Q Analyse the difficulties faced by European Union due to large immigration from new members.

The EU enlargement leads to labour migration between the new and old member states, meaning that the freedoms of movement enabled them to migrate within the Union. In May 2004, fourteen years after the fall of the Communist bloc, nine CEE countries (Central and Eastern European Countries) and Malta fulfilled the Unions membership criteria, the so-called Copenhagen criteria and became new member states. Many of the old member states faced demographic and economic problems, which created several gaps in the labour market. First, welfare systems with charitable unemployment benefits made some people prefer being unemployment and reluctant to look for job opportunities. Consequently, high unemployment benefits were combined with high unemployment rates. Second, the old member states faced low economic growth (1.0%-3.8%) and an ageing population which would increase public spending on pensions, healthcare, and long-term care by 4% to 8% of GDP in most of the EUs 25 states by 2050. In comparison to the old member states the new ones additionally faced even higher unemployment rates (19%) and lower wages. As the wage rates in the old EU countries were comparatively rigid, there were apprehensions that the incoming migrants could have the effect of driving the locals from their jobs and into unemployment, leading to higher government expenditure on unemployment benefits. It was also feared that the immigrants themselves might eventually claim unemployment benefits, further draining government resources. Consequently, less money can be directly invested in the economy and economic growth rates cannot be improved. Whereas most countries restricted this migration by setting 7 year moratoriums for labor migration, a 2-year freeze or set quotas, Ireland, Sweden, and UK did not set restrictions. They rather set conditions on social security, welfare shopping and reservations on their right to refuse a work permit. As a result, they had higher growth rates than the other member states. It is believed that many of the older EU members will eventually have to take in an increasing number of immigrants to offset the growing number of vacancies in their labor markets caused by ageing populations and exacerbated by the declining fertility rates in Europe. A large number of elderly people will mean that relatively smaller workers will have to pay higher taxes to finance the state pension systems.