Infographic: BIRN

Some of these countries are both importers and exporters of workers. They rely on cheaper workers from Ukraine or the Balkans to fill lower-skilled jobs, often to replace their own citizens who have sought more lucrative jobs in Western Europe – mostly Germany, the United Kingdom or the Netherlands.

Anto Domazet, a professor at the School of Economics and Business at Sarajevo University, says that foreign workers in the EU have been hardest hit by the pandemic, since they were usually the first ones to lose their jobs or have their salaries cut. This, in turn, is affecting living standards across Southeast Europe.

While all the countries in the region face similar restrictions on labour mobility, most governments still don’t know the scale of the problem, because of the oscillations in the intensity of the coronavirus pandemic over recent months, the constant changes to the security and travel situation, as well as the usual delays in compiling statistical data.

And it is even more difficult to predict how this situation will develop over the coming months, experts and officials say. “Things are changing by the day and it is impossible right now to figure out what will happen,” an official from Romania’s Labour Ministry told BIRN, speaking on condition of anonymity.

Impeded labour mobility has least effect on better-off countries

Seasonal workers harvest tobacco at Fejerto Cooperative in Ofeherto, Hungary, 16 September 2020. Photo: EPA-EFE/ATTILA BALAZS

So far, the coronavirus pandemic has had the least impact on those countries that were better developed and/or less dependent on a foreign labour force, such as the Czech Republic or Hungary. Yet even that could change if the pandemic continues spreading uncontrollably in 2021.

Latest data from the Czech Labour Office shows the number of foreign workers falling by just 7 per cent – or some 42,000 – during the country’s first lockdown that began in the spring. Those workers were forced to return home, mostly to Ukraine. The country is a traditional target market for Ukrainians, whose community now numbers well over 100,000, according to the NGO Caritas.

Migration statistics show that in the Czech Republic the size of the foreign labour force has increased significantly over the last decade. Data from the statistics office (CZSO) shows that 715,651 foreigners were employed in Czechia in 2019, more than double the number in 2011 or in 2007, the peak of the boom before the global financial crisis struck.

“There haven’t been any major changes in terms of the number of migrant workers in Czechia,” Klara Boumova from Caritas told BIRN. “However, the conditions they work under have deteriorated. Employers know foreign workers are the most vulnerable to losing their jobs and so take advantage.”

Even so, analysts expect the number of migrant workers in the Czech Republic, including those from the Western Balkans, to fall if the COVID-19 crisis persists. The risk of economic slowdown and unemployment is clear, even if conditions remain stable for the meantime. The Czech Republic is now widely recognised as having the worst rate of infection in Europe, and that will put off migrant workers travelling to the country, further depressing the vital tourism industry and delaying the wider economic recovery.

Jobs in the service industries are especially exposed, with the tourism sector still on its knees as the second wave of the pandemic sweeps through the country. On October 14, the Czech government ordered bars and restaurants to close again and, four weeks on, they look no nearer to reopening.

“We expect migrant labour flows to drop, especially in services, where many foreigners traditionally work,” said Boumova. “We also expect many already here will begin heading home soon.”

Despite the Hungarian government’s harsh rhetoric against migration, the number of guest workers has also been rapidly growing there over the last three years, reaching 70,000. That rising trend was broken only briefly in the spring when the pandemic struck.

“We are still experiencing a shortage of the workforce in the construction sectors, which is filled by guest workers, usually from Ukraine or Serbia,” Gyula Pallagi, leader of the country’s construction union, told BIRN.

Pallagi says that even during the first wave of the pandemic, Hungary’s construction sector was not completely shut down, although border closures slowed the inflow of foreign workers. But the shortage was largely offset by Hungarian workers returning from Western European countries.

During the summer, the situation normalised: Hungarians began leaving again for Austria or Germany, their places taken by guest workers from further east and the south, although travel restrictions and border controls are making such movements more complicated.

Other than in construction, demand for guest workers is low in Hungary. In manufacturing, the automotive industry and tourism, even Hungarians have been laid off, Eva Toth, a trade unionist for the chemical industry, told BIRN. “There is no demand for foreign workers at the moment.”

Labour flows reverse in Croatia and Bulgaria

An empty beach at Island Mali Losinj, Croatia, 11 May 2020. Photo: EPA-EFE/DOMINIK BAT

Despite the pandemic, Croatia has remained relatively open to foreign labourers, on whom it has increasingly depended in recent years, especially in construction, agriculture and tourism.

The branch of the Croatian Employers’ Association that specialises in the construction industry told BIRN that the pandemic has not caused any major disruptions in labour flows. However, it also noted that epidemiological measures and travel restrictions have had an impact on the organisation of work and “rotation of teams”, thus weakening working performance, breaching deadlines and increasing labour costs.

On the other hand, many Croatian citizens who had in recent years migrated to Germany or other Western European countries have lost their jobs due to the pandemic and been forced to return to their homeland, a study published in May by Zagreb’s Institute for Migration and Ethnic Studies found.

The study, “Pandemic and Migration”, concluded that these returning workers “should not be seen as the end of the migration process, but as one of its phases”, because many Croatian citizens will likely use some other opportunity to move westwards, as long as they can obtain better living standards and/or boost their family income by doing so.

Bulgaria also saw more than 200,000 of its citizens, many of them seasonal workers, returning from Western Europe in the weeks after countries began imposing states of emergency and implementing restrictive measures. This trend continued throughout the spring and into the summer, with Bulgarians coming back mainly from Germany, the Netherlands and the UK.

