Wednesday, 20 July 2016

The new Blue Card proposal: Will it attract more highly skilled workers to the EU?




Jean-Baptiste Farcy, Research Assistant, Universite Catholique de Louvain

Introduction

Following the failure to adopt a horizontal Directive, proposed in 2001, on the conditions of entry and residence of third-country nationals (TCN) for the purpose of employment in the European Union (EU), EU labour migration policy is characterised by its fragmentation and sectoral approach. Given the sensitive nature of immigration policies and Member States’ attachment to their sovereignty, the only way forward was to adopt a limited number of legal instruments addressing the conditions of admission for few selected categories of economic migrants.

One of these categories is highly qualified workers. As they are deemed to be beneficial from an economic perspective, there is increasing competition among industrialised States to attract them. To that end, the European Commission proposed in 2007 to facilitate the admission of highly qualified workers and to grant them attractive residence conditions, as well as to create a common fast-track procedure. Two years later, the proposal led to the adoption of Directive 2009/50, known as the “Blue Card” Directive.

However, as discussed in the Commission’s 2014 report on the application of the Blue Card Directive, this Directive has not proven to be very effective, as shown by the limited number of permits (blue cards) delivered which is below expectations. While this may be explained by the subsistence of national schemes and the lack of publicity of the Blue Card, the conditions of entry and residence laid down in the Directive are arguably too restrictive.

For this reason, Jean-Claude Juncker declared his intention to review the Directive in order to enhance its attractiveness and overcome its intrinsic weaknesses. The Commission followed the desire of its President and the reform of the Blue Card Directive was part of the European agenda on migration of May 2015. Following four months’ public consultation on the future of the Blue Card Directive (results can be consulted here), the reform proposal was made public on 7 June 2016.

This blog post assesses the main developments included in the proposal and analyses whether it could be more effective in attracting talents and skills to Europe. First, a short review of the current Blue Card Directive is necessary to understand the extent of the proposed reform. Given the limited scope of this commentary, the 2009 Directive cannot be described at length but I will focus on its main characteristics.

It should be noted that the UK, Ireland and Denmark have opted out of the Directive. However, if the UK leaves the EU in future without any special arrangements on the movement of persons with the EU, the Directive will paradoxically become relevant to the UK nonetheless – since it would then regulate the admission of highly qualified British citizens to the remaining European Union.

The current Blue Card Directive and its limits

Although the Blue Card Directive aims at offering favourable admission and residence conditions to highly qualified workers, numerous intrinsic weaknesses have hindered its attractiveness. Labour migration being a sensitive issue, such weaknesses are to a large extent the result of Member States’ reluctance and dissension.

This is first exemplified by the determination of who qualifies for a Blue Card. According to Article 3 of the Directive, a highly qualified worker is someone who occupies a highly qualified employment, which is considered as requiring, either the successful completion of a post-secondary higher education programme lasting at least three years or, when provided by national law, at least five years of relevant professional experience. As a result, the very definition of who is a highly qualified worker is not uniform and may vary from one Member State to another.

Restrictive conditions of admission have made the Blue Card unpopular as they limit the number of potential applicants. For a Blue Card to be delivered, the TCN must have a valid work contract or a binding job offer if allowed by national law, and the prospective salary has to be at least 1.5 times the average gross national salary (meaning at least 51.466€ in Belgium). While the first condition means that a job must be secured from abroad (in-country application may be accepted in accordance with national law), the second criteria benefits large companies and senior positions.

In line with most Member States’ labour migration policy, the Blue Card Directive is based on a demand-driven entry system. As a result, it is no surprise that a TCN must have a valid work contract in order to apply for a Blue Card and the Directive does not provide for job-seeking permits. Also, the Directive allows Member States to conduct a labour market test which is a ground for refusal to deliver or renew a Blue Card during the first two years of employment (Article 8). This employer-led approach also justifies the fact that unemployment exceeding three consecutive months or occurring more than once during the period of validity of the Blue Card is a cause of withdrawal of the Blue Card (Article 13).

Furthermore, for the first two years of employment, Blue Card holders have a limited access to the labour market in the Member State concerned. Changing job is subject to prior authorisation, the new job must be highly qualified employment, and the salary condition applies (Article 12). Equal treatment with nationals, yet limited to access to highly quailed employment, may be granted after two years. As part of an approach based on the needs of Member States, the current Blue Card Directive suffers from significant shortcomings.

