Croatian concerns about the enlargement prospects after the Irish ‘No’

1. How does the future of the EU after the Irish ‘No’ look like?

 

After the neg­a­tive out­come of the Irish ref­er­en­dum on the Lis­bon Treaty, Croa­t­ian media most­ly focused on its impact on the fur­ther enlarge­ment. In this con­text the media quot­ed opti­mistic state­ments from EU offi­cials like the one made by Luc Van den Brande, Pres­i­dent of the EU Com­mit­tee of the Regions — dur­ing his vis­it to Croa­t­ia — that the coun­try had made excel­lent progress toward the EU mem­ber­ship and should not be dis­cour­aged with the results of the Irish ‘No’.[1]This was also a cen­tral mes­sage of the inter­na­tion­al con­fer­ence “Croa­t­ia Sum­mit 2008” held in Dubrovnik on the 5 July 2008, as jour­nal­ist Luka Brai­lo sum­marised. Croa­t­ian Prime Min­is­ter Ivo Sanad­er stat­ed at the Sum­mit that the Irish ‘No’ should not stop the enlarge­ment and leave this part of the con­ti­nent in unde­fined, dis­or­dered and uncom­plet­ed shape.[2] Jour­nal­ist Bruno Lopadić wrote that Irish rejec­tion of the Lis­bon Treaty came at the most unfor­tu­nate moment when the Union was expect­ed to show all of its capa­bil­i­ties for coop­er­a­tion and mutu­al work in fac­ing the need­ed changes and the upcom­ing finan­cial crisis.[3]

The conclusions of the European Council of December 2008 on the fate of the Lisbon Treaty welcomed with a relief in Croatia

The polit­i­cal agree­ment between Ire­land and the French Pres­i­den­cy in the eve on the Decem­ber 2008 Euro­pean Coun­cil deal­ing with the sec­ond ref­er­en­dum and pos­si­ble rat­i­fi­ca­tion of the Lis­bon Treaty by the end of 2009 was wel­comed with  relief by the Croa­t­ian pub­lic and gov­ern­ment. Croa­t­ian Prime Min­is­ter Ivo Sanad­er was an opti­mist on the issue already dur­ing his vis­it to the Repub­lic of Ire­land in Octo­ber 2008, after meet­ing with the Irish Prime Min­is­ter Bri­an Cowen, who stat­ed that the Irish ref­er­en­dum should not be a prob­lem for Croa­t­ian accession.[4] Dur­ing his offi­cial vis­it to Croa­t­ia on  12 Novem­ber 2008, the Euro­pean Com­mis­sion­er for the enlarge­ment Olli Rehn, stat­ed that even the slow­est sce­nario of the rat­i­fi­ca­tion of the Lis­bon Treaty was expect­ed to be faster than the fastest sce­nario of Croa­t­ian accession.[5]

Media analy­ses empha­sised that the process of rat­i­fi­ca­tion of the Lis­bon Treaty and Croa­t­ian nego­ti­a­tions with the EU are the two par­al­lel ongo­ing process­es. In this con­text, there is a chance for the simul­ta­ne­ous com­ple­tion of the process of Croa­t­ian acces­sion to the EU and rat­i­fi­ca­tion of the Lis­bon Treaty as jour­nal­ist Juri­ca Köbler wrote in Novem­ber 2008.[6]. Anoth­er jour­nal­ist, Augustin Palokaj, stat­ed that Croa­t­ia could even help in the sal­va­tion of the Lis­bon Treaty.[7] Name­ly, there was an idea that Irish demands on rat­i­fi­ca­tion of all agreed guar­an­tees regard­ing the Lis­bon Treaty might be con­nect­ed with the rat­i­fi­ca­tion of the future Croa­t­ian acces­sion treaty and thus sim­pli­fy the pro­ce­dure. The so called ’Irish pro­to­col’, con­tain­ing guar­an­tees giv­en to Ire­land could become a part of the treaty.

