Dutch Fear Rise in Immigration as EU Law Changes

Dutch Deputy Prime Minister Lodewijk Asscher during a press conference after the Council of Minsters in The Hague, The Netherlands, 07 June 2013. Photo by EPA/BGNES

By Matt Steinglass in Amsterdam
The Financial Times

When Lodewijk Asscher, deputy prime minister of the Netherlands, this month warned that migration from eastern Europe threatened his country’s wages and social welfare policies, he had people like Viktor in mind.

Viktor, who does not want his real name to be published, left his native Bulgaria three years ago to come to the Netherlands. In his home country, Viktor, a logistical engineer, earned EUR 350 a month as head of an emergency response unit at the national railway company. In the Netherlands, he works as a handyman, making up to EUR 100 cash a day – less than his Dutch counterparts – and paying no taxes or social insurance.

The Netherlands, Britain and several other western European countries have maintained work permit requirements for Bulgarians and Romanians since they joined the EU in 2007. But even with that restriction, there has been a steady rise in immigration from those countries. Those requirements will expire on January 1, intensifying fears about a further rise in immigration and what this could mean for wages and services.

Mr Asscher compared the situation with a “Code Orange”, the warning Dutch authorities issue when high water levels threaten to overwhelm the dikes.

Sitting in his sister Maria’s smoky kitchen in a heavily eastern European neighbourhood near Amsterdam, Viktor however said such concerns are overblown. “There are only seven million people in Bulgaria, and two million have emigrated since the fall of communism. Most of the people who want to leave have left already,” he said.

The Netherlands once boasted of its history as an asylum for immigrants, such as the refugee Jews and Protestants who flocked there in the 16th century.

But over the past decade, it has been wracked by debates over assimilation, with the rightwing populist Geert Wilders denouncing the country’s Muslim immigrants, mainly ethnic Moroccans and Turks. More recently he has turned his fire on immigrants from eastern and central Europe, setting up a controversial website last year to solicit complaints about their behaviour.

Such attacks play on fears that eastern Europeans are prone to crime and compete for Dutch jobs, driving down wages, particularly for unskilled labour.

With the Netherlands in the midst of a year-long recession and unemployment up from 4.4 per cent in 2010 to 7 per cent, such concerns have sharpened. The far-left Socialist party has warned of “buses full” of low-wage workers from Bulgaria and Romania arriving next year when the restrictions are lifted and demanded that the government maintain the employment barriers.

The government, a coalition between the centre-right Liberals of Prime Minister Mark Rutte and Mr Asscher’s centre-left Labour party, has mainly played down the immigration issue. But with polls showing the Socialists and the Freedom party pulling ahead, they are starting to feel the pressure.

The numbers of eastern Europeans in the Netherlands have indeed grown rapidly since EU expansion. Since 2005, the official Polish-born population in this country of 17m has more than doubled to 110,000, while the Bulgarian and Romanian communities have quadrupled to a combined 30,000.

Such figures count only those immigrants who have officially registered as residents; unofficial residents may add another 50 per cent to those figures. In Viktor and Maria’s neighbourhood of two-storey brick houses built a century ago for the Dutch working class, corner bars are now filled with Polish men in grey track suits watching eastern European football teams on satellite TV.

Most economists think such immigration is a boon to the economy. A recent study by the Dutch think-tank SEO Economic Research found that labour migration from eastern Europe was mainly temporary, and that it had little or no effect on local employment or wages while contributing a net EUR 1,800 a head to the government treasury.

But that study assumed that employers who hire foreign workers observe Dutch labour law, including the national sector-wide wage agreements between employers and unions. Dutch unions say workers such as Viktor often receive far less.

“On the big energy plant construction projects we researched in the north, we found that scarcely any firms were sticking to the wage agreements,” said Herman Pol, an organiser for the main Dutch metalworkers’ union. Contractors, he said, typically won bids with offers that required them to undercut wage norms by several euros an hour.

Mr Asscher and the unions have called for a crackdown on recruiters and employers who break labour laws, not on the workers. A task force set up last year has already begun prosecutions against 84 recruiters and 174 employers.

Mr Asscher also wants to bring up discussions at the European level about how to limit labour migration if it swells too abruptly once the limits are lifted. But his vagueness has frustrated supporters of immigration while failing to satisfy its opponents.

“If you say that ‘the dikes are at the point of breaking’, then it sounds like you’re planning to limit labour migration, but he isn’t. I think he should limit the work permits,” said Paul Ulenbelt, a Socialist MP. “But he thinks he can just get co-operation from other European countries [to manage the problem].”

There is no realistic chance that the government will maintain work permits for Bulgaria and Romania after January 1, as it would explicitly violate EU law. And according to Viktor and Maria, it would in any case have little effect. They and their Bulgarian friends already live in the Netherlands legally.

Some, such as Viktor are working in the “black” economy to avoid Dutch VAT and income taxes. Others obtain work permits by setting up companies or finding a Dutch employer to back their application. Either way, they do not think the new law on January 1 will change anything – those who want to work will find a way.

“The end of the work permission won’t be a big difference,” said Maria, who plans to return to Bulgaria in a year or two anyway. “Whether you have a permit or not, the main question is, where can I work?”

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