On 1 May the European Union enlarges from 15 countries to 25 as central European and Baltic states join the European Community.
This will have a number of significant implications for the packaging industry. The first will be the political impact of MEPs from these countries being elected to the European Parliament. How will they affect the balance of power between the political parties and what will be the impact on legislation such as the Packaging Directive?
The UK, like other EU Member States, has seen a reduction in its number of MEPs to make space for those from the new countries. The likelihood at present is that the Green Party component of the Parliament will not increase. For exporters there is the attraction of large new consumer marketplaces keen to improve their lifestyles and substantial EU funds being committed for infrastructure improvements in the East.
Many British and European companies have moved manufacturing to central European countries to take advantage of low labour costs. In some cases their packaging suppliers have followed and established local plants to service their customers.
Such investments may, however, not continue, as costs start to rise in these countries through being part of the EU. Switching to the single currency will bring inflation, just as we saw in the countries where it was first launched. I know of four plastics companies in Hungary who, because of escalating labour costs, are moving manufacturing elsewhere – two to the Ukraine and two to South East Asia.
We all have to realise that markets are global, not European. It is my dearest wish that EU Commission officials would realise this and not inflict on industry the current tidal wave of unnecessarily excessive regulation, which makes Britain and the EU unattractive for inward investment. I am afraid the central European countries will find this out in due course.
For those packaging companies experiencing skills shortages you may stand to benefit from East Europeans seeking work here. However, you must protect yourselves by ensuring such workers’ papers are in order and that they are seeking work legally. The same applies to contract labour.