Recruitment and Staffing Services

How will the Economic Downturn affect Eastern European workers?

Posted by: Richard East on 06/03/09

As the UK braces itself for a longer and deeper recession than expected, one question we are regularly being asked at RE Personnel is 'how many of your Eastern European workers are returning home?' The concern seems to be that when the economic climate improves, businesses will not be able to rely on workers from what has been the largest influx of immigration in British history.

Whitehall figures show that the number of arrivals from the 8 Eastern bloc countries which joined the EU in 2004 was 29,000 in the last 3 months of 2008, the figure was down from 53,000 in the same period in 2007, when the economy was still growing.

Approved Polish applications for the Home Office WRS fell from 36,000 to 16,000. Some experts have said that this is the mark of the end of the large numbers of arrivals from Poland. In response, I would say that this is entirely possible, but not because people from European Union are panicking about the recession and not coming to the UK, but because most of those that wanted to relocate to Britain, have already done so.

Eastern Europe has significant problems of its own. The biggest problem is its catastrophic financial system, that united badly run local banks, with loosely overseen subsidiaries of badly run western ones. During the 'boom' years, this system squandered credit from abroad, leading to huge current account deficits. As a result, many local banks have collapsed and support from the western 'father' banks has stalled, as they look to be baled out themselves.

A further problem is that exports to the west have crashed and the Eastern European countries are now seeing a fall in GDP. This fall does not look to be able to be halted by export led growth, as the whole world is a mess. Some of the European Union governments have slashed interest rates but this has had a negative impact on currencies and thus causing problems for house owners.

Furthermore, some European Union countries have major external government debts. For some, the strong Euro and weakened support from abroad spells disaster and will lead to many people being poorer and more frustrated than at any time since the collapse of the former Soviet Union.

Migrants from European Union countries have integrated into the British culture with huge success and I feel, many may now consider Britain to be their first home and are certainly not of the belief that 'the grass is greener' back east. In conclusion, I look forward to our continued partnership with our European Union workers and will strive to ensure that all remain in gainful employment going forward.

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