While there is still no exact data on how many Bulgarians have so far returned, and whether some of them have since left again, this development is already having an impact on the local economy.

Lachezar Bogdanov of the Institute of Market Economics told local media on September 27 that in the period since the lockdowns began money transfers to Bulgaria from abroad have fallen by approximately 2 billion euros, or around 3.3 per cent of the country’s annual GDP, compared with the same period last year.

Similar to Bulgaria and Croatia, experts and the media in Poland have also been reporting a sporadic return of some Polish workers from Western Europe during the spring. More than 3 million Poles live abroad in other EU countries.

So far, there is insufficient data to tell whether or how the pandemic has affected migration trends, Andrzej Kubisiak, deputy director of the Polish Economic Institute and an expert on labour migration, told BIRN.

Most Polish residents in the UK and Germany – the main destinations for Poles within the EU – are there for the long term: they send their kids to school and have invested in property there, making them less reactive to the pandemic and its economic effects.

In an interview with BIRN, Kubisiak said that since the pandemic struck in March, some 10 per cent of workers from Ukraine have left Poland and returned home, though he added that by the end of the summer this number was only marginally less than before the crisis.

He concluded that there is still significant demand in the main sectors that use migrant workers in Poland, namely retail, construction and manufacturing.

A COVID-19 hit on remittances

A group of catering workers wearing protective face masks during peaceful protests in front of the Bosnian Assembly in Sarajevo, Bosnia and Herzegovina. Photo: EPA-EFE/FEHIM DEMIR

Western Balkans countries have been the main exporters of labour to Western Europe for decades, and this trend accelerated in recent years due to renewed political instability, rampant corruption and low living standards.

In the process, all Balkan countries have become heavily dependent on money transfers that workers sent to their families back home. In most of the countries, these remittances each year exceed 10 per cent of annual GDP.

As the coronavirus spread across Europe, low-skilled workers were usually the first to see their wages cut and foreign workers among the first to be laid off and eventually sent home. In this way, the pandemic has had a triple negative effect on the Balkans: it reduced remittances from abroad, increased local unemployment, and put additional pressure on social services.

Some Balkan countries, like Kosovo and Albania, still have no exact data on the impact of the pandemic on their countries through reduced remittances and lost job opportunities abroad. Other countries that do have available data warn of troubling consequences from the pandemic. “It is especially worrying that this [impact] is already being felt and that the decline in remittances from the diaspora will continue,” warned the Sarajevo-based economic professor Domazet.

He added that remittances to Bosnia are expected to fall by almost one third in 2020, while the recovery, if past experience from the 2009 recession is anything to go by, will take at least three to four years.

Srdjan, a 26-year-old waiter from the Bosnian town of Kotor Varos, was one of the many foreign workers who lost their job in Slovenia. “We were all fired in March. There was simply no more work, and we couldn’t even pay for insurance and accommodation. The boss told us that work would be waiting for us when all this calmed down,” he said, adding that every day he feels less and less hope that the pandemic will end anytime soon.

The Serbian Labour Ministry told BIRN that it does not possess clear data on migration flows, but said that due to the pandemic and border closures it had noted “significantly reduced departures of citizens of the Republic of Serbia to work abroad”.

Infographic: BIRN

This conclusion is further supported by data from the National Bank of Serbia, which shows that personal money transfers from abroad from January to May amounted to 1.05 billion euros, which was 328.7 million euros – almost a third – less than in the same period in 2019.

These figures clearly show that Serbia, as the biggest country in the region, has the largest share of its people working abroad and is facing the biggest blow from the pandemic.

58-year-old Samuel Kukucka left Beocin, a small municipality in the north of Serbia, and found a job in Slovakia in 2008. He eventually settled there for good and is now employed in the PSA car factory in the western city of Trnava.

Kukucka says that when the pandemic hit, workers on short-term contracts were first to be let go and had to return to Serbia. “However, the people who had long-term contracts remained in Slovakia – we worked as if nothing was happening,” Kukucka told BIRN. “In August, we had a swarm of workers from Serbia. Since Ukraine is travel restricted, Serbian workers are even more important than before.”

Montenegrin officials also say that they still have no data on the migrant flows caused by the pandemic. But the Central Bank of Montenegro reported that remittances from abroad in the first half of 2020 totalled 256.2 million euros, down 15 million euros, or some 7 per cent, from the same period last year.

Goran Kapor, a Montenegrin economic journalist, says that this decline is expected to grow over the coming months, since most remittances are from Montenegrins working in the EU. Many of them have not been able to re-enter the EU due to the travel restrictions or have lost their jobs and been forced to return home.

Even without official data, anecdotal evidence suggests that the pandemic has had a major impact on labour mobility across Southeast Europe, which in turn will have serious impacts on the socio-economic situation in the region.

On the other hand, COVID-19 has, at least temporarily, slowed the region’s brain drain, which has been identified as one of the most dangerous problems with multiple long-term consequences for the countries involved.

“Migration has paramount importance for our region – 43 per cent of Balkan people consider migrating,” acting Albanian Foreign Minister Gent Cakaj said during a high-level online conference in October titled, “Young People, Migration and the Demographic Challenges in the Western Balkans”, which was organized by the German Federal Foreign Office, the Southeast Europe Association and the Aspen Institute Germany.

“Young people leave when they do not have opportunities, and those countries lose their future. The Western Balkans belongs to the EU, and once we create an attractive environment, young people will stay,” Dubravka Suica, vice-president of the European Commission for Democracy and Demography, told the conference.