It has been an especially good summer for Gari Cappelli: "We have had 7.5 million more overnight stays in the first seven months of 2017 than we did in the first seven months of last year. And we will pass that 100-million mark by the end of the year," says Croatia's minister of tourism. In July alone, more than 4.6 million people vacationed in the sunny Adriatic country. Croatia is especially popular with Germans – and numbers are going up.

But there is a dark side to Croatia's fairytale summer: The country lacks workers, especially at the coast. The industry is in desperate need of cooks, wait personnel, cleaners and child carers. The result is that now, in the middle of high season, some 2,700 jobs remain vacant. Many more are vacant in the construction and health sectors as well.

The major reason for that fact: After Croatia joined the European Union (EU) in 2013, many of its citizens moved to other European countries. Germany, for instance, removed all work restrictions for Croatian citizens two years ago. The EU's freedom of movement policy has resulted not only in academics and managers leaving Croatia, but ever more skilled workers, masons, cooks and nurses.

Shocking numbers

In 2016 some 56,000 Croatians emigrated to Germany. Thousands more are trying their luck in Ireland and Austria – especially young people. The high influx of immigrants from Croatia even caught Germany's federal government by surprise: In 2015, it was expecting an average influx of up to 10,000 workers annually.

This exodus is a problem that Croatia is struggling with desperately. It sounds like a paradox: On one hand there is huge demand for workers in sectors such as tourism, but on the other hand some 170,000 Croatians don't have jobs. The country's 11 percent unemployment rate is higher than the EU average. But those unemployed Croatians cannot help on the coast or in the construction sector because they are under-qualified.

The country's chamber of commerce says the solution to the problem is easy: existing rules have to be loosened and foreign workers allowed in. Minors and seniors, says the chamber, should also be allowed "to fill in for a few hours here and there" during vacation season.

Experts react to such suggestions with skepticism, warning against the potential exploitation of already underpaid minors. International law also prohibits the employment of anyone under the age of 15.

'Missed the trend'

The chamber of commerce is pushing for the Croatian government to change its practice of estimating the number of foreign workers needed – mainly from Bosnia and Herzegovina –  only once a year. The chamber says that this method makes it impossible to flexibly react to developments in the labor market. They are calling for a switch to the "Slovenian model."   

Slovenian authorities allow businesses to employ foreign workers as soon as they can prove there are no domestic workers with the necessary qualifications to fill the position. Recently, an idea put forth by former Economics Minister Davos Stern caused quite a stir. He proposed "importing" workers from the Philippines, saying: "They are well-educated, hard-working and would be satisfied with the average Croatian salary of 500-600 euros ($590-$710)." It was a proposal that failed to win favor with Labor Secretary Marko Pavic.

Pavic says, "The government has recognized there is a problem with the labor market" and will make changes to existing practice this fall. But the tourists are already there – and many local businesses are exasperated by the situation. Economics professor Ljubo Jurcic says Croatia simply failed to recognize the trend: "Croatia doesn't have active and consistent economic and social policies that can guarantee that people can find jobs." He says that it is a catastrophe that well-educated young people are leaving the country because there aren't any jobs for them at home. "And those are the ones who immediately find jobs when they arrive abroad." The government has failed completely, says Jurcic, who was himself economics minster in Croatia's Social Democrat-led government just a few years ago.

Government reacts – but too late?

Meanwhile, Prime Minister Andrej Plenkovic of the conservative Croatian Democratic Union (HDZ) has loosened construction industry quotas limiting the hiring of foreigners. He and his cabinet made the adjustment to avoid endangering the implementation of important investment projects this fall. The government also intends to invest some 20 million euros in educating and training the unemployed. But will all that be enough to solve Croatia's long-term labor market problems?

Ljubo Jurcic is not convinced it will: "Who do they think will work in the tourism sector, in hospitals and senior citizens' homes if the exodus continues? If things keep up like this we won't just have a shortage of workers, we will have a shortage of citizens. And that threatens the future of one of our most important economic sectors – the future of the younger generation."