In contradiction with the internal (labour) market logic, the current Blue Card Directive provides for limited facilitation for intra-EU mobility, as a result of Member States’ dissension. TCN can only move to another Member State after 18 months and the Blue Card holder does not have a right to work in that second Member State. Because the TCN must apply for a Blue Card in that Member State, which may be lengthy (90 days at most), intra-EU mobility is subject to the fulfilment of the conditions imposed for first admission. For these reasons, intra-EU mobility is severely restricted even though TCN and highly qualified workers are usually more mobile compared to nationals and low-skilled workers.

While all these elements undoubtedly contribute to the unpopularity of the Blue Card, the most significant reason beyond its lack of success is the subsistence of national schemes for admitting the same category of highly qualified workers. This has resulted in parallel rules, conditions and procedures which precludes an EU-wide usage of the Blue Card system and limits its publicity. The limited success of the Blue Card does not mean that few highly qualified people have been admitted in Europe, the majority of them have been allowed under national schemes (24,922 out of 38,774 in 2014).

Even though the Blue Card Directive is an important instrument of the EU labour migration policy, it has had limited harmonisation effect because it only sets minimum standards and Member States retain a significant margin of discretion. Also, although the Directive grants a number of rights to highly qualified TCN, various restrictions are limiting the attractiveness of the Blue Card scheme, thus failing to supersede national schemes.

Now that the shortcomings of the current Directive have been exposed, let us examine how the Commission proposal intends to overcome them in order to meet the objectives that the Directive was meant to achieve.

The Commission proposal

Among the various options considered, the Commission chose to ease the admission conditions and make the Blue Card accessible to a wider group of highly skilled workers, while not extending the scope beyond highly skilled TCN. The proposal also intends to improve the rights associated with the Blue Card.

Firstly, the concept of “highly qualified employment” is replaced by that of “highly skilled employment” in order to include individuals who have completed the equivalent of a bachelor degree as well as those who have at least three years of relevant professional experience. The Commission also proposes to extend the scope of the Directive in order to include highly skilled beneficiaries of international protection. Recognised refugees already have access to the domestic labour market, but being a Blue Card holder would grant them rights associated with the Blue Card, including greater intra-EU mobility.

Secondly, the proposal clearly states that “Member States shall not issue any other permit than an EU Blue Card to third-country nationals for the purpose of highly skilled employment”. In hope to develop the Blue Card into a truly EU-wide scheme, all parallel domestic rules and procedures would be abandoned. Potential highly skilled TCN would have no choice but to apply for an EU Blue Card, if they wished to work in the EU. The EU would then have a genuinely EU-wide scheme but, as such, this would not make the EU more attractive. While this would be important in terms of visibility and clarity, it is likely to attract reluctance from Member States.

Thirdly, the salary condition would be lowered in order to be less restrictive and make the Blue Card more accessible. The salary threshold remains relative given the wide disparity among Member States and shall be in between 1.0 and 1.4 time the average gross salary in the Member State concerned. The maximum threshold would then be less than the current minimum. The proposal also provides for two exceptions for which the salary threshold shall be lower (80% of the above threshold). This would apply for professions suffering from shortage occupations as well as for young graduates.

Since the current salary condition is relatively high, the proposed threshold is likely to enhance the effectiveness of the Blue Card as it would be more inclusive. In particular, the exception in favour of young graduates, combined with the new Directive 2016/801 allowing students/researchers to stay at least nine months after the completion of their studies/research in order to seek employment (as discussed here), reinforces the attractiveness of the EU and make it easier for young graduates, who cannot claim high salaries, to apply for a Blue Card.  

Fourthly, the possibility to conduct a labour market test would be limited to exceptional circumstances such as a high level of unemployment in a given occupation or sector and justification is to be given to the Commission. As States’ oversight of the labour market is severely limited, a highly skilled TCN who meets the admission conditions, including a valid work contract, could not normally be refused access on the ground that another worker on the labour market is available. As a result, the Blue Card system would be more effective in attracting highly skilled TCN as it moves further away from a labour market adjustment rationale.  

Fifthly, labour market access would be significantly increased as the Blue Card holder is to be granted full access to highly skilled employment. The TCN would be allowed to freely change employer as long as it still qualifies as a highly skilled employment, even during the first two years of employment. However, this would not affect the possibility for Member States to withdraw or refuse to renew a Blue Card where conditions are not fulfilled, notably the salary criteria. The proposal also allows Blue Card holders to engage in self-employed activity, yet in parallel only. Since this goes towards more autonomy for TCN and greater equality with nationals, the attractiveness of the Blue Card is likely to be enhanced. 

