Accession negotiations, fight against organized crime and uncertain economic prospects

Slovenia blocking Croatia’s Accession to the EU

Croatia’s ambi­tious acces­sion agen­da that should be com­plet­ed by the end of 2009 has been jeop­ar­dised by bilat­er­al bor­der dis­putes with Slove­nia, who vetoed the open­ing and clos­ing of nego­ti­a­tions on sev­er­al chap­ters at the EU-Croa­t­ia inter­gov­ern­men­tal acces­sion con­fer­ence on the grounds that the attached doc­u­ments prej­u­dice the future bor­ders between the two states. The block­ade came as a shock to the Croa­t­ian pub­lic and the gov­ern­ment which was hope­ful that by 19 Decem­ber 2008, the ten remain­ing nego­ti­a­tion chap­ters would be opened and five chap­ters would be pro­vi­sion­al­ly closed for which the bench­marks were already met. The medi­a­tion and attempts of the French EU Pres­i­den­cy to con­vince Slove­nia to with­draw the veto failed. In the 2004 enlarge­ment round the EU left the bilat­er­al dis­putes out from the acces­sion process. After all, bilat­er­al dis­putes of Slove­nia with Croa­t­ia and with Italia over sev­er­al mat­ters did not block the acces­sion of Slove­nia to the EU. The Prime Min­is­ter Ivo Sanad­er, in his first reac­tions to the block­ade has men­tioned that this is an unprece­dent­ed sit­u­a­tion and stat­ed that “Croa­t­ia will not buy its mem­ber­ship in the EU with its territory”.[1] Pres­i­dent Mesić in his reac­tion men­tioned that the block­ade is now also a prob­lem for Brus­sels and not only for Croa­t­ia, keep­ing in mind that the oth­er 26 mem­bers were in favour for the open­ing of the remain­ing nego­ti­a­tion chapters.[2] The Croa­t­ian media also report­ed the state­ment of Kristi­na Nagy, spokes­woman of Com­mis­sion­er Olli Rehn, who expressed regrets that the efforts of the French Pres­i­den­cy failed and that Slove­nia did not accept its proposal.[3] Instead, only one chap­ter was opened and three closed, mak­ing alto­geth­er 22 opened and 7 tem­porar­i­ly closed (out of 35), which does not ade­quate­ly reflect Croatia’s pre­pared­ness for acces­sion. Sloven­ian Prime Min­is­ter Pahor pro­posed con­tin­u­a­tion of talks, which was accept­ed by Prime Min­is­ter Sanad­er under con­di­tion that the rep­re­sen­ta­tive of the Euro­pean Com­mis­sion should also be present. Czech Prime Min­is­ter Topolánek stat­ed that if the issue could not be solved bilat­er­al­ly, solu­tion for the dis­put­ed bor­ders should be found at the Inter­na­tion­al Court of Arbitration.[4] This has been the Croa­t­ian pro­pos­al for more than two years, but this idea has not been very attrac­tive to Slove­nia so far. Czech For­eign Min­is­ter Schwarzen­berg has stat­ed that the Czech Repub­lic will do all it can to enable Croa­t­ia to become a mem­ber of the EU, as this is also in the inter­est of the EU.[5] Italy also attempt­ed to assist to find a solu­tion in this dis­pute dur­ing the offi­cial vis­it of Min­is­ter of For­eign Affairs, Fran­co Frat­ti­ni to Zagreb in January.[6] Dis­cus­sions among aca­d­e­m­ic cir­cles seem to be more flex­i­ble and inno­v­a­tive than high lev­el pol­i­tics in sim­u­lat­ing pos­si­ble solu­tions at bilat­er­al con­fer­ences and meet­ings, as showed at a recent grad­u­ate stu­dent con­fer­ence joint­ly organ­ised by Zagreb and Ljubl­jana Fac­ul­ties of polit­i­cal and social sciences.[7] Most recent­ly, Olli Rehn launched an EU ini­tia­tive to form a sort of medi­a­tion coun­cil which will be head­ed by Finnish Nobel Lau­re­ate Mar­ti Ahti­s­ar­ri to assist Slove­nia and Croa­t­ia in find­ing the accept­able solu­tion for the 18 year long bor­der dis­pute and unblock the Croa­t­ian acces­sion negotiations.[8]

