Monthly Archives: February 2015

Added value of migration and the freedom of movement

Like many other successful companies, we have quite an international team at Europa Media. Certainly, most are Hungarian, but there are also employees from Germany, Italy, Turkey and Ukraine.

Diversity at Europa Media

An international environment at the company yields obvious cultural benefits such as swapping language knowledge, exchanging traditions and customs and frequently tasting culinary delights i.e. delicious dark chocolates from Ukraine, tiramisu prepared in true Italian style, famous Ritter-sport chocolate bars from Germany and special Turkish desserts.

At the same time, a multinational surrounding brings not only cultural diversity but a diversity of opinions and ideas as well, coupled with increased innovation capacities. During our brainstorming sessions, Europa Media colleagues often have various innovative ideas for projects, comparing certain achievements in their countries and adjusting them to the existing frameworks in other countries. Moreover, our international networking outreach has grown stronger due to the previous work experience of EM’s colleagues from abroad. Knowledge of legal, social and economic conditions in those countries and suggestions for potential partners during proposal development bring added value to EM’s activities.

Immigration issue on the populists’ agenda

Therefore, a friendly atmosphere and productive work at Europa Media disproves the concerns of certain populist politicians across EU Member States[1][2][3][4][5][6]about migration being a threat to receiving EU countries. Countless declarations that immigrants somehow endanger the EU’s economic development, employment and wage rates in individual state, that they abuse welfare systems in the EU or pose a threat to Europe’s security and healthcare system are present in the rhetoric of many political parties across Europe. This fuels negative, sometimes even discriminatory and xenophobic attitudes.

Perceptions by the local population largely stem from the confusion between migrant categories which politicians tend to create in their statements, particularly when failing to cope with economic issues in the country[7]. Moreover, the danger of labeling people based on their country of origin results in the negative spillover effect, when highly skilled workers are forced to take up menial jobs (as their education or credentials are not recognized in the receiving country) instead of making full use of their creative potential.

Types of immigrants

In order to avoid confusion and increase understanding there should be a clear differentiation among types of immigrants:

Economic (labour) migrants

Labour migration presupposes moving to another country for the purpose of employment[8]. We can differentiate between low-skilled labour migrants (who usually fill in the labour market gaps in receiving countries, as the native labour force is reluctant to take up such jobs) and highly-skilled migrants who are usually well-educated and experienced and seek to improve their economic conditions.

Temporary/seasonal workers

Seasonal migration usually involves workers (periodically) going to another country to perform a certain type of work for a fixed period of time; they later return to their home countries.

Migrants coming for the purpose of family reunification, studies, volunteering, retirement.

People migrating for other reasons than employment.

Asylum seekers and refugees

People who are (supposedly) endangered in their countries and are seeking asylum abroad. Once the receiving country grants them stay on its territory, they obtain the status of the refugees, which can also imply certain limitations for future employment.

Second generation of migrants

This category includes workers, born in the receiving country to immigrant parent(s). Typically they should have the same social and employment rights, as native citizens; however, the practice varies depending on the migrant integration laws in different countries.

Illegal immigrants

Illegal migration means either illegal border crossing or stay on the territory of another country without necessary permission. Illegal immigrants are usually the public opinion’s scapegoats in the case of poor economic performance and high unemployment rates. Other categories of migrants (even those with necessary work permits) are usually lumped together in media coverage of illegal migration as a threat to the country.

The right to freedom of movement within EU

While EC underlines that freedom of movement is the “fundamental principle of the Treaty enshrined in Article 45 of the Treaty on the Functioning of the European Union and developed by EU secondary legislation and the Case law of the Court of Justice”[9], many EU citizens, as well as third country nationals, face difficulties on the EU labour market due to various restrictions introduced by individual Member States (e.g. transitional arrangements for Bulgarian and Romanian citizens, cumbersome procedures of obtaining work and residence permits for non-EU employees, etc.)

Empirical data on the impact of immigration in EU Member States

When analyzing countries’ viewpoint on migration, it is important to operate the data concerning the share of immigrants in that particular country. For example, it is quite interesting to compare the rise of the anti-immigrant rhetoric in Hungary and Sweden. These two countries are comparable in terms of population size (more than 9 million) and GDP growth in last quarter of 2013 (1.3-1.5%[10]). Curiously, we can see from the Table 1 that the share of migrants in these two countries is quite different: with as little as 3% of immigrants, Hungary is already known for its official anti-immigrant declaration, while in Sweden, with its more than 10% immigrant share, anti-immigration sentiments are also rising, being manifested in increased support for a particular party[11].

