"Delocalisation", the shifting of work to low-cost countries, has been greatly exaggerated as a threat to European jobs and is good for the European economy overall, an unpublished European Commission study says. European Union finance ministers had been due to discuss the report at their monthly meeting on Tuesday but it was removed from the agenda, possibly because of political sensitivity, notably in France, diplomats said.
Trade unions and political leaders in France and Germany have dramatised job losses and a perceived threat to wage levels and social protection of West European workers from the shifting of manufacturing and services work to lower-cost countries, both in the new east European EU member states and in Asia.
But the 16-page study "Delocalisation: which challenges for the EU economy?" by the EU executive's economics directorate, obtained by Reuters, challenges widely held beliefs about the twin phenomena of offshoring and outsourcing.
"Being rather limited, there is no evidence that the phenomenon poses major problems at the macroeconomic level, particularly in respect to trade imbalances," the report said.
"There is no evidence that a de-industrialisation process is under way," it said, citing figures that show more jobs have been created in services than lost in manufacturing in Europe.
"The EU can also derive benefits from the delocalisation of production overseas, in the form of ensuring the competitiveness of European industries in some manufacturing and services sectors where it cannot be sustained via local production," it said.
Public opinion was inflamed in France and Germany last year by highly publicised incidents in which companies threatened to shift production either to eastern Europe or to Asia unless workers accepted longer working hours without extra pay.