The com­ments in polit­i­cal dai­ly “Vjesnik”[8] par­tic­u­lar­ly wel­comed the Euro­pean Council’s endorse­ment of the Commission’s new Enlarge­ment Strategy.[9] Expec­ta­tions that Croa­t­ia might become EU mem­ber in  2010 or 2011 are wide­ly spread in the Croa­t­ian pub­lic by the media. Views expressed by the EU offi­cials dur­ing Decem­ber 2008 Euro­pean Coun­cil met­ing that an indica­tive and con­di­tion­al timetable for con­clu­sion of nego­ti­a­tions with Croa­t­ia by the end of 2009 is a use­ful tool and was com­ment­ed in Croa­t­ian media. Vladimir Drob­n­jak, head of the Croa­t­ian acces­sion nego­ti­a­tion team expressed his sat­is­fac­tion with the Council’s con­clu­sions relat­ed to the Enlarge­ment Strategy.[10]

Con­ces­sions giv­en to Ire­land in the Euro­pean Council’s con­clu­sions con­sid­er­ing the post­ing of an EU Com­mis­sion­er for Ire­land, guar­an­tees of neu­tral­i­ty as well as fam­i­ly and labour law issues, were elab­o­rat­ed on by the Croa­t­ian press.[11] Some media reports spec­u­lat­ed on the date of the sec­ond ref­er­en­dum in Ire­land, with most of them expect­ing that it might hap­pen at the end of 2009 (Croa­t­ian jour­nal­ist, Ines Sablić)[12] or in Octo­ber or Novem­ber 2009 (Ves­na Roller).[13] In the sec­ond half of Decem­ber 2008, the Croa­t­ian media’s focus con­sid­er­ing EU issues shift­ed from the Euro­pean Council’s con­clu­sions on the Lis­bon Treaty to the Sloven­ian block­ade of the Croa­t­ian acces­sion nego­ti­a­tions. Pro­fes­sor of Polit­i­cal Sci­ence at Zagreb Uni­ver­si­ty, Damir Gru­biša, com­ment­ed that con­ces­sions giv­en to Ire­land should enable the Irish Gov­ern­ment to suc­cess­ful­ly pave the way for the Lis­bon Treaty ratification.[14] How­ev­er, his opin­ion is that the Sloven­ian block­ade of the Croa­t­ian acces­sion nego­ti­a­tions, lead­ing to a slow­ing down of the Croa­t­ian acces­sion process at the same time endan­gers the faith of the Lis­bon Treaty, because it means that the rat­i­fi­ca­tion of the Irish guar­an­tees would also be postponed.

The upcoming European Parliament elections in June 2009 has so far attracted little attention in Croatia

As Croa­t­ia is a not an EU mem­ber, the upcom­ing EU Par­lia­ment elec­tions are present­ly not focused on or giv­en atten­tion by polit­i­cal par­ties and the gen­er­al public.

In hope that the acces­sion process might be com­plet­ed by mid 2009, the Croa­t­ian gov­ern­ment has adopt­ed a pro­pos­al for an act on elec­tions of Croa­t­ian mem­bers of the Euro­pean Par­lia­ment in the sum­mer of 2009. How­ev­er, it has become clear that Croa­t­ian cit­i­zens will not be able par­tic­i­pate in the 2009 Euro­pean Par­lia­ment elec­tions and the gov­ern­ment has revoked the urgent pro­ce­dure for this leg­isla­tive pro­pos­al on 10 July 2008. Siniša Rodin, uni­ver­si­ty pro­fes­sor of EU Law at Zagreb Law Fac­ul­ty, warned on his blog page on the pos­si­bil­i­ty that an act on elec­tions of Croa­t­ian mem­bers of the Euro­pean Par­lia­ment pro­posed by the gov­ern­ment might be in direct vio­la­tion of the EU Law anti-dis­crim­i­na­to­ry clause from Direc­tive 93/109/EC. The rea­son for it is the fact that vot­ing in Croa­t­ian diplo­mat­ic offices abroad is still reserved exclu­sive­ly only for Croa­t­ian cit­i­zens which means that (oth­er) EU cit­i­zens would not be able to use this privilege.[15]

Croa­t­ian media are also deal­ing very lit­tle with the upcom­ing Euro­pean Par­lia­ment elec­tions in June 2009. Croa­t­ian jour­nal­ist Ves­na Roller in her com­ment in Decem­ber 2008, con­clud­ed that it has become quite clear that reach­ing the goal of the Lis­bon Treaty rat­i­fi­ca­tion before the 2009 elec­tions for the Euro­pean Par­lia­ment is impos­si­ble and the new goal is the end of the 2009 or the begin­ning of the 2010.[16]

The formation of the new Commission in autumn 2009

Dur­ing the report­ing peri­od, Croa­t­ian media were not deal­ing at all with the for­ma­tion of the new Euro­pean Com­mis­sion in the autumn of 2009. The polit­i­cal par­ties were also not dis­cussing it so far.