Fight against corruption and organized crime intensified after appointment of new ministers in the last quarter of 2008

Fight against cor­rup­tion and orga­nized crime remains amongst the top pri­or­i­ties of Croa­t­ian gov­ern­ment, espe­cial­ly after shock­ing and bru­tal mur­ders of jour­nal­ist Ivo Pukan­ic, the edi­tor of polit­i­cal week­ly Nacional and Ivana Hodak, attor­ney appren­tice and a daugh­ter of the renowned Croa­t­ian attor­ney Hodak, in Octo­ber 2008. Both mur­ders hap­pened on the streets of Zagreb, under­lin­ing the poor state and the lack of coor­di­na­tion of the police and the Min­istry of Inte­ri­or. The pub­lic pres­sure on the gov­ern­ment to take all the pos­si­ble mea­sures to ensure secu­ri­ty to ordi­nary cit­i­zens was enor­mous, result­ing in some imme­di­ate changes in the top posi­tions of the police and min­is­ters of the inte­ri­or as well of jus­tice. For the first time the Gov­ern­ment of Prime Min­is­ter Sanad­er has replaced these posi­tions with experts and not loy­al HDZ par­ty mem­bers, which was well received by gen­er­al pub­lic. Some media ana­lysts how­ev­er con­sid­er it as an ali­bi for inabil­i­ty to find a quick solu­tion to the prob­lem of orga­nized crime which is deeply root­ed and some­times even polit­i­cal­ly sponsored.[9] New appoint­ed Jus­tice Min­is­ter is Pro­fes­sor Ivan Šimonović, while Tomis­lav Kara­marko was appoint­ed as new Inte­ri­or Min­is­ter and Vladimir Faber as head of police. The new­ly appoint­ed min­is­ter Šimonović had to act quick­ly and pro­posed adop­tion of imme­di­ate leg­isla­tive changes that fur­ther strength­ened the author­i­ties of USKOK (Office for the Fight against Cor­rup­tion and Orga­nized Crime) as well as pro­ce­dures of pros­e­cu­tion and inves­tiga­tive judiciary.[10] Oth­er changes that fol­lowed were the adop­tion of changes in reg­u­la­tion includ­ing the laws that pre­vent the con­flict of inter­est, changes in court pro­ce­dures which expe­dite process­es in courts, as well as changes in leg­is­la­tion to speed up the enforce­ment and exe­cu­tion of finan­cial pro­ce­dures in favour to creditors.[11] In addi­tion, some pres­i­dents of the courts had to step down because of alle­ga­tions of cor­rup­tion, such as the pres­i­dent of Trade Court Zagreb due to detect­ed dona­tions from Zagreb Hold­ing which is against the law on courts. In the last months the court process­es final­ly start­ed for the main pro­tag­o­nists from Croa­t­ian Pri­vati­sa­tion Fund of the USKOK action mae­stro, after a year of inves­ti­ga­tion. Fur­ther­more, sev­er­al actions were under­tak­en to pros­e­cute the noto­ri­ous cas­es of cor­rup­tion at the Uni­ver­si­ty of Zagreb and Cadas­tre Registers.

Economic prospects for 2009 much bleaker – a year of uncertainty is ahead

As else­where in the world, the eco­nom­ic prospects for 2009 in Croa­t­ia are much bleak­er than before and a fur­ther decel­er­a­tion of the GDP which has slowed marked­ly in the last quar­ter of 2008 is being pre­dict­ed. This shows that the glob­al finan­cial cri­sis has start­ed to affect the Croa­t­ian econ­o­my. The esti­ma­tions of the growth of GDP have been revised and low­ered down already sev­er­al times in the last three months[12] The Croa­t­ian Nation­al Bank was much more cau­tious and pre­dict­ed the growth of only 1 per­cent in 2009 and its Gov­er­nor Rohatin­s­ki was plead­ing for  respon­si­ble behav­ior on all lev­els in order to over­come the first blows of the cri­sis in the real sec­tor. [13] The lat­est Tran­si­tion Report of the Euro­pean Bank for Recon­struc­tion and Devel­op­ment (EBRD) pre­dicts that Croa­t­ia would not be severe­ly hit by the reces­sion, how­ev­er it may record a zero growth in 2009.[14] The ana­lysts of the lead­ing banks in Croa­t­ia revise the fore­casts prac­ti­cal­ly every week and pre­dict that Croa­t­ia might even face a neg­a­tive growth rate.[15] Most recent­ly the ana­lysts of the Eco­nom­ic Insti­tute Zagreb have released the gloomi­est fore­cast so far and envis­age the neg­a­tive growth rate of GDP in 2009 of ‑1.4 per­cent which will result in a sub­stan­tial increase of unem­ploy­ment and decline of state bud­get revenues.[16] As times goes by, even these prog­noses seam to be over-optimistic.



