'Brussels consensus' widens gulf with EU electorates

MIGRATION ISSUES

Britain has just announced plans to restrict the welfare rights of migrants from poor EU newcomers Romania and Bulgaria, who will be able to work freely throughout the EU from January after a seven-year transition period expires.

Eurosceptical politicians and media drove Prime Minister David Cameron to respond by waging a campaign against alleged "benefit tourism" by poor east European migrants, even though official figures show migrant workers pay more into the British welfare system than they take out, and make up proportionately far fewer claimants than British nationals do.

France and several other states are fighting to curb abuses of another EU rule that allows workers posted on temporary assignment from other member states to pay social charges at home rather than in their host country.

Companies in countries such as France, Germany, Denmark and Belgium use this system to sub-contract lower-cost labor from eastern Europe, notably in the construction sector, doing some higher-cost local workers out of a job.

To supporters of the Brussels Consensus, this is simply the operation of the European single market bringing economic efficiency to overtaxed countries.

Rehn said countries such as France, Italy and his native Finland face deeper problems of cost competitiveness, which explain in part why they keep losing world market share.

While each national debate is self-contained, there is a strong prospect that parties hostile to the Brussels Consensus will between them draw perhaps one in five voters on a low turnout in the European Parliament elections.

Whether that jolt will be enough to change the prevailing wisdom among European policymakers remains to be seen.

It took two decades, and the shock of the Asian financial crisis, to change the Washington Consensus. The IMF now accepts a bigger economic regulatory role for the state, temporary capital controls and other ideas that were once heresy.

Some EU insiders believe a modified Brussels Consensus may emerge from next year's elections and the change of leaders of EU institutions that will follow.

The new consensus may be a bit more socially conscious and a bit less market-driven, reflecting the left-right coalition of conservatives and Social Democrats set to take power in Germany. But it is unlikely to placate the sceptics.