decent plumber anymore, because all the best, most enterprising ones, have moved West. Can it really be that good for Poland to lose large numbers of its best and brightest? Sure, it makes the government's drive to cut unemployment much easier - the stats are good even taking into account the fact that many who are working abroad are claiming unemployment benefits at home.

There seems to be a consensus that most of the emigration is temporary, that workers are sending money home and will return when the Polish economy begins to catch up. That may be the case, but in the meantime, Poland and some of the other new Member States are making do with shortages of their own.

Shouldn't this really be about addressing the need for better education and training in all EU countries, rather than moving skilled workers from low-wage countries to high-wage countries? Isn't the issue here that all EU countries need these workers, and aren't we making a mistake if we seek to solve the problem only through labour mobility?

Don't get me wrong - I am not in favour of closing the borders. But I don't see governments addressing this in a way that is sustainable for Europe - the German government has little interest in what's happening in Poland; it wants to find the easiest way to fix the skills shortage. Shouldn't policy be more consistently directed at addressing the underlying structural problem?

I don't know. Maybe national governments are taking this seriously and are doing lots to increase the skills of the local labour force, and the media aren't reporting on it. But I have my doubts.

I have a confession to make: I have used a Polish plumber, a Polish handyman, and a Polish-owned Belgian construction company here in Brussels. They are competitive on price, especially for the small jobs, and they do good work. By contrast, my experiences with Belgian plumbers have invariably been negative: rude, incompetent, late, untidy, and expensive. The Poles are "incontournable" in Brussels, but I expect the locals still rule the roost outside the big city.

A Fistful of Euros

A Fistful of Euros is a good, solid, multi-authored blog on general European affairs, not restricted to EU politics. Which makes it a refreshing change for those of us who spend so much time with our spectacled eyes glued to our EU navel that we feel s wee bit out of touch with the Real World!

It's somewhat left of centre in political sympathies, but reassuringly free of party politics and the inevitable defence of party lines that this entails.

A recent post that attracted my attention was from July 16, by Alex Harrowell, on the EU as a force for reform amongst its neighbours. This is a truism that you often hear in the Eurobubble, and the stock examples given are the EU's activities in promoting civil society in places like Georgia, Ukraine, and Russia, as well as the gradual adoption of the acquis communautaire and associated reforms in candidate countries such as Croatia and Turkey.

The nice thing about this post is that it gives an example of a specific EU action that has resulted in reform in a neighbouring country - the effect of the EU's blacklist of airlines on Moldova. Perhaps a little light on detail, but interesting nonetheless. If there are any Moldova experts reading this, I'd be curious to know if there was any background that A Fistful of Euros is missing and that might be important - e.g. pre-existing plans to ban the banned airline, the detailed context of national politics, the role of Russia and other neighbours, etc.

Anyway, A Fistful of Euros, well done for being thought-provoking. Keep up the good work.