The Visegrad paradox: anti-immigration parties need migrants
People’s migration fears have been easy to exploit for electoral opportunism by many politicians in Europe. Particularly in the Visegrad countries of Czechia, Hungary, Poland and Slovakia, it has either brought nationalist anti-immigration parties into power or helped consolidate their grip on it. Their views on migration could however backfire economically as their economies need many more migrants.
Some of the used rhetoric in the Visegrad countries has been outright hostile, especially towards immigration coming from North-Africa and the Middle-East. Overall, these parties oppose the kind of multiculturalism in Western Europe that they consider a threat to their own countries’ identity.1
Yet, their economies urgently need more people as their labour markets are increasingly characterised by labour shortages, even more so due to changing demographics caused by low fertility rates, aging and emigration.
Europe’s migration discussion and Visegrad positions
The migration debate has been triggered ever since the rapid increase in refugee influxes that started in 2014. Over the years, 626,960 (2014); 1,231,600 (2015); 1,259,955 (2016) and 705,705 (2017) asylum applications were done, most being in Germany.2
During the zenith of the migration crisis in 2015, many politicians of the Visegrad countries were defiant by refusing the refugee relocation quota system.3 Because Romania, the Czech Republic, Slovakia and Hungary refused accepting the redistribution of refugees, the issue ultimately had to be approved by a majority vote.4 Poland reluctantly accepted, but its new government installed in 2015 changed course.
The relocation issue brought about serious polarisation. It prompted several countries including Hungary and Slovakia to file court cases against the decision, which they lost in September 2017.5 On the other hand, countries such as the Netherlands, Sweden and Germany wanted the refugee relocation system to be enforced, if needed through budget conditionality, which would link the EU budget with the intake of refugees.6
Moreover, in December 2017 the European Commission decided to sue Hungary, Czechia and Poland who had refused to comply with the 2015 decision.7
Anti-migration electoral strategies
The agreed refugee relocation system has often been used as a punching bag. The topic helped propel Law and Justice (PiS) into power in Poland’s 2015 Parliamentary Elections, during which Mr. Kaczyński fearmongered refugees could spread “dangerous diseases, parasites or protozoa”.8
Former PM Robert Fico also made the system a key topic in Slovakia’s 2016 Parliamentary Elections. He called multiculturalism a ‘‘fiction’’ and stated he would ‘‘never make a voluntary decision that would lead to the formation of a unified Muslim community in Slovakia.’’9 He won the elections, although losing many votes to other anti-immigration parties.10
Czech PM Andrej Babiš won parliamentary elections in 2017 with similar anti-immigration pledges and recently made headlines stating “I went into politics mainly to look after Czech citizens. Why should we be caring for Syrian orphans?” 11
Likewise, Czech President Miloš Zeman secured his second term in 2018 by playing the migration card.12 One of his campaign slogans was “Say no to immigrants and Drahos (his liberal opponent), this land is ours.”13
Hungarian PM Viktor Orbán exploited the issue by holding a symbolic referendum on the refugee relocation quota system in 2016, with a campaign full of anti-EU and anti-migration propaganda.14 He also spent close to 1 billion Euros on a high-tech border fence.15 In this year’s Parliamentary Elections he seized the topic again to realise his third consecutive victory.16
Yet, much more attention ought to be given in these countries to how much migrants are needed for their booming economies’ labour markets.
This has been a result of consequent high GDP growth of 3 - 4% in the past 5 years, compared to the EU’s average of 2% growth. In 2017, this was 4.8% (PL; Poland); 4.3% (CZ; Czechia); 4.1% (HU; Hungary) and 3.2% (SK; Slovakia) respectively.17
In parallel, unemployment dropped heavily to 4.9% (PL); 2.9% (CZ); 4.2% (HU) and 8.1% (SK) by 2017. Latest forecasts18 by the European Commission show these numbers will continue decreasing sharply by 2.9% (PL); 2.5% (CZ); 3.3% (HU) and 6.3% next year, well below the 5% normal unemployment rate.