Moreover, a peculiar comparison in terms of the share of immigrants and foreign-born population can be made for Italy and France. For example, while populist parties in both countries contribute to the image of these countries as “flooded” with immigrants, we can see that the immigrant share is about 5-6% in both countries (Table 1), and the total share of non-national and foreign-born population is much higher: 17.7% in France and 16.9% in Italy (Table 2). It can be concluded that such an anti-immigrant agenda is speculative and discriminatory at its core as it mostly covers citizens of foreign origin, who should have equal rights as the native population.

Table 1. Share of immigrants (per 1000 inhabitants), 2012, Eurostat

 

 Table 2. Share of non-national and foreign born population, 2013, Eurostat

 Benefits of immigration for the EU

Research proves that concerns about the negative effects of immigration are mostly groundless. For instance, several recent reports[12][13][14] found that migration:

  • Has a mostly positive impact in the receiving country on the earning distribution;
  • Contributes to improved efficiency in the labor market;
  • Results in “better flow of ideas, knowledge and technology, goods and services, as well as capital”;
  • Has positive effects on public finance, EU’s GDP, GDP per capita or employment;
  • Leads to increased diversity of the labour force;
  • Is a “vehicle for labour market adjustment”
  • Does not lead to welfare abuse, as for may migrants access to welfare and social support scheme is complicated.

Nowadays, the globalized economy and international cooperation promote open access to employment and an open attitude towards a foreign-born labour force. You never know – it may be your colleagues from abroad with whom you will form the strongest research or project management team in your organization.


[12] Skilled Labor Flows:  Lessons from the European Union Report under the World Bank ASEAN Labor Markets program  funded by AusAid

http://www.iza.org/en/webcontent/publications/reports/report_pdfs/iza_report_49.pdf

[14] Does Immigration Grease the Wheels of European Labour Markets?KING Project –Economics Unit

http://king.ismu.org/wp-content/uploads/GuziKahanecMytnaKurekovaLevandovska_DeskResearchInDepthStudy18.pdf

Mobility matters

That the title of this post has a certain truth in it is undisputable. Flexibility has always been a high good, not only because of our daily commute and work related trips, but also for all of our private movements. The ability to participate online in an event, even in our daily work (i.e. telecommuting), saves us a lot of travelling, but in spite of this, the necessity to travel in person will always be there.

Are we (stuck in) the traffic?

There are a few major modes of transport available for our everyday choice to accomplish a trip between A and B. However, one thing is common whether people drive a car, use public transportation, make their way by bicycle or simply walk: A certain dissatisfaction by people using those modes is always noticeable. You might recall such situations when you got stuck in the traffic jam with your car or an unabashed biker nearly hit you, the pedestrian, while both of you used the shared (walk – cycle) pathway. Many of those dissatisfactions are justified by circumstances and some are even justified by scientific evidence. The author of this blog post takes a closer look on the space which is given to different modes of transport in three international cities.

What can ‘sustainability’ bring?

Sustainable mobility is one of the important pillars in Horizon 2020, the EU Research and Innovation Framework Programme in 2014-2020. Other funds like EUREKA clusters, Joint Programming Initiatives (JPI) and Connecting Europe Facility (CEF) are also available to boost sustainable transport all over Europe. But some of you might have actually wondered what the practical value of past and present sustainable mobility projects is and if it really changed conditions for us as the recipients!

The sector of cycling certainly takes only a small portion within the entire sustainable mobility range. Yet, it is a very popular element when it comes to changing conditions and making (urban) passenger transport more sustainable. Many projects have been implemented and efforts have been taken in Europe and all around the world by local authorities, private institutions and voluntary associations to improve cycling conditions and engage people in cycling. Below you will find two examples among a multitude of past and present projects in the sector:

  • The EU project Catch MR which was undertaken back in 2012 has led to significant improvements regarding the cycling infrastructure in and around the city of Budapest.
  • Active sustainable mobility policies from the city of Koprivnica under the EU CIVITAS initiative has yield great support of the local society for cycling and walking.