The appointment of the High Representative not in focus in Croatia

Croa­t­ian media so far has paid lit­tle spe­cif­ic atten­tion to the appoint­ment of the future High Rep­re­sen­ta­tive for the Com­mon For­eign and Secu­ri­ty Pol­i­cy. How­ev­er, some of them spec­u­lat­ed on pos­si­ble can­di­dates for the posi­tion of the future Pres­i­dent of the Euro­pean Coun­cil under the pro­vi­sions of the Lis­bon Treaty. For instance, in an arti­cle by jour­nal­ist Mar­ti­na Hrupić Dan­ish Prime Min­is­ter Fogh Ras­mussen was men­tioned as a poten­tial favourite, but Bertie Ahern, Jean-Claude Junck­er, Tony Blair and Angela Merkel, were also among oth­ers mentioned.[17]

Long-term implications of Irish rejection concerns analysts in Croatia

Croa­t­ian polit­i­cal sci­en­tist Anđelko Milar­dović com­ment­ed in his news­pa­per col­umn that Irish ref­er­en­dum on the Lis­bon Treaty, as well as pre­vi­ous­ly the des­tiny of the Con­sti­tu­tion­al Treaty, had clear­ly shown that the con­cept of a Europe as a super­pow­er seems to be in nobody’s best inter­est. He elab­o­rates on pos­si­ble sce­nar­ios for the devel­op­ment of the Euro­pean inte­gra­tion process among which one might be a total weak­en­ing of inte­gra­tion (first sce­nario), closed core Europe and lose of the con­sen­sus between mem­ber states (sec­ond sce­nario) and pos­si­bil­i­ty of fur­ther enlarge­ment and suc­cess­ful insti­tu­tion­al reforms (opti­mistic scenario)[18]. Luka Brk­ić, pro­fes­sor at the Zagreb Fac­ul­ty of Polit­i­cal Sci­ence stat­ed in his inter­view that cur­rent glob­al devel­op­ments reflect the rela­tion­ship between the obso­lete polit­i­cal and eco­nom­ic pow­ers. He said that the EU must impose itself as a strong glob­al play­er, become a leader and impose its mod­el in cop­ing with a cur­rent cri­sis. The fate of the EU is in inte­gra­tion, but the Union has reached the lev­el where it faces the fol­low­ing prob­lems: one side of the prob­lem is the fact that the EU is not (nei­ther will it become) a nation state, there is a mul­ti-lev­el gov­er­nance of EU bod­ies and nation­al gov­ern­ments; while on the oth­er side there is a need of achiev­ing deep­er polit­i­cal inte­gra­tion. The ques­tion is how to solve effec­tive­ly these prob­lems with­out bring­ing into ques­tion future inte­gra­tion progress.[19]

2. Transatlantic relations renewed after President Bush: top priorities

 

Hope for renewal of the transatlantic relations for the benefit of both EU and Croatia

The prob­lem of transat­lantic rela­tions has been scru­ti­nized in Croa­t­ian pub­lic and  politi­cians, main­ly from two aspects: the aspect of the glob­al finan­cial cri­sis and the aspect of the new Amer­i­can admin­is­tra­tion under the new elect­ed Pres­i­dent Oba­ma. The dai­ly “Vjes­nik” has point­ed out the dif­fer­ences in the start­ing posi­tions between the EU and the USA dur­ing the G20 sum­mit in Novem­ber 2008 in Wash­ing­ton, where the EU lead­ers have advo­cat­ed stronger mar­ket reg­u­la­tion while USA sup­port­ed as much as pos­si­ble safe­guard­ing of lib­er­al capitalism.[20] Con­nect­ing this aspect with the aspect of expec­ta­tions from the new admin­is­tra­tion, EU lead­ers have dis­crete­ly expressed the hope that the new Amer­i­can admin­is­tra­tion will have more poten­tial for improv­ing the per­for­mance of the Amer­i­can econ­o­my than the Bush admin­is­tra­tion. Com­ments pub­lished in dai­ly “Jutran­ji list” found this dis­agree­ment as evi­dence of the con­flict on lead­er­ship between the EU and the USA and not only on that issue, but on many others.[21] Dis­cussing this issue, pro­fes­sor Luka Brk­ić from the Fac­ul­ty for Polit­i­cal Sci­ence in Zagreb, had stressed that EU coun­tries have under­stood that no sin­gle coun­try has poten­tial to cope nei­ther with the US econ­o­my nor with giant cor­po­ra­tions in the world. There is still a pro­found dif­fer­ence between the two con­cepts: main­stream neolib­er­al, which is pre­ferred by the USA and mar­ket-reg­u­lat­ed, which is imple­ment­ed in the EU. Although these two mar­ket con­cepts have been dis­cussed for a long time, they are dif­fer­ent espe­cial­ly with the view of the cur­rent cri­sis and pos­si­ble outcomes.[22]