As good as that might sound, a side-effect has been that many vacancies remained unfilled. The number of open vacancies has more than quadrupled in the past five years.19
The need for labour
The EC’s Spring and Autumn forecasts20 highlight the risks of labour shortages. In Czechia and Hungary, these shortages are explicitly mentioned for undermining long-term growth, or even overheating the economy in the case of Czechia.
Despite Poland’s huge influx of Ukrainians, there are doubts whether these people can continue filling the existing shortages. Slovakia’s problems are less serious for now, due to having more unemployed and returning Slovaks.
Business surveys confirm labour shortages limit production, building activity and business. In industry, 43,7% (CZ); 83,3% (HU); 49,9% (PL); and 34,9% (SK) of surveyed companies state this is a problem. For the construction sector, 37,8% (CZ); 64,4% (HU); 49,0% (PL) and 30,3% (SK) do. Moreover, in services 17,3% (CZ); 38,3% (HU); 28,9% (PL) and 18,6% (SK) attest.21
The labour shortages have also led to wages rising much faster than the rise in productivity. In Slovakia and Hungary, Volkswagen and Kia for instance were forced to significantly increase wages because of strikes. Generally, labour costs are spiking in the Visegrad countries.22
However, if wages continue rising much faster than the rise in productivity, this could jeopardise essential foreign investment that has helped drive growth.23 Moreover, this would undermine the V4’s economic models of low wages.
Poland offset some of its labour shortages by granting many Ukrainians residence permits for employment. In 2017, this reached a record of 596,916 and with the total number of granted permits reaching 683,228, Poland has issued more first residence permits than any other country in the EU; even Germany was a distant second with 535,446.24
Therefore, the current Polish government could be ironically considered the most supportive of migration in its history, despite its anti-migration rhetoric.25 Between 2013 and 2017, Poland has issued a total of 1,676,893 permits for employment, compared to the remaining three Visegrad countries’ 56,042.
However, it is unclear how many more can/will come and how long they will stay. Furthermore, they could move on to other countries such as Germany.26 Therefore, Ukrainian migration alone will not be enough.
In addition, the V4 is set to suffer from its demographic situation. Emigration and low fertility rates remain serious problems, dating back to economic shock-therapy transitions where many struggled and had no jobs. Due to this, populations have remained stagnant since 1990.27
The accession of 10 new Member States to the EU in 2004 particularly caused many to emigrate abroad in search of (better paid) work abroad: circa 3 million people (registered) left the V4 between 2004 and 2016.28 While profiting from remittances, this caused brain drain and the outflow of high-skilled labour. In turn, it also undermined welfare spending and made government budgets less growth-friendly.29
Demographics could constrain economic growth and governmental budgets again in the future. Baseline projections for 2020 up to 2060 show the Visegrad’s population could decrease by another 6.5 million people.30 In addition, the dependency ratio is set to increase sharply.31
The demographic decline and ageing population has been dubbed an existential threat.32 What ruling V4 anti-migration politicians neglect to understand is that their support depends on continued economic success, which is needed to increase or maintain welfare spending, particularly for PiS in Poland, which lowered the retirement age and introduced child benefits.
Solving the migration puzzle
The V4’s migration dilemma and demographic headache are expected to worsen which means that action is needed. Tight labour markets have already affected the economy, as it has limited expansion in different sectors. Additional capacity troubles could cause additional slowdown, especially if labour wages continue rising too rapidly.
Therefore, the current hostile rhetoric and views by the V4 on migration could backfire economically as many more migrants are needed to fill labour shortages and keep economies running smoothly. This requires an honest debate in which the pros and cons of migration need to be discussed as well as the V4’s own demographic problems, since dependency ratios will continue to increase.
Rather than a threat, migrants could be essential to the V4’s economic models. Ukrainian labour has prevented problems of labour shortages in Poland. However, since it is unclear how many more will come or stay, Poland and the other Visegrad countries would be wise to keep this in mind if they would opt for selective migration from Slavic countries only. The hard truth is that the Visegrad region needs more migrants.
