The European Commission urged other EU states to follow Ireland's example and remove restrictions on the movement of workers from eastern Europe yesterday.
At the publication of a commission report on the EU labour market, employment commissioner Vladimir Spidla highlighted the positive economic impact that migrants from the 10 new EU states had on Ireland since enlargement.
He said migrant workers from eastern Europe had filled gaps in the labour market, creating new jobs rather than displacing existing workers. Economic growth had increased in the three states that opened their labour markets to workers from eastern Europe - Ireland, Sweden and Britain - while unemployment had decreased in all three economies.
"Free movement of workers is economically rational and is enshrined in EU treaties. We have not seen any catastrophic tendencies since enlargement," said Mr Spidla, who is a former prime minister of the Czech Republic - one of the new member states affected by the working restrictions maintained by 12 of the 15 original EU members.
The commission report shows that 53,829 personal public services numbers (PPS) were issued in Ireland from May to December 2004 to citizens of the 10 new member states and a further 107,024 PPS numbers were issued from January to November 2005. This amounts to 1.8 per cent of the working age population and 3.8 per cent of the working age population respectively.
The report concludes the level of migration seen since enlargement "does not appear to have led to a disruption of the Irish labour market". The report does not estimate the total number of EU-10 workers currently living in Ireland by adding the number of PPS numbers distributed in 2004 and 2005, which would suggest that some 5.7 per cent of the working age population were from EU-10 states.
A commission spokeswoman said this was because there were no figures available for EU-10 workers who return to their home states after periods in the Republic.
The report indicates that Ireland has the highest percentage of workers from the EU-10 in its labour force, although not the highest absolute number. Germany, which maintains a work permit system for eastern European workers, has the highest total number of eastern European workers.
Between May 2004 to September 2005, some 500,633 citizens of new member states had been awarded work permits in Germany.
The report also warns that the maintenance of restrictions on free movement of labour may exacerbate the problem of undeclared work and boost the black economy.
Although the report stops short of explicitly recommending to states that they drop the restrictions on EU-10 workers, it advises states to "carefully consider whether the continuation of the restrictions is necessary in light of the evidence of the report".
The publication of the report comes at a sensitive time for EU member states, which must decide in April whether to keep the restrictions on migrant workers in place.
Under the transition arrangements put in place when the EU expanded in May 2004 the original 15 EU members can extend restrictions for a maximum of seven years. So far, states such as Germany, France and Austria have indicated that they are likely to keep in place restrictions until 2011.
Only two countries, Spain and Finland, have so far indicated that they will remove the restrictions on freedom of labour from May 1st. Portugal and Greece are also thought to be considering lifting the restrictions.
The report says that in practice the restrictions maintained by 12 of the 15 original EU member states before the May 2004 enlargement do not affect Malta or Cyprus. The remaining eight eastern European countries have virtually all called for the lifting of the restrictions, stressing the fundamental nature of their citizens' right to freedom of movement, says the report.
Mark Hennessy, Political Correspondent, adds: The commission report showed that the Labour Party's reference last month to the introduction of work permits was "politically wrong and economically purposeless", the Minister for Justice, Equality and Law Reform, Michael McDowell, said.
The Labour leader had supported work permits because Labour fears that voters regard it as "unreliable" on the issue, Mr McDowell went on.