Regard­ing the impact to Croa­t­ia, com­ments in pro-gov­ern­ment dai­ly “Vjes­nik” have expressed the opin­ion that the upgrad­ing of the part­ner­ship between the EU and the USA, which is one of the impor­tant pri­or­i­ties of the for­eign pol­i­cy of the new Amer­i­can admin­is­tra­tion, will also pro­mote Croa­t­ian prospects to become a full-fledged mem­ber of both Euro-Atlantic struc­tures as soon as possible.[23]

In some com­ments and state­ments by top Croa­t­ian lead­ers, fine dif­fer­ences could be noticed. For instance, Pres­i­dent Mesić keeps stat­ing in each pos­si­ble occa­sion that Croa­t­ian for­eign pol­i­cy must not neglect oth­er parts of the world, and must not focus only on the USA[24] while Prime Min­is­ter Sanad­er evi­dent­ly prefers the US-Croa­t­ian part­ner­ship, which will prob­a­bly help Croa­t­ia to become a full-fledged mem­ber of NATO very soon.[25]

3. Financial crisis and challenges of global governance: the EU response

 

Mixed responses on the EU’s reaction and growing fear of recession in Croatia

Croatia’s fears of recession and devastating effects of the global economic crisis

The inten­sive pre­oc­cu­pa­tion of the Croa­t­ian pub­lic with the world finan­cial cri­sis and its reflec­tions on Croa­t­ia start­ed in the sum­mer of 2008. First reac­tions of gov­ern­ment offi­cials reflect­ed the attempt to play down the pro­por­tions of cri­sis and its pos­si­ble effects on the Croa­t­ian econ­o­my. It was hoped that the finan­cial cri­sis would be lim­it­ed to US finan­cial insti­tu­tions and its economy.

The autumn of 2008 brought the sober­ing up of and acknowl­edge­ment of the real­is­tic scope of the threat and since then, gov­ern­men­tal and pub­lic inter­est is pri­mar­i­ly direct­ed on the poten­tial impact of the cri­sis to the Croa­t­ian econ­o­my as well as its acces­sion process to the EU.

The reac­tions to the cri­sis and how to over­come it have come from prac­ti­cal­ly all social actors; the gov­ern­ment, employ­ers, banks, trade unions, experts, opin­ion mak­ers, media ana­lysts etc. Trade unions for instance, have focused main­ly on the pro­tec­tion of jobs and the liv­ing stan­dards of employ­ees and cit­i­zens. In the expec­ta­tions of a wors­en­ing of finan­cial cri­sis and its spill-over effect into the real sec­tor, the gov­ern­ment offered social part­ners, employ­ers and unions, to freeze salaries in the 2009 in order to bring the state bud­get deficit clos­er to zero,[26] how­ev­er the trade unions declined it as an unfair attempt to put the bur­den of cri­sis sole­ly on the shoul­ders of workers.[27] The gov­ern­ment also formed the ‘Coun­cil of Eco­nom­ic Advi­sors l’ in Novem­ber 2008 to ensure the need­ed expert advice on pru­dent eco­nom­ic poli­cies and mea­sures to mit­i­gate the imme­di­ate finan­cial cri­sis effects on the Croa­t­ian econ­o­my. In Feb­ru­ary 2009 the gov­ern­ment how­ev­er reject­ed a set of anti-reces­sion mea­sures sug­gest­ed by the eco­nom­ic coun­cil; and adopt­ed a much milder pol­i­cy approach to deal with it. As local elec­tions are sched­uled for May 2009, the gov­ern­ment which is led by HDZ was for a long time reluc­tant to declare open­ly that Croa­t­ia has entered into recession.[28] The Social Demo­c­ra­t­ic Par­ty (SDP) has come out with its pro­pos­al of anti-reces­sion mea­sures earlier.[29]

