The approaching Eastern Enlargement of the European Union raises fears about a possible huge increase of the emigration flows between new Central and Eastern European member states and the current EU countries. On the one hand, the internal differences in the income levels after the Enlargement will reach levels seriously higher than any time before in the history of the EU. On the other hand, extended maintenance of barriers to the free movement of labor between the old and the new members would violate the basic rules of the single market, possibly reducing the economic growth in either part of Europe. Besides, it could result in a general perception of a “second class membership” being offered to the new European democracies.

The topic of possible high flows raise strong fears in the countries that have become, during the last decades, the most popular target for emigration in Europe. In particular, Austria and Germany are considered to be the likely host countries for the majority of the new emigrants¹. In this paper we estimate the potential migration flows from ten Central and Eastern European (CEE-10) candidate countries to various regions of Austria. The estimates utilize the outcomes of cross-country comparisons based on the experience of the three Mediterranean EU latecomers (Greece, Portugal, Spain; we will refer to them as Club-Med).

The potential migration flows - or the change in the "stock" of nationals of CEE-10 living on permanent basis in Austria by the year 2010 - are calculated under the following assumptions:

1. By the year 2010 the enlargement process will have been concluded..
2. The membership will implies the liberalization of the movement of people.
3. The economic development of CEE-10 will take place according to one of two presented scenarios: either an “optimistic” scenario of a relatively fast growth and macroeconomic convergence, or a “pessimistic” scenario of the slower growth.
4. The migration behavior and motivations of the citizens of CEE-10 will be similar to those observed in the Club-Med. On the one hand, people will be ready to emigrate if the income relations remain very unfavorable for their home countries. On the other hand, serious obstacles for migrations created by the geographical, cultural and social distance between the various European countries will be still present².

While assessing the likely migration flows from CEE-10 to Austria one should take into account several facts. First, the past experience of the EU does not support expectations about possible huge migration flows after the labor market liberalization³. Historically, the creation of the single market - unifying regions that even today range in their per capita GDP from 1 to 7.5, or from 1 to 5 if the numbers are adjusted for the purchasing power of the currencies - led to much less migration effects that expected . The possible explanation of this fact is a relatively small mobility of labor in Europe, that may be explained by a mix of various cultural, social, linguistic, economic, and institutional factors.

Second, the accession of CEE-10 to the EU may lead to a relatively fast reduction of the gap in GDP per capita and income, both due to the accelerated long-term economic growth, and to the likely real appreciation of the currencies connected with increased capital inflows and transfers from the EU as well as with the general economic convergence within the enlarged EU⁴. That should lead to a much smaller emigration pressure, especially if the West European labor markets are opened only gradually.

Third, the Polish experience also suggests, that considering the current income relation and the relaxation of legal obstacles as the only variables explaining the propensity to migrate may be misleading. The highest emigration from Poland to the West was observed during the 1980s, in a period of the collapse of the communist economy, but also of serious formal problems for the emigrants (very restrictive visa policies). During the 1990s the propensity to emigrate considerably lowered, despite a complete liberalization of the freedom of movement of people (abolition of visa requirements). Of course, the income relations favorably changed during the 1990s, but one may argue that a general improvement of the prospects of economic and social development of Poland also contributed to this phenomenon. If correct, such a hypothesis may also explain a relatively low emigration from Club-Med.

Fourth, the scale of the migration flows can be greatly reduced by the developments in the West European labor markets. High unemployment rates in the EU may seriously hamper the possible flows of migrants.

Table 1 shows the basic data on the current state of development of CEE-10 compared to Austria.

One may note serious differences in the economic performance and the development level among CEE-10. The Central European, and the Baltic countries showed a satisfactory economic performance in the period 1996-2000 (with the exception of the Czech Republic), while the Balkan countries were struggling with the deep recession and weakening currencies. As far as the income levels are concerned, the lowest level of 5-6% of that of Austria is observed in Balkan countries (while adjusted for the purchasing power differences that number grows to 18%), the medium level of 8-13% in Baltic countries (ca.20% in PPP terms), and the highest level of 15-20% in Central Europe (30-40% in PPP terms). Slovenia, with the income level of 35% of that of Austria (56% in PPP terms) is a special case.

On the other hand, there exist serious differences in the size, absorption capacity, and the economic performance of various regions of Austria. Those are presented in Table 2.

Both the size and the level of economic development suggest that Wien and Niederösterreich are likely to attract the highest levels of immigration. Both regions represent 37% of the total population of Austria and almost half of its economic potential. Moreover, this area has a direct border with three accession countries. That may be conducive to both the permanent- and short-term migration. Generally low unemployment levels in all the regions of Austria will make the migrations even more plausible.

Under the current income relations ranging from 1:3 to 1:20, one could expect huge migration flows. However, the economic development that is going to take place over the coming decade may seriously reduce the differences. Table 3 presents the macroeconomic scenarios for CEE-10 under two development scenarios, based upon the endogenous growth model.

1. A number of studies deal with this issue. A recent survey of the studies can be found in: Globalisation, Migration and Development, OECD 2000, and The Impact of Eastern Enlargement on Employment and Labour Markets in the EU Member States (see http://europa.eu.int/dgs/employment_social/news_en.htm).
2. For the analysis of the Club-Med. experience compare: Immigration in Southern Europe, M.I.Baganha (ed.), Oeiras, Celta Editora 1997. and Globalisation, Migration and Development, OECD 2000. The past migration trends in CEE-10 are summarized in: Causes and Consequences of Migration in Central and Eastern Europe. Podlasie and Śląsk Opolski: Basic Trends in 1975-94, E.Jaźwińska, M.Okólski (eds.), Warszawa 1996.
3. See A.M.Williams, The European Community. The Contradictions of Integration, Blackwell, Oxford 1994
4. See R.E.Baldwin, J.F.Francois, R.Portes, The Costs and Benefits of Eastern Enlargement, Economic Policy, No.24, 1997, pp.125-170; also W.M.Orłowski, The Road to Europe, European Institute, Łódź 1998.