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Britain Debates Key Globalization Puzzle

Thursday, 4 Jan 2007 | 3:26 AM ET

Headlines ahead of the New Year portrayed a country of job seeking-Britons brushed aside by Bulgarians and overrun by Romanians.

"See EU soon," wrote the Sun. "You can't stop us coming," portended the Daily Mail - two newspapers that have made fretting about immigration and its effect on Britain a mission.

While the prospect of masses of Romanians and Bulgarians storming the shores of Britain on Jan. 1 was unlikely, as veteran EU members have not fully opened their labor markets to the newcomers, such worries stem from events of the past few years.

After the last EU expansion in 2004, when Poland and nine other nations joined, Britain was one of a handful of EU nations that opened its doors - and saw a flood of more than half a million newcomers taking jobs as builders, food servers and clerks in London and across the country - confounding official reassurances.

Should countries like Britain want hundreds of thousands of Polish migrants? Many economists say yes, because they make labor markets more efficient and create economic growth. But workers - and politicians - see competitors who keep salaries low.

The British fears about potential Romanian and Bulgarian emigres is part of a wider debate about globalization: Is economic freedom ultimately to everyone's benefit?

The tumult in Britain was stoked Wednesday by a report by a conservative think tank claiming immigration is of almost negligible benefit to the average citizen. And while critics argued that the report by MigrationWatch lacked empirical heft, this failed to quell the debate.

"Immigration can be a real benefit to the country, but only if it is properly controlled," said David Davis, the shadow home secretary for the Conservatives.

The report from Migrationwatch said the financial benefits of immigrants amounted to less than a few pence.

"Of course many immigrants make a useful contribution to the economy but taken in total the economic benefit is at best marginal," said the group's chairman Sir Andrew Green. "The main beneficiaries are the immigrants themselves who are able to send home about 10 million pounds ($19.5 million) a day, not the host nation."

At the heart of the matter are major questions about how Western Europe - with an aging population, social protections and high wages - can compete, not only with Asia but with is eastern neighbors that have become part of the EU.

"Migrant workers fill an important gap in the U.K.'s growing labor market," said Brendan Barber, general secretary of the Trades Union Congress, Britain's biggest labor group. Barber added that EU citizens from outside Britain have helped increase growth and fill the jobs that Britons won't take.

Whereas threats to the British economy used to come from illegal immigrants, with most EU residents free to go anywhere in the bloc new members like Romania and Bulgaria are easy targets.

"Migrants to the U.K. bring valuable skills and ideas with them and help to fill job vacancies where Britons are unable or unwilling to do so. Their taxes help pay for our public services and our pensions, long after many migrants have returned home," said Susan Anderson, who oversees human resource policies at the Confederation of Business and Industry. "Their presence also helps keep inflation low at a time when there are many forces pushing the other way."

Anderson called Migrationwatch's report an attempt to "score a few cheap political points."

Experts say immigration can help a nation's economy.

"Most economists around the world have concluded that immigration has a positive impact but it's very small," said Martin Ruhs, an economist at migration think tank Compass. "It would be untrue to say that there are massive gains to be made."

For those already in Britain, the perception that legal foreigners were taking jobs stings, but isn't always true.

"Of course, any country would be unhappy, they think we take their jobs, and we work cheap," said Ovidiu Sarpe, a 59-year-old Romanian who came to Britain in 1987 as a refugee and now owns a restaurant. "(But) in the back of their minds they know that we have a positive impact on the British market."

Romanian Foreign Minister Mihai Razvan Ungureanu said Spain and Italy - countries whose languages are fairly close to Romanian - are the preferred destinations, he said, adding that of the 1.5 million Romanians that have gone abroad for work, just 35,000 to 40,000 have headed to Britain.

In Bulgaria, there's been no exodus of job seekers abroad even though about 35,000 Bulgarians are willing to emigrate to other EU countries, but only a quarter of them plan to do so within a year, according to a Gallup research on emigration attitudes. The August survey of 2,500 people nationwide had a margin of error plus or minus 4.5 percentage points.

Most of the potential emigrants eye Germany and Spain, with Britain ranking third in their preferences.

"I'm a qualified nurse, and I heard that Britain needs nurses and I applied for a job there," said Marina Yurukova, 33, of Sofia.

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