Thanks to pru­dent reg­u­la­tion of Croa­t­ian Nation­al Bank (CNB), bank­ing sec­tor in Croa­t­ia is still strong and has not been hurt much by the cri­sis thus far.[30] The CNB is present­ly help­ing to pre­serve the mon­e­tary sta­bil­i­ty by using the high for­eign cur­ren­cy reserves for inter­ven­ing on the mon­ey mar­ket and also ensur­ing the debt ser­vice of the government.[31] The thor­ough assess­ment of the finan­cial cri­sis’ poten­tial impact on the Croa­t­ian econ­o­my was pre­sent­ed in the recent CNB Bulletin.[32] It has empha­sised that the con­se­quences of the inter­na­tion­al finan­cial cri­sis on the Croa­t­ian econ­o­my will be first seen in the increased inter­est rates on for­eign debt and in the decrease of Croa­t­ian exports of goods and ser­vices. With­in the con­duct­ed sim­u­la­tion mod­el, CNB illus­trat­ed that the cost of bor­row­ing from abroad (for Croa­t­ian banks, com­pa­nies and the gov­ern­ment) will increase by 4 per­cent, due to which com­mer­cial banks might increase inter­est rates on house­holds and cor­po­rate loans (by 5.8 per­cent and 5.9 per­cent, respec­tive­ly). Final­ly, this would result in a decrease of house­hold loans by 28 per­cent. As a response to such a sce­nario, the Gov­er­nor of CNB, Željko Rohatin­s­ki, empha­sized that fore­casts from the mod­el do not nec­es­sar­i­ly become real­i­ty and that some of these neg­a­tive effects, can be mit­i­gat­ed by the already adopt­ed CNB mea­sures such as the low­er­ing of the oblig­a­tory reserves for banks.[33]

The perceptions on EU response to the effects of the financial crisis are mixed in Croatia

The Croa­t­ian media reports focused quite inten­sive­ly on how the EU is han­dling the finan­cial cri­sis – its role in deal­ing with the con­se­quences of the cri­sis, under­tak­en mea­sures, and coop­er­a­tion with the rest of the world, as well as the analy­sis of the EU plans for over­com­ing the crisis.

Most of the debates and analy­ses were focused on the dynam­ics of the cri­sis and the per­for­mance of the EU in this con­text. The fears of reces­sion were por­trayed as rea­son­able, while the reports were cen­tred on the mea­sures of the EU gov­ern­ments which were des­per­ate­ly try­ing to save their finan­cial insti­tu­tions. The media reports stressed the lack of a clear vision of EU actions in solv­ing the prob­lems in the finan­cial sec­tor. Most media report­ed on the appeal of José Manuel Bar­roso, the Pres­i­dent of the Euro­pean Com­mis­sion, for the coop­er­a­tion between mem­ber coun­tries since nei­ther of them will be able to over­come the cri­sis alone.[34] The media also ini­tial­ly report­ed that the Union reject­ed the pos­si­bil­i­ty of set­ting up agen­cies which would mon­i­tor bank oper­a­tions through­out its ter­ri­to­ry and announce the ad hoc meet­ings which would deal with each indi­vid­ual com­pa­ny. The EU also reject­ed the French pro­pos­al to estab­lish a Euro­pean fund that could react sim­i­lar­ly as the Amer­i­can Min­istry of Finance with large injec­tions of mon­ey in the squalid busi­ness. French Pres­i­dent Nico­las Sarkozy con­cerns on the future of the Euro­zone if it con­tin­ues to func­tion with­out a clear­ly defined eco­nom­ic man­age­ment body, were also wide­ly report­ed here. Such eco­nom­ic gov­ern­ment should coop­er­ate clos­er with the Euro­pean Cen­tral Bank (ECB), but the French Pres­i­dent also stressed that coop­er­a­tion would not dis­rupt the inde­pen­dent mon­e­tary pol­i­cy. The Croa­t­ian media also report­ed about the divi­sions in the reac­tions of the mem­bers of the Euro­pean Par­lia­ment e.g. that Ger­mans fear that it will under­mine the inde­pen­dence of the ECB and cre­ate divi­sion between the EU mem­ber states.[35] Ger­man Chan­cel­lor Angela Merkel’s opin­ion was often sin­gled out by media as the strongest oppo­nent to the joint action.[36]

Opin­ions on how the EU is han­dling the cri­sis have been expressed also by the experts and aca­d­e­m­ic ana­lysts. Ivan Lovri­nović, Pro­fes­sor at The Fac­ul­ty of Eco­nom­ics and Busi­ness, is of opin­ion that the econ­o­my of the Euro­pean Union is about to face major chal­lenges, espe­cial­ly the Euro­pean Cen­tral Bank which thus far has not been influ­enced by exter­nal pres­sures of such kind. He also stressed that the Euro­pean Union does not have a unique strat­e­gy for over­com­ing the finan­cial cri­sis, yet that each mem­ber state indi­vid­u­al­ly cre­ates the arrange­ments for deal­ing with it, which can eas­i­ly be seen in the actions of Sarkozy, Merkel and Brown.[37] Lovri­nović also addressed the role of the Euro­pean sin­gle cur­ren­cy – Euro – in deal­ing with the cri­sis. In the last two years, the exchange rates for the dol­lar and the Euro have depre­ci­at­ed by fifty per­cent which made the EU coun­tries unable to pro­tect their economies. In addi­tion, depre­ci­a­tion of the dol­lar rep­re­sents also an exter­nal shock to the eco­nom­ic activ­i­ty, and accord­ing to him the EU has no instru­ments to fight back the ‘inter­cur­ren­cy war’ that has spread to the Japan­ese and Chi­nese currency.[38]