In addition, more effort will be required to stimulate people having children and attract former emigrants. The V4 should also make sure to keep current migrants, especially Ukrainians in the case of Poland. While the current populists are using anti-immigrant sentiments to win elections, they must realise that they could lose those elections when the economy changes for the worse.
- 1Euractiv, ‘’Visegrád and migration: Few prospects for a change in position’’, 16 January 2017.
- 2European Parliament, ‘’EU migrant crisis: facts and figures.’’ 30 June 2017.
- 3European Commission, ‘’European Commission Statement following the decision at the Extraordinary Justice and Home Affairs Council to relocate 120,000 refugees’’, 22 September 2015.
- 4BBC, ‘’Migrant crisis: EU ministers approve disputed quota plan.’’, 22 September 2015.
- 5EUobserver, EU court overrules Hungary and Slovakia on migrants, 6 September 2017.
- 6Financial Times. ‘’Merkel plan to link EU money to migration policy hits opposition.’’ 23 February 2018
- 7BBC, EU to sue Poland, Hungary and Czechs for refusing refugee quotas, 7 December 2017.
- 8Euractiv, ‘’Fortress Europe lives on in Poland’’, 29 May 2018.
- 9Deutsche Welle, ‘’Slovakia vows to refuse entry to Muslim migrants’’, 7 January 2016.
- 10Reuters, ‘’Slovak PM Fico wins election but faces tough task to form majority’’, 5 March 2016.
- 11Radio Praha, ‘’PM Andrej Babiš: Why should we be caring for Syrian orphans?’’, 17 September. 2018
- 12Reuters, ‘’Veteran Zeman wins last big battle in Czech presidential vote’’, 27 January 2018.
- 13Deutsche Welle, ‘’Anti-immigration Czech President Milos Zeman attacks press in swearing in speech’’, 8 March 2018.
- 14Financial Times, ‘’Hungary referendum throws Brussels migrants plan into disarray’’, 24 February 2016.
- 15Reuters, ‘’Hungary builds new high-tech border fence - with few migrants in sight’’, 2 March 2017.
- 16The Guardian, ‘’Hungary election: Viktor Orbán declares victory - as it happened’’, 9 April 2018.
- 17Eurostat, ‘’Real GDP growth rate – volume, percentage change on previous year’’.
- 18European Commission, ‘’ Economic forecasts’’.
- 19Eurostat, ‘’Job vacancy statistics by NACE Rev. 2 activity, occupation and NUTS 2 regions - quarterly data’’.
- 20European Commission, ‘’Economic forecasts’’.
- 21Eurostat, ‘’Confidence indicators by sector’’.
- 22Eurostat, ‘’Labour cost index by NACE Rev. 2 activity - nominal value, quarterly data’’.
- 23Financial Times, ‘’Labour shortages put central European growth under threat’’, 26 June 2017.
- 24Eurostat, ‘’First residence permits issued in the EU Member States remain above 3 million in 2017’’, 25 October 2018.
- 25Tilles, Daniel, ‘’Poland’s ‘anti-immigration’ government is overseeing one of Europe’s biggest waves of immigration – but doesn’t want to admit it’’, NotesFromPoland, 3 October 2018.
- 26Radio Poland, ‘’Most Ukrainians in Poland would leave for Germany: study’’, 3 August 2018.
- 27Eurostat, ‘’Population on 1 January by age and sex’’.
- 28Eurostat, ‘’Emigration by age and sex’’.
- 29Atoyan, Ruben at al., ‘’Emigration and Its Economic Impact on Eastern Europe’’, International Monetary Fund, IMF Staff Discussion Note July 2016 DN/16/07.
- 30Eurostat, ‘’Population on 1st January by age, sex and type of projection’’.
- 31Eurostat, ‘’Baseline projections: demographic balances and indicators’’.
- 32Mazurczak, Filip, ‘’The V4’s greatest existential threat’’, Visegrad Insight, 5 August 2014.