The impact of the freedom of movement on the tourism industry, in the event of Malta joining the EU

Abstract

The free movement of workers has been a long and continuous process that keeps evolving. However, there are many disputes as to the beginning of the free movement of workers. Some argue that the freedom of movement came into existence in 1957, while others indicate, that despite the concept being mentioned in 1957 it was not practised until 1968 and therefore did not exist prior to this date. As the European Union experienced a shift, in recent years, from an economic union to a more socially invigorated union, the issue of social policy has gained in importance. Thus, so has the concept of free movement. With this in mind, the scope of this dissertation is to analyse the possible impact of the free movement of labour on the Maltese tourism industry, in light of the prospective membership to the European Union. This question is of the utmost importance to the Maltese citizens, since the issue of membership is a very controversial subject on the island at present, due to the prospect of possible membership in 2004. Further to this, the tourism industry is extremely significant to Malta and its economy, contributing around 30% of the national Gross Domestic Product (GDP). Therefore, the possible impact of EU membership on this industry must be carefully considered, due to its sheer importance on the Maltese economy, before taking a decision on the issue of Malta entering the EU. Tourism is the largest industrial sector in the European economy, as is the case in Malta. The industry, both in Malta and the EU, is highly dependent on the availability and flexibility of labour. This emphasises the importance of the free movement of labour, enabling workers from all the EU member states to work in any EU country, as if the worker was a national of that state. Thus, the worker and family, are entitled to all the benefits granted to nationals, and cannot be discriminated against on the grounds of nationality. It was perceived that through the enhancement of the free movement of workers, unemployment could be reduced, since workers could move from areas of low employment to areas of high opportunities for employment. However, much is still left to be desired with only an estimated 1.5% of the Community workers moving between the member states. Consequently, the low percentage of mobility is not that surprising owing to the many linguistic, cultural and administrative barriers that still exist today. Despite the low percentage of mobile workers, one of the biggest fears faced by Maltese citizens when considering membership is the question of a potential invasion of foreign workers taking jobs away from the Maltese nationals, and ending up in control of the Maltese economy. Such fears are held on the grounds of the small size of the island and the fact that the highest percentage of mobility recorded is made up of temporary workers. Temporary workers are highly requested in the tourism industry, thus causing concern for the Maltese islands. It is through such analysis that the full benefits of membership are noted. The tourism industry propels the service sector in Malta, and the fact that around half of the Maltese population are connected, directly or indirectly, to the sector proves the vital necessity of protecting the industry. Thus, the potential impact of EU membership on the island will be discussed, and the negotiations carried out between the Maltese national authorities and the EU, and the possible outcome, in the event of membership will be investigated. This dissertation has been divided into two parts. Part one dealing with the Legal basis of the free movement of workers, the mutual recognition of qualifications, and social security. The second part takes the Maltese situation and compares it to other member states, and the impact the free movement of workers had on them. Part two also analyses the effect of EU membership on Malta and the possible effects on the tourism industry. In conclusion, the predicted, potential effect has been drawn from the situations discussed and the results of questionnaires conducted while researching the subject. Both the concept of free movement and the tourism industry are crucial to Malta, facing EU enlargement and thus, need to be clearly defined so as to enhance the prospects the small, but strategically important island in the centre of the Mediterranean, has in the hope of furthering it's potential.