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|Just as the political row over the levels of immigration into
Britain, particularly from eastern Europe, reaches new highs,
economic indications are starting to suggest the panic may be
It just might be that in 10 years' time people will be grumbling
that they can't get a Polish plumber any more and are having to pay
an unreliable British workman a lot more to do the same job.
That might sound daft, given new government figures showing more
than a million immigrants have arrived in the past decade.
Even though the figures are backward-looking, people have projected
them into the future and started to talk of an ever-expanding
population and the need to plough up the green belt to build
millions of new houses. But do all those assumptions stand up to
The issue boils down to this: do Poles, Lithuanians and others from
eastern Europe come here because they love Britain's climate and its
charming people or do they come here for the work?
I suspect it is the latter. After all, did the British Auf
Wiedersehen Pet builders stay in Germany in the 1980s or return home
when there was more work here? Two things will determine how long
east Europeans stay: the jobs available here and the jobs available
Britain, as we know, has just been through the greatest house price
boom of all time and commercial property has also seen a building
frenzy. This has created lots of jobs on the big construction sites
and house renovation.
But the commercial property bubble has already burst and there are
clear signs the housing market has peaked. This could soon mean a
fall in the number of jobs in areas where many eastern European
workers have gone in recent years. So far, so obvious. But just as
important is what's happening in the economies of eastern Europe.
The figures are surprising and challenge the idea that everyone in
the east has fled west because of a total lack of economic prospects
Late last week the European Bank for Reconstruction and Development
(EBRD), which analyses the economies of eastern Europe and lends
money to them, released its annual "Transition Report" which
provides a revealing snapshot of what is happening from the Black
Sea to the Baltic and across the vast expanse of Russia and the
former Soviet republics.
The region, the report predicted, will enjoy record economic growth
this year of 7% and only slightly less in 2008. The economy of
Poland, easily the biggest country by population in eastern Europe
with 38 million people, is growing at about 6.5% this year, more
than double the pace of the UK. It has also been the fastest growing
economy in the region since the collapse of communism. Unemployment,
though still high, has fallen from 20% five years ago to 12.3% and
is still dropping.
The EBRD's chief economist, Erik Berglöf, said pay for skilled
labourers was rising very rapidly, partly owing to the fact that
many of the country's most skilled workers had pushed off to
Britain. Fascinatingly, he said Poles want to work in Poland, not
"Things are changing. Some economies in the east are growing rapidly
now. In the long term we will see emigration [from Britain]. Many
Poles would prefer to work in Poland. There is a strong force of
In last month's elections Poles threw out the Law and Justice party
and brought an end to the bizarre two-year rule of twin brothers
Jaroslaw and Lech Kaczynski as prime minister and president.
Although Lech remains president until 2010, the wave of optimism
that has accompanied the new prime minister Donald Tusk and his pro-
European Civil Platform party can only be good for the Polish
And a strong economy may encourage some Polish workers in Britain,
who have been sending money home and watching events from afar, to
go back, especially if work here becomes more difficult to find. A
similar phenomenon has occurred with Ireland over the past 15 years.
The EBRD report is packed with interesting data. The whole of
eastern Europe is enjoying robust growth on the back of strong
domestic demand, high levels of investment and the money flowing
back from overseas workers. Russian growth has also been boosted by
high prices of energy.
The report also contains a warning for Britain's "fly-to-let"
brigade who have snapped up properties in places such as Bulgaria,
Hungary, the Czech Republic and the Baltic states in the hope of
making a quick buck.
It shows house price gains of 40% a year in the likes of Ukraine,
Romania and Latvia over the past three years, but warns that the
boom is now over. Berglöf pointed to Latvia, where prices have begun
to fall. He expects a moderation in the pace of rises, rather than
outright crashes, but the risks are there.
House prices in Poland have risen more moderately, by just over 10%
a year in recent years, so it may be less liable to damage by a
slowdown in the property market.
The economies of the east are facing similar pressures to those in
the west and will almost certainly be affected by the global credit
crunch as bank loans for businesses and mortgages for home buyers
become scarcer and interest rates rise. Indeed, this is the main
reason the EBRD doubts growth in the region in 2008 will match this
Eastern Europe is fascinating because it has gone from a centrally
planned economy to a capitalist one in a very short time - only 18
years. Fortunes have varied. The westernmost countries, such as
Poland, have seen national income rise by an average of 42% since
1989. South-east Europe - including the Balkan countries, Romania
and Bulgaria - has seen national income barely rise, while the
former Soviet Union, including Russia itself, still has a lower
national income than in 1989.
The report examines peoples' attitudes to transition. The
overwhelming view is that people think their household wealth has
deteriorated since 1989 and the present economic situation is worse -
although opinions are more positive where economies have grown
In the old days there was more or less full employment, whereas vast
numbers have been thrown out of work by the transition, as
inefficient communist-era factories have been closed en masse.
Unemployment is clearly a main cause of unhappiness and explains the
wave of "Ostalgia" sweeping East Germany, for example, where a lot
of people would apparently like the Berlin Wall rebuilt.
Fortunately the EBRD report shows huge support for democracy rather
than authoritarianism across all former Soviet bloc countries, in
spite of the upheavals of the transition years. It also shows robust
support for a market economy rather than central planning.
The one notable exception is Russia, whose people are the least keen
of the whole region on democracy and free markets, probably because
their brand of winner-takes-all capitalism has created huge
inequality and impoverished millions.
It is to be hoped that the strong economic growth of recent years in
the region will continue in spite of the global credit crunch, high
oil prices and a fading property boom. The region has built up
momentum and Berglöf says it has proved resilient to events so far.
The EBRD report warns the governments of the region to continue
reforming institutions and public services to ensure all their
people can benefit from the fruits of higher economic growth. And
the more these countries improve, and the richer they will get, so
will many of their brightest and best return home from the west.
Doubtless some will knock this for being a guardian article. However, I think it makes some good points. A lot of the Poles who have come over will eventually tire of microchipped wheely bins and return home. Many workmen seem to be constantly coming and going away again. It's much more fluid than people realise.
You can't get plumbers or carpenters in Poland - too damn lazy.
My sister-in-law wanted to have some fitted pine wardrobes made - fairly major work really.
Carpenter no. 1
Carpenter no. 2
Sometime in the spring, perhaps. Or maybe summer.
Carpenter no. 3
Of course I'll be happy to do wardrobes for you, but I don't want to work in pine - I prefer oak.
Q: But all my furniture is in pine.
Carpenter: Nothing doing, Madam. You could try staining it to look like pine.
I've discovered that I can get work in Poland done cheaper and quicker by hiring German workers
"I've discovered that I can get work in Poland done cheaper and quicker by hiring German workers "
Slovaks, Ukranians and Belarussians already get brought in by the busload to work construction
Hopefully the new government will eliminate travel restrictions for all of Poland's eastern neighbors.
Probably due to the special foreigner prices charged here and the fact Hans is so close to the border.