The rela­tion­ship between the EU and the USA as well as with oth­er coun­tries in the con­text of solv­ing the cri­sis was also com­ment­ed on in Croa­t­ia. Croa­t­ian Prime Min­is­ter Ivo Sanad­er con­sid­ers that Europe can­not be sep­a­rat­ed out­side the Euro-Atlantic line and thinks that it is impor­tant for the EU to coor­di­nate mea­sures with the Unit­ed States because both economies are mutu­al­ly dependent.[39] In his speech on the 16th Con­fer­ence of the “Croa­t­ian Soci­ety of Econ­o­mists” held on 12 Novem­ber 2008 in Opati­ja, Croa­t­ian Pres­i­dent Stjepan Mesić point­ed out that the world is search­ing for com­mon solu­tions, while simul­ta­ne­ous­ly try­ing to pro­tect both exist­ing inter­na­tion­al inte­gra­tions and their indi­vid­ual interests.[40] After the G20 sum­mit, from which much was expect­ed, the coun­tries end­ed with­out spe­cif­ic mea­sures for eco­nom­ic recov­ery. The mar­ket expect­ed a joint strat­e­gy, not a deci­sion on leav­ing each gov­ern­ment to tai­lor the response to the cri­sis accord­ing to their indi­vid­ual cir­cum­stances. In addi­tion, the media report­ed dif­fer­ent views on the approach to the finan­cial cri­sis – that of Europe and of the USA. There are also oth­er coun­tries, such as Brazil and Chi­na, with large devel­op­ing mar­kets, which seek to par­tic­i­pate more in the deci­sion-mak­ing process. Some ana­lysts note that all of these direct­ly imply a decrease in the influ­ence and pow­er, both of the Unit­ed States and Euro­pean countries.[41]

Also, of con­sid­er­able pub­lic inter­est were analy­ses relat­ed to the present desir­abil­i­ty of the mem­ber­ship in the Euro­pean Union. The main ques­tion that appears in media is how much is it worth to be part of the unit­ed Europe now. Almost iron­i­cal­ly, the finan­cial cri­sis could play an impor­tant role in the process of EU enlarge­ment which can be seen on an exam­ple of Ice­land, Den­mark and Ire­land. Com­ments con­clude that, even with the cri­sis, the inte­gra­tion is very much desir­able and worthwhile.[42] Croa­t­ian media close­ly fol­lowed the chain of events in these coun­tries. After being shak­en up by the dimen­sion of the eco­nom­ic cri­sis, Ice­land expressed inter­est in join­ing the Euro­pean Union, and Den­mark enun­ci­at­ed the pos­si­bil­i­ty of enter­ing the Eurozone.[43] The cri­sis also push­es Ire­land to the EU – it has final­ly announced some progress asso­ci­at­ed with the Lis­bon Treaty, which is impor­tant for the real­iza­tion of fur­ther EU enlarge­ment. Irish peo­ple are start­ing to won­der whether they act wise­ly while say­ing ‘No’ to the Lis­bon agreement.[44] Croa­t­ian pub­lic is very much inter­est­ed in the sit­u­a­tion in Ire­land, because their grow­ing sup­port to the Lis­bon agree­ment opens the EU door to Croatia.[45]

Regard­ing the poten­tial impli­ca­tions of the cri­sis on Croatia’s sta­tus as one of the can­di­date coun­tries, Croa­t­ian Gov­ern­ment and the gen­er­al pub­lic wel­comed the state­ment of the Euro­pean Com­mis­sion­er for enlarge­ment Olli Rehn who said that the process of Croa­t­ian acces­sion to the EU will not slow down due to the glob­al finan­cial cri­sis. How­ev­er, he added that it is true that the EU suf­fers from an increased fatigue from an enlarge­ment which is asso­ci­at­ed with the finan­cial crisis.[46] Jad­ran­ka Kosor, Vice-Pres­i­dent of the gov­ern­ment and Min­is­ter of the Fam­i­ly, Vet­er­ans’ Affairs and Inter­gen­er­a­tional Sol­i­dar­i­ty, believes that Croa­t­ia will triple the efforts in fin­ish­ing the nego­ti­a­tions by the end of the year 2009, part­ly due to the fact that in times like this, it would much bet­ter to be part of the EU.[47]

