Montenegro Terrified of ”Croatian Situation” and Lack of Workers

Lauren Simmonds

There are several burning Croatian economic issues, shaped primarily by a lack of qualified workforce and an increasingly bleak demographic picture, is causing concern for its immediate neighbours, most of which aren’t members of the EU and therefore don’t adhere to one of the EU’s four fundamental freedoms of access to the single market – the free movement of labour.

Despite not being EU members, countries like Montenegro are beginning to bite their nails in fear of Croatia’s dire situation leaking over into their country.

As Poslovni Dnevnik writes on the 2nd of July, 2019, concerned employers warn that even Croatia’s neighbour to the south, Montenegro, will not remain immune to the outflow of labour that is negatively affecting the countries of the region and is continuing to spread, and the consequences of such a problem, being dubbed the ”Croatian situation”, are already being felt in Montenegro, regardless of the fact that this Southeastern European country is nowhere near anything like European Union membership.

The Employers’ Union of Montenegro have stated that they believe the worst is yet to come for their country, which will likely be harder hit than Croatia.

”It’s currently difficult to assess the impact of emigration as well as the serious threat of the aging of our population on economic development, as we don’t have any official data. At the Employers’ Union of Montenegro (UPCG), we believe that the outflow of workers, if we continue on at this pace, will be devastating for the Montenegrin labour market, especially given the fact that Montenegro has been struggling for years with a lack of adequate workforce and is replacing it by employing foreign workers, mainly with workers from other countries of the region, which is now turning to the European market and Croatia as the closest EU member state,” the employers’ association warned.

Just a few years ago, Croatia only allowed a few thousand foreigners to be hired by Croatian companies, and there has been an increase in this number to 65,100 (non EU nationals) this year.

In addition to the introduction of this particular measure, Croatia has also adopted a model for Croatian seasonal workers which enables things like insurance to be ensured throughout the year, beyond the summer tourist season, in which the work of seasonal employees takes place. All this is done in attempt to make sure Croatia’s economic growth doesn’t slow down and as such reduce the competitiveness of the Croatian economy, nor deal yet another negative blow to Croatia’s demographic movements on the state’s resources, the aforementioned Montenegrin association states.

”With the additional announcement of the opening up of the labour markets of certain European countries, the shortage of workers will soon become a key issue for the Montenegrin economy – not only in the field of hospitality, tourism and construction, but also many other areas, such as in healthcare, where we’ve witnessed the significant outflow of those who work in healthcare, which is perhaps the most sensitive issue for all of us.

Looking at Croatia’s unenviable situation from within close quarters, the Montenegrins in particular are finding this economic situation more than alarming, forcing them to take measures to make sure that their country is more attractive not only to potential foreign investors, but also to Montenegrin employees.

In order to try to avoid what is considered to be an ”inevitable” Croatian situation, Montenegro is expected to respond in a timely manner to issues at the state level by adopting responsible strategic decisions, starting with the labour market, which needs further assessment, improving the conditions for maintaining existing jobs and opening up new jobs, a faster and more efficient administration, ensuring a more predictable and stable business environment and a stable tax system that would eventually lead to adequately paid and more job satisfaction.

Montenegro is obviously looking at Croatia’s constantly worsening demographic trends, dire economic situation and the outflow of qualified workers as a burning issue, and is expecting all state institutions to get on their feet to try to tackle such a situation in their country, before it’s too late.

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