Designed for all of us

Now it’s our turn to respond to such kinds of projects and share those endeavours. I am sure that if we look around in our village, town or city we will find (at least sections of) suitable cycling paths and/or infrastructure. Why not considering such sections for a bicycle ride and trying to integrate them into one of our trips? Cycling is not only beneficial for a more pleasant and liveable environment but it brings about very attractive health benefits as well.

by Daniel Frohnmaier

A new Investment Plan for Europe – at the expense of Research and Innovation?

He has been on board for three months only, but has already managed to attract attention, doubts and criticisms. I am referring to Jean-Claude Juncker, and his plan to create a new European Fund for Strategic Investments (EFSI).

A plan to trigger a “Virtuous Triangle”, so he claims: investment, fiscal responsibility and structural reforms, to bring European countries back on the track of economic recovery. Since the global financial and economic crisis, the EU has suffered from low levels of investment (a 15% decrease in 2014 with respect to 2007 figures, amounting to about €430 billion). This has led to a weak recovery from the crisis, especially in the Eurozone[1], and may further result in a fall in GDP and an overall decrease of growth and competitiveness.

The starting point for Juncker’s plan is the low investor confidence, due to the uncertainty of economic and political contexts and to the indebtedness in parts of the EU economy. This means that the riskier a project is in financial terms, the less likely it is to be funded, thus creating a vicious circle.

Convinced that “producing money” or creating debt will not fix the problem (wait, but isn’t this what the EBC has just done through its decision on Quantitative Easing?), the Commission has decided to focus on three pillars:

  • Mobilising sources of investment finance to deliver at least €315 billion of additional investment over the next three years;
  • Making sure this extra finance contributes to growth in ways that are adapted to each sector and geography;
  • Measures to improve the investment environment in Europe and thereby trigger knock-on effects.

Juncker’s plan inserts itself into the first pillar. Well, actually it’s not €315 billion for real.

The plan provides for the collection of €21 billion, which will target specific high risk projects in sectors such as infrastructure, transport, innovation and research and development. These investments, the plan articulates, will create up to €315 billion over the next three years, through activities such as long-term senior debt for higher risk projects, subordinated loans or equity and quasi-equity products, and products for SMEs, such as venture capital, securitisation, growth finance or guarantees.

It all makes a lot of sense.

However, three points remain unclear:

  1. Competition
  2. Attractiveness to investors
  3. Source of the money

First of all, let’s talk about the competition of proposals: Horizon 2020 envisages a transparent, competitive procedure which is clearly explained in its rules. Evaluators are independent individuals: any expert in project management can apply to become one, and the whole system ensures that it is really the best proposal to win the competition and obtain funding. How are projects going to be selected by the Investment Plan? Is there going to be a public, transparent procedure? The Commission has already published a list of around 2,000 projects that could be implemented over the next three years, simply describing them as “viable projects, with a real added value for the European social market economy”.

But what does this mean – exactly?

The listed projects were “identified in a report to the European Council … [which] was made by a task force set up by the European Commission and the European Investment Bank, together with EU Member States”[2]. That’s all we get to know!

Secondly, can we confidently foresee that the EU-fundraised €21 billion will almost automatically, and within the timeframe of three years, produce “up to” €315 billion?

Guardian journalist Simon Jenkins also doubted Juncker’s plan: “Who will invest when there is no demand? … Ever since the credit crunch the continent has been suffering what Keynes called a classic liquidity trap. There is too little money around and thus a chronic shortage of demand. People have too little to spend, which means shops close, supplies dry up and no one invests.”[3]

Industry chiefs have also questioned the plan: Rodolfo de Benedetti, CIR chairman, defined the €21 billion as “peanuts”, related to Europe’s gross domestic product. Benoît Potier, chairman and chief executive of Air Liquide, was concerned that “what matters is where [the priorities] are going to be”. Volvo’s chief executive in Sweden, Olof Persson, even stated that his company “would be unlikely to co-invest alongside the proposed EU funds, because these are likely to be directed to infrastructure projects”[4].

Some critical voices have already advanced this argument. For example, Guntram Wolff, director of the Economics think tank Bruegel, wondered: “What can you do with €21 billion in an economy that amounts to over €12 trillion or more? [Juncker]’s trying to do a miracle with very little … The plan is likely to bolster projects that would have happened anyway in this short time frame, enabling investors to make higher profits instead of attracting actual new investment … To finance the scheme, it would be wiser to tap into other parts of the EU budget, such as funds for agriculture or regional development, instead of Horizon 2020.”[5]

And here we get to the third point, the most relevant point for the Europa Media team and project manager colleagues: where is this money coming from?