Sev­er­al Croa­t­ian experts com­ment­ed also on the Euro­pean plan for solv­ing the cri­sis by low­er­ing the tax­es and increas­ing spend­ing. This plan is based on the belief that the econ­o­my will recov­er if each mem­ber state takes some mon­ey from the bud­get and redi­rects it in to spend­ing. The fis­cal incen­tives (in a large num­ber VAT reduc­tion), will be launched and com­plet­ed in the year 2009. Although each coun­try will indi­vid­u­al­ly draw up a pro­gram that best suits her needs, coun­tries will have to be coor­di­nat­ed in their measures.[48] In her com­ment on the EU plan on tax incen­tives, Kata­ri­na Ott, the direc­tor of the Insti­tute of Pub­lic Finance stat­ed that Croa­t­ia may even have to raise tax­es, not reduce them. She point­ed out that the mea­sure of reduc­ing tax­es in a time of reces­sion does not have to increase spend­ing and employ­ment. Fur­ther­more, economies are in dif­fer­ent cir­cum­stances, and there are coun­tries like Croa­t­ia that can­not afford such a fis­cal stim­u­la­tion. She also thinks that this mea­sure can­not be under­tak­en in a coun­try with high fis­cal deficit and for­eign debt. At the same time, Daniel Nestić from The Insti­tute of Eco­nom­ics, Zagreb, also points out that Croa­t­ia should not fol­low the EU in its mea­sures and impose large fis­cal ben­e­fits because this mon­ey would spill over in import and would not encour­age the recov­ery of domes­tic industry.[49]

In short, the cri­sis with­in the Union, as men­tioned in the media, can be seen as two-sided. On the one hand it can be said that the cri­sis hit the Union a few years too ear­ly, before the joint sys­tem of finan­cial oper­a­tions and its con­trol was orga­nized. In such a sit­u­a­tion the actions of indi­vid­ual gov­ern­ments of the mem­ber coun­tries could cre­ate a chaot­ic sit­u­a­tion with­in the Union (for exam­ple, the Irish and Greek res­cue of nation­al banks is high­ly crit­i­cized). On the oth­er hand, the cri­sis can be help­ful, since the Union will find the need for the estab­lish­ment of a com­mon strat­e­gy and safe­ty mea­sures for sim­i­lar crises in the future.[50]

Dur­ing the con­fer­ence enti­tled “The impact of world finan­cial cri­sis on Croa­t­ia” which was held on 8 Decem­ber 2008 in Zagreb, one of the lead­ing lob­by­ists in Brus­sels, Daniel Gueguen, said that the prob­lem the EU will have to face is much big­ger than the reces­sion. In his speech he stat­ed that, in the EU, there is no fis­cal, eco­nom­ic and social coor­di­na­tion and that he is very dis­ap­point­ed by the poor man­age­ment of the Union. He also added that the Union’s res­cue plan is the worst doc­u­ment that he has seen so far.[51]

In its recent analy­sis, the Croa­t­ian Asso­ci­a­tion of Banks con­clud­ed that Croa­t­ia should care­ful­ly mon­i­tor devel­op­ments in the EU, since in the con­text of the cri­sis the old rules are being rede­fined and the new ones estab­lished. Some of the changes could even rede­fine the rela­tion­ship between large and small coun­tries with­in the Union. As an impor­tant his­tor­i­cal event that deter­mines the direc­tion of reforms, they point out the pro­vi­sion of five bil­lion Euros in loans to Hun­gary by the Euro­pean Cen­tral Bank, in the light of the fact that Hun­gary is not includ­ed in the Eurozone.[52]

 

 

