European globalisation fund recently proposed by the European Commission designed to soften impact of globalisation is not only an economically unsound reaction to freer economic environment but also has significant drawbacks for European economic integration. According to the Commission plan, compensatory mechanisms for workers of redundant firms fleeing the EU-25 would not cover the firms changing the location from the old member states to the new Central and Eastern European countries. The Commission and analysts have overlooked that the proposed scheme actually creates more favourable conditions to move businesses outside the EU – to Ukraine, Russia or candidate countries – rather than to another EU location. Actually, the Commission gives the incentive worth €500 million to relocate production outside the EU. Steps to avoid tax competition and curbs on the free movement of workers and services have already become common tools to tame the new EU members states, however, the direct instigation for the firms and workers not to choose the EU-10 is a negligently unforeseen side effect of a subservient economic policy and a serious obstacle to the free movement of capital in the EU-25.