Well, next to funds from the European Investment Bank and single Member States (who have not yet declared their availability or the quantity of money they would provide), €2.7 billion would arrive from Horizon 2020.

The Commission’s legislative proposal[6] specifically suggests reducing “the available envelopes of the Horizon 2020”; this should also ensure a greater investment in certain areas of the two programmes respective mandates than is currently possible. More specifically, “the EFSI should be able to leverage the EU guarantee to multiply the financial effect within those areas of research, development and innovation and transport, telecommunications and energy infrastructure compared to if the resources had been spent via grants within the planned Horizon 2020 and Connecting Europe Facility programmes. It is, therefore, appropriate to redirect part of the funding presently envisaged for those programmes to the benefit of EFSI”.

Article 18 gives more details about the proposed amendments:

  • The financial envelope for the implementation of Horizon 2020 is set at €74.328,3 million in current prices (instead of €77.028,3 million[7])
  • This amount shall be so distributed among the priorities:
    • Excellent science, €23.897,0 million in current prices (instead of €24.441,1)
    • Industrial leadership, €16.430,5 million in current prices (instead of €17.015,5)
    • Societal challenges, €28.560,7 million in current prices (instead of €29.679)
  • Also, the following actions will have a cut in budget:
    • Spreading excellence and widening participation, €782,3 million (instead of €816,5)
    • Science with and for society, €443,8 (instead of €462,2)
    • Non-nuclear direct actions of the JRC, €1.852,6 (instead of €1.902,6)
  • The EIT shall be financed through a maximum contribution from Horizon 2020 of €2.361,4 million in current prices (instead of €2.711,4)[8].

A total of €2.700 million is therefore cut just from Horizon 2020.

So, dear friends, project managers, academics and practitioners who are striving to produce quality proposals in this (already) highly competitive Framework Programme: be ready to struggle even more!

As the League of European Research Universities affirmed: “Horizon 2020 is not a lemon! Stop squeezing it!”[9]


[1] European Commission, Factsheet 1: “Why does the EU need an Investment Plan?” Retrieved at: http://ec.europa.eu/priorities/jobs-growth-investment/plan/docs/factsheet1-why_en.pdf

[2] European Commission, “Investment Plan. What to invest in?” Retrieved at: http://ec.europa.eu/priorities/jobs-growth-investment/plan/what/index_en.htm

[3]Simon Jenkins, “We should cash-bomb the people – not the banks”, 26 November 2014, The Guardian. Retrieved at: http://www.theguardian.com/commentisfree/2014/nov/26/eu-cash-bomb-recession-juncker-new-fund

[4] Sarah Gordon, “Industry chiefs question Juncker investment plan”, 4 December 2014, The Financial Times. Retrieved at: http://www.ft.com/intl/cms/s/0/1423a226-7bc1-11e4-b6ab-00144feabdc0.html?siteedition=uk#axzz3QCLFV1WT

[5]Tania Rabesandratana, “E.U. Commission wants to divert Horizon 2020 into new Investment Fund”, 27 November 2014, Science Magazine. Retrieved at: http://news.sciencemag.org/europe/2014/11/e-u-commission-wants-divert-horizon-2020-money-new-investment-fund

[6] Proposal for a Regulation of the European Parliament and of the Council on the European Fund for Strategic Investments and amending Regulations No 1291/2013 and No 1316/2013. Retrieved at: http://ec.europa.eu/priorities/jobs-growth-investment/plan/docs/proposal_regulation_efsi_en.pdf

[7] Regulation No. 1291/2013 of the European Parliament and of the Council establishing Horizon 2020, 11 December 2013. Retrieved at: http://inea.ec.europa.eu/download/legal_framework/regulation_12912013_establishing_h2020.pdf

[8] Proposal for a Regulation of the European Parliament and of the Council on the European Fund for Strategic Investments and amending Regulations No 1291/2013 and No 1316/2013. Retrieved at: http://ec.europa.eu/priorities/jobs-growth-investment/plan/docs/proposal_regulation_efsi_en.pdf

[9] League of European Research Universities (LERU), “Horizon 2020 is not a lemon! Stop squeezing it!” Press Release, 26 November 2014. Retrieved at: www.leru.org/index.php/public/news/horizon-2020-is-not-a-lemon-stop-squeezing-it/