Of the problem of the free movement of labour in the EU

Work in small groups.

Factor Market Integration

In terms of the stages of economic integration, the European Union has progressed beyond

The stage of a Customs Union. The Treaty of Rome (1957) called for the free movement of not

Only goods and services but also of the factors of production (labour, business capital and enterprise).

The abolition of exchange controls, the Single European Act (SEA) and the movement

Towards Economic and Monetary Union (EMU) have all helped to create some of the conditions

For the free movement of capital and enterprise. The different ways in which national governments

Treat taxes on savings means that genuine free movement does not really exist, yet

Much more progress has been made on the free movement of financial capital than on the free

Movement of labour.

Up until the Single European Act, limited steps had been taken to ensure that labour was

Freely mobile between member states. A number of important barriers to the free movement of

Labour in Europe continue to exist. Indeed, it makes little sense to talk about a European labour

Market. There are big differences in unemployment rates between member states. If labour were

Truly mobile, such differences would be reduced over time. Negative integration, then, has done