In some cases across the new accession countries, what remains to be seen is infrastructure improvement. However, says Eder, in some cases the cumulative infrastructure deficits have been so pronounced over 50 years

A REACH Too Far? O n June 1, 2007, the EU's registration, evaluation, authorization and restriction of chemicals (REACH) legislation to control the use of toxic chemicals in industry will go into force. According to EU documents, the costs of registration, including the necessary testing, are estimated at EUR 2.3 billion over the 11 years that it will take to register all the substances covered by REACH. The total costs, including those to downstream users, are estimated at EUR 2.8 billion to EUR 5.2 billion, depending on the extent to which registration costs will increase prices of chemicals and on the costs of substituting chemicals that will be withdrawn (an estimated 1- 2 percent). A new European Chemicals Agency will be established in Helsinki, Finland, in 2007 to manage the new central databases.

that updating has been simpler and faster.
   "All of those countries have deficits, but on the other hand, in the last 10 to 15 years, new technologies have been installed that are not available in the main EU countries," he says, citing the replacement of old phone cable by fiber. When it comes to road and rail projects, he says, "the farther east you go, the worse the situation is." Even in the nations attracting the lion's share of projects, there are obstacles, he says, citing long highway project delays in Poland, Slovakia and the Czech Republic. Hungary, however, has made the most progress on transport issues, he says. But another aspect of transport is the simple presence of so many borders.
   "If you're talking about transport lines, you very often will have borders in between which are insecure, or where there are governments that are complicated with regulations, customs and so on," he says. "That is the enormous deficit of the Balkan region, which is a major region for transport."
   By far the biggest topic in European economic development, however, is not so much movement of goods as movement of people, i.e. the diaspora of work force from some countries to others within the EU. Eder says, however, that worker movement is not as fluid as everybody thinks.
   "The main disadvantage is people are afraid of moving because of language barriers," he says, contrary to the notion many have of multilingual Europeans. Family connections and lower levels of education in some areas also are contributing factors. Many were afraid of "a big wave of people," he says, "and that didn't happen." At the same time, free movement is supporting growth in several European countries. Eder cites Spain as an example.
   "One of the major banking companies there said Spain wouldn't be able to survive the current level of growth if they didn't have immigration," he says. But the influx is not coming from Eastern Europe or Africa: Eder says up to three quarters or more of Spanish immigrants are coming from South America.
   Eder says Poland, the Czech Republic and Slovakia also need immigration to prop up their growing economies, especially in light of their aging societies.
   Asked how many jobs created in Western Europe may be going to transplanted Eastern Europeans, Graham Hay, business economist for Cambridge Econometrics, says via an e- mail interview, "Only the U.K., Sweden and Ireland have fully opened their doors to Eastern Europeans following their EU membership – all other Member States have opt- outs of varying degrees for the next few years. We are in fact doing some work on the effects of migration within the U.K. for the German government, and this has shown that the stock of migrants from Eastern Europe coming to the U.K. is approaching half a million, with most of these people registering as working. While undoubtedly there has been some displacement of indigenous workers as part of this employment growth, the statistical evidence examined so far does not show any significant effect on unemployment, suggesting that the majority of workers are creating jobs, perhaps doing work at wages which local labor would not consider."
   He says Lithuania, Bulgaria and the Czech Republic also have spot skills shortages. The firm expects to issue a work- force skills forecast for Europe later this year.
   France in particular has come under criticism for its labor policies from Hay's firm, despite recent business climate reforms in other areas. Asked what that country has to do in order to achieve Lisbon Agenda goals in the areas of labor mobility and the regulatory framework, Hay says, "I think first of all the French public have to be more accepting of the need for reform. Beyond that, the French state has to stop protecting 'strategic' sectors from foreign takeovers, as has been seen in the utilities market. Also, there is the prospect of the EU Constitutional treaty being revived in some form under the German EU presidency in 2007, and France should not try to have the part devoted to trade and competition set aside."
   As for labor, "the French government failed to push through reforms to promote the employment of under- 26- year olds in 2006, but that does not mean it should forget the issue," says Hay. "Making it easier for companies to release and hire workers would help to promote labor market mobility. Being less resistant to migration would also help. France only removed immigration restrictions on eastern EU workers in May 2006 – two years after the EU states acceded, and even then it is a gradual easing of restrictions over 2006- 09, rather than an instant and total relaxation, despite shortages in some sectors."