[1] State­ment for HTV (Croa­t­ian Tele­vi­sion), 16 Decem­ber 2008.
[2] State­ment of Stjepan Mesić at a Press con­fer­ence on 18 Decem­ber 2008, avail­able at: (last access: 9 Jan­u­ary 2009).
[3] Cf. “Sloven­ian veto — presedence and scan­dal“, HRT (Croa­t­ian Tele­vi­sion ), 18 Decem­ber 2008, , avail­able at:[tt_news]=24247&tx_ttnews[backPid]=37&cHash=e294bfe143 (last access: 25 Feb­ru­ary 2009).
[4] Cf. “Topolánek: Slove­nia and Croa­t­ia to the inter­na­tion­al court,, 7 Jan­u­ary 2009, avail­able at: (last access: 20 Jan­u­ary 2009).
[5] Vjes­nik, on 9 Jan­u­ary 2009, p. 5.
[6] Novi list, 9 Jan­u­ary 2009, p. 7.
[7] As shown by the state­ments of Prof Davorin Rudolf, Zagreb, and Prof. Aleš Gabrič, Ljubl­jana, at the region­al con­fer­ence “Repub­lic of Craoa­t­ia and Repub­lic of Slove­nia–  open bil­lat­er­al issues“, Čatež, 4–6 Decem­ber 2008, avail­able at:‑books/texte/Slowenien/SimulationCatez08.htm (last access 16 March 2009).
[8] “Mar­ti Ahti­s­ari to solve the Sloven­ian-Croa­t­ian Dis­pute”, com­ment of Deutsche Welle, avail­able at:„82220_cid_3971111,00.html (last access: 30 Jan­u­ary 2009).
[9] See for instance Srećko Jur­dana: “Severe omis­sions of secu­ri­ty ser­vice”, Nacional, 3 Novem­ber 2008, avail­able at: (last access: 28 Janu­ray 2009).
[10] See the speech of Min­is­ter Šimonovic at the Croa­t­ian Par­lia­ment on 29 Octo­ber 2009, avail­able at: (last access: 28 Jan­u­ary 2009).
[11] Sum­ma­ry of adopt­ed mea­sures in the last quar­ter of 2008 avail­able in the Nation­al Pro­gram for Acces­sion of Croa­t­ia to the EU for 2009, adopt­ed in Decem­ber 2008, avail­able at: (last access: 28 Jan­u­ary 2009).
[12] The State Bud­get was made on the opti­mistic 2 per­cent GDP growth fore­cast. See Min­istry of Finance: “The Bud­get Pro­pos­al for 2009”; avail­able at: (last access: 29 Jan­u­ary 2009).
[13] Inter­view with Dr Željko Rohatin­s­ki, Gov­er­nor of the Croa­t­ion Nation­al Bank in busi­ness month­ly, Ban­ka, Jan­u­ary 2009, pp. 18–22.
[14] Peter San­fey, EBRD, on the occas­sion of the pre­sen­ta­tion of the Tran­si­tion Report 2008 at the Zagreb Stock Exchange,  27 Jan­u­ary 2009.
[15] See for instance macro­eco­nom­ic fore­casts of Zagre­bac­ka ban­ka in their CEE Quar­ter­ly Q4, Octo­ber 2008.
[16] Insti­tute of Eco­nom­ics Zagreb: “Croa­t­ian Eco­nom­ic Out­look Quar­ter­ly”, no. 37, Jan­u­ary 2009, avail­bale at: (last access: 30 Jan­u­ary 2009).