How will the EU crisis affect free movement?

The Eurozone crisis has been dominating the headlines for months. Much has been made of the impact it is having on the flow of capital, now commentators and policymakers in the UK are starting to pay attention to its impact on the flow of people. This post explores the current and future impact of the fiscal crisis on intra-EU migration from a UK perspective.

The first ripples caused in migratory patterns saw the movement of a limited number of private individuals to London. Concrete statistics are difficult to find but news reports are suggesting that London is fast becoming a haven for the Eurozone’s super-wealthy. Between 2007 and 2011 61% of residential purchases in prime central London areas were made by overseas buyers. Anecdotal evidence has suggested that Greek, Spanish, Italian and French investors have made up a proportion of these. Central London property is seen as safe investment and the city provides an opportunity to escape new tax regimes imposed by governments struggling to secure their finances. A second wave of migration is expected if one or more of the debt burdened states suffers fiscal collapse. The UK is bracing itself for immigrants trying to escape mass unemployment or political turmoil in Eurozone nations. The Home Secretary’s reaction to this potential wave suggests that it is anticipated to be larger in size and to break with a greater political impact than those which preceded it. In an interview with the Telegraph Theresa May stated that "work is ongoing” on contingency plans to deal with European immigration if the financial crisis dramatically escalates.

Any attempt to control immigration from within the EU would face several steep challenges. The first of the challenges would be legal. The treaty as it stands contains very little room for Member States to restrict free movement. Freedom of movement of people was enshrined in the Treaty of Rome as one of the pillars of the internal market. It forms part of the Treaty on the Functioning of the European Union at Article 45, and ideas of free movement and European citizenship can be found in Articles 20 and 21 of the Lisbon Treaty. The only ‘get-out’ clause is Article 347 TFEU which states that

‘Member States shall consult each other with a view to taking together the steps needed to prevent the functioning of the internal market being affected by measures which a Member State may be called upon to take in the event of serious internal disturbances, affecting the maintenance of law and order, in the event of war, serious international tension constituting a threat of war, or in order to carry out obligations it has accepted for the purpose of maintaining peace and security.

The fiscal crisis would have to evolve in a dramatic fashion for the clause to be considered, and even then it would appear that some form of consensus is needed before steps can be taken. It seems highly unlikely that if the Eurozone crisis was in a state to call this clause into play, a consensus could be reached to make it effective.

It is far more likely that if UK were to restrict free movement it would need to politically manoeuvre the legal hurdle. The treaty would have to be amended. There have been rumblings in other key EU countries against free movement. Sergio Carrera, a Senior Research Fellow at the Centre for European Policy Studies, has described how challenges to freedom movement ‘continue to proliferate’ in member states. The fallout from conflict in North Africa saw a clash between France and Italy as the former had to deal with refugees issued with residence permits by the Italian government. Attempts to reform the Schengen zone in light of this crisis have made little progress. It is doubtful whether a wholesale change to Treaty provisions relating to the free movement of people could move any quicker. There are recent historical precedents for immigration restrictions between EU member states. When the A8 members joined in 2004, and the A2 members joined in 2008 the existing E-15 states were permitted to place restrictions on free movement for a 7 year transitionary period. These rules were aimed at facilitating the internal market and not restricting it. Member States were still required to gradually progress the European programme and could not regress it for their own political convenience.

Overall a suspension of free movement seems unlikely without a disintegration of the Union itself. As they stand the legal barriers are insurmountable and the UK would struggle to muster the political will to break them down. If the Eurozone crisis were to significantly increase immigration to the UK then the Home Secretary would have to weather the domestic political storm.