Sixthly, Blue Card holders would benefit from facilitated access to the long-term resident status. If adopted as proposed, the new Blue Card Directive would derogate from Directive 2003/109 by granting long-term resident status after three years (not five) of legal and continuous residence within the territory of the Member States concerned. However, if the TCN becomes unemployed and does not have sufficient resources to maintain him/herself, the long-term resident status may be withdrawn before the usual five years’ time-limit is reached. Again, this is welcome as it enhances the TCN’s prospects of integration, which may be an important consideration when deciding on a country of destination.

Finally, the proposal wishes to reinforce the attractiveness of the EU by facilitating intra-EU mobility, in line with the desire to make the Blue Card a genuinely EU-wide scheme. The minimum residence period required before a Blue Card holder can move to another Member States is thus shortened to 12 months. While the TCN still needs to apply for a Blue Card in that second Member State, he or she would be allowed to work immediately after submitting an application (this would no longer be a possibility to be defined by national law). Also, Member States’ discretion is limited. Most notably, a labour market test would only be allowed if also in place for first entry applications, and no quotas would be allowed, contrary to the current situation.

Indeed, Member States’ right under Article 79(5) TFEU to determine the volumes of TCNs coming for the purpose of work is limited to TCNs coming directly from third-countries and does not apply in case of intra-EU mobility. As a result, intra-EU mobility would clearly be enhanced and TCNs would enjoy facilitated access to the labour market of other Member States. While this reinforces the impression that there is a single EU labour market, which is far from true, it remains to be seen whether highly skilled TCN actually move across the EU. Since the vast majority (around 90%) of Blue Cards are currently delivered by one Member State (Germany), figures on the mobility of highly qualified TCN is difficult to obtain.

Comment

Concerned about the underperformance of the Blue Card system launched in 2009, the Commission proposed a complete overhaul of this flagship policy in order to catch up in the competition among industrialised states to attract highly workers.

Overall, for the reasons explained above, the proposal appears to be relatively ambitious. Less restrictive admission criteria would make the Blue Card more inclusive and Member States’ leeway would be reduced, thus furthering harmonisation. Also, the limited possibility to undertake a labour market test means that labour migration is to be more than a labour market adjustment channel.

The system remains demand-driven, as potential candidates still need a work contract, but highly skilled labour is also praised as a source of human capital. This is illustrated by the fact that the nature of labour migration is meant to be less temporary than in the past. The Commission proposal intends to give Blue Card holders facilitated and quicker access to the long-term residence status. While this is arguably an element of attraction for potential migrants, this may be linked to long-term population objectives given Europe’s demographic trends and needs for human capital.

Despite these positive elements, the Commission proposal may prove too ambitious for Member States to approve, yet insufficient to effectively attract a significant number of highly skilled workers to the EU.

Although the Blue Card Directive needed to be reformed given its limited added value, the Commission proposal is arguably untimely. As we have witnessed with the current asylum crisis, there is increasing political resistance to developing common European rules related to migration, particularly when such rules imply a loss of sovereignty and control over entry rules. The Commission high level of ambition is therefore likely to attract resistance, especially since national schemes for highly skilled workers would no longer be allowed. As a result, the legislative process may prove to be long and difficult, despite the increasing recognition that skilled labour migration is beneficial to economic competitiveness.

Unlike countries such as Canada or Australia, the EU Member States do not face a high number of applications. The goal of the Commission is therefore to increase the attractiveness of the EU through migration policy. While a harmonised EU-wide scheme would enhance clarity and predictability for the benefit of both employers and potential candidates, the Blue Card system is only one element of attraction among others. As the public consultation tells us, the quality of life (including welfare and health care systems, wages, safety and the environment) makes the EU attractive, yet difficulties of getting a permit and the lack of integration perspective (openness to immigration, language, integration assistance,…) are unappealing factors.

The Commission proposal would arguably ease the issuance of a permit as the Blue Card would be accessible to a wider group of highly skilled workers, including young graduates. However, it is doubtful whether the goal of attracting more skilled labour to the EU would be met (the estimate of the Commission that at least 32,000 additional permits would be delivered under the new scheme seems quite optimistic). For instance, the liberal Swedish immigration system has not resulted in a sharp increase in the number of highly skilled workers. Therefore, while the Commission proposal is more inclusive than the current Directive, it is uncertain whether the goal of attracting more skilled labour would be reached without accompanying policies.

Barnard & Peers: chapter 26
JHA4: chapter I:6

Photo credit: www.shell.com

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