I propose to take Questions Nos. 123 and 124 together.
On 9 December 2011, Croatia signed the Treaty of Accession to become the EU's 28th Member State. Ireland signed the Instrument of Ratification for the Croatian Accession Treaty on 21 September 2012. The ratification process, by the parliaments of all 27 EU Member States, is expected to be concluded by the end of June 2013. Therefore, entry into force and accession of Croatia to the EU is expected to take place on 1 July 2013. An assessment has been made, in light of analysis and recent data, of the possible impact on the labour market by granting access. The assessment included a review conducted by Forfás which considered the likely impact of opening access to the Irish labour market to Croatian nationals following Croatia's accession to the EU.
A number of factors are noted in respect of this issue. Firstly, it is highly unlikely that significant numbers of Croatians wish to migrate to Ireland. Ireland's current economic status presents a very weak ‘pull’ factor for Croatians. There are low numbers of job vacancies except in areas experiencing a shortfall in skills supply e.g. Information Technology – additional migrants to such sectors would be welcome. International studies show that migration is heavily influenced by existing migrant populations and established social networks in the destination country. Eurostat estimates that there are approximately 350,000 Croatian nationals currently resident in the EU. Germany, Austria and Italy account for 91% of Croatian nationals living within the EU. According to the 2011 Census, there are only 846 Croatian nationals resident in Ireland. There is therefore not a sufficient population of Croatians in Ireland at present to create an attracting factor.
There is a very low propensity for Croatians to emigrate. A Gallup survey undertaken in 2010 suggests that the numbers of Croatians with firm intentions of leaving Croatia are relatively low (only 0.1% of the adult population or 4,000 people were considering moving permanently from Croatia in the following 12 months). Ireland did not feature as a target destination. This corresponds with Employment Permits data concerning nationals of Croatia where only 12 employment permits were issued in 2012 in respect of Croatian nationals. Secondly, in quantitative terms the size of Croatia’s labour force is relatively small with a total labour force of 1.78 million with only circa 350,000 people in the 25-34 age group (generally the most mobile demographic of a country’s population). Ireland's labour market, in line with EU obligations, is already open to an EU workforce of 229 million.
Thirdly, experience suggests that opening access to the Irish labour market may not have a significant impact on the State's services. PPS numbers are a unique reference number issued to persons when transacting with Government Departments and other Public Bodies. The experience in respect of Bulgaria (a country with a labour market twice the size of Croatia and to which Ireland gave full access to its labour market in 2012) suggests that only a modest increase arose in respect of PPS registrations which could not be described as having a distortionary impact on the Irish labour market.
Fourthly, a further factor borne in mind when estimating the impact of access versus restrictions to a labour market, is the issue of undeclared work. The Government decision pertains only to employment - Croatians will, in any event, enjoy certain rights afforded to all EU citizens from 1 July and will therefore be able to reside in Ireland subject to restrictions under the Residence Directive. Such nationals will be able to study, work as self-employed, or establish businesses here. Applying restrictions to employment when it is possible work as self-employed can increase the potential for undeclared work. The main problem with undeclared work is that workers fall outside the tax net. They are also more likely to undercut minimum wages in low-skilled jobs and might contribute to the observed unemployment rate if this undeclared work displaces jobs among registered members of the labour force.
Finally, it was noted that Ireland has an excellent relationship with Croatia and it is important that this relationship is developed further for the benefit of both countries. Bearing in mind that Croatia applied for membership of the EU under Ireland's last Presidency of the EU it is timely that Croatia will join the EU just after the conclusion of Ireland's Presidency of the Council of the EU. By providing full access, Ireland is continuing its policy of openness to new Member States and highlights the need for continued EU solidarity. Based on the evidence available, Forfás concludes that it is unlikely that Croatia's entry to the EU will have a significant distortionary impact on the Irish labour market and recommended that transitional arrangements should not be applied in the case of Croatian nationals seeking to work in Ireland following Croatia's accession to the EU. In light of all these issues, Government has decided not to exercise an option under the Treaty to restrict access to Ireland’s labour market for nationals of Croatia. As legislation must be enacted in order to give legal effect to the opening of Ireland's labour market to Croatia upon its EU accession, the Bill will be introduced as soon as possible.