[1] Mar­i­jan Lipo­vac: “Croa­t­ia will enter in the EU since this is what Union wants”, state­ment of the pres­i­dent of the EU’s Com­mit­tee of the Regions, Luc Van den Brande, quot­ed in Vjes­nik, 9 July 2008, p. 3.
[2] Luka Brai­lo: “Croa­t­ia and coun­tries in the region encour­aged in they way toward EU”, Novi list, 6 July 2008, p. 6.
[3] Bruno Lopadić: “Con­ces­sions to Ire­land for the Lis­bon Treaty”, Vjes­nik, 8 Decem­ber 2008, p. 11.
[4] State­ment of the Croa­t­ian Prime Min­is­ter Ivo Sanad­er on 9 Octo­ber 2008 dur­ing his vis­it to Ire­land, avail­able at: http://www.javno.com/hr-hrvatska/irski-referndum-ne-bi-trebao-biti-problem-za-rh_190765 (last access: 10 March 2009).
[5] State­ment of Olli Rehn dur­ing his offi­cial vis­it to Croa­t­ia in Novem­ber 2008, web­site of the Del­e­ga­tion of the Euro­pean Com­mis­sion to Croa­t­ia, avail­able at: http://www.delhrv.ec.europa.eu/hr/content/news/id/1403 (last access: 15 Jan­u­ary 2009).
[6] Juri­ca Köbler: “We are enter­ing in to the Union in the year 2010 or 2011”, Vjes­nik, 8/9 Novem­ber 2008, p. 25.
[7] Augustin Palokaj: “Croa­t­ia can help in the sal­va­tion of the Lis­bon Treaty”, Jutarn­ji list, 11 Decem­ber, p. 8.
[8] “Nego­ti­a­tions enter­ing in the deci­sive stage”, Vjes­nik, 9 Decem­ber 2008, p. 3.
[9] Euro­pean Com­mis­sion: “Enlarge­ment Strat­e­gy and Main Chal­lenges 2008–2009”, 5 Novem­ber 2008. COM(2008) 674 final.
[10] Bruno Lopadić: “Drob­n­jak sat­is­fied with Con­clu­sions of the Euro­pean Coun­cil”, Vjes­nik, 11 Decem­ber, p. 27.
[11] Bruno Lopadić: “Con­ces­sions to Ire­land”, Vjes­nik, 11 Decem­ber 2008, p. 10.
[12] Ines Sablić: “Lis­bon Treaty-prepa­ra­tions for the EU Sum­mit”, Slo­bod­na Dal­maci­ja, 11 Decem­ber 2008.
[13] Ves­na Roller: “EU agrees to Irish demands”, Novi list, 12 Decem­ber 2008, p. 6.
[14] Damir Gru­biša: “Euro­pean horo­scope for 2009”, Europa, 6 Jan­u­ary 2009, p. 1.
[15] Siniša Rodin: Izbori za Europ­s­ki par­la­ment u Hrvatskoj, avail­able at: http://pravo-eu.blogspot.com/2008/06/izbori-za-europski-parlament‑u.html (last access: 15 Jan­u­ary 2009).
[16] Ves­na Roller: “Euro­pean Coun­cil met­ing begins”, Novi list, 11 Decem­ber 2009,  p. 28.
[17] Mar­ti­na Hrupić, Jutarn­ji list, EU & Hrvats­ka sup­ple­ment, 19 August 2008, p. 35.
[18] Anđelko Milar­dović: “The EU Con­cep­tu­al Issues and pos­si­ble sce­nar­ios”, Vjes­nik, July 4, 2008. Avail­able at: http://www.vjesnik.hr/Html/2008/07/04/Clanak.asp?r=sta&c=1 (last access: 16 March, 2009).
[19] Neven Šan­tić: Inter­view with Luka Brk­ić, “EU should impose its lead­er­ship”, Europa, sup­ple­ment of Novi list, 2 Decem­ber 2008, p. 5.
[20] Vjes­nik, Novem­ber 20, 2008.
[21] Jutarn­ji list, Novem­ber 22, 2008.
[22] Luka Brk­ić: “EU must become a leader”, Novi list, Decem­ber 2008.
[23] Bruno Lopandic: “Part­ners”, Vjes­nik, Novem­ber 2008.
[24] State­ment of Stjepan Mesić on 19 Decem­ber 2008 on Croa­t­ian TV
[25] Press con­fer­ence, 22 Decem­ber 2008.
[26] “Croa­t­ian Govt in 2008, from Elctions to Block­ade”, avail­able at: http://www.javno.com/pr.php?id=218629(last access: 28 Jan­u­ary 2009).
[27] Kres­imir Sev­er: State­ment at the meet­ing of the Socio-Eco­nom­ic Coun­cil, 2 Decem­ber 2008.
[28]  “Eco­nom­ic Coun­cil presents the first anti-reces­sion mea­sures”, avail­able at: http://www.totalportal.hr/article.php?article_id=254797 (last access: 30 Jan­u­ary 2009).
[29] More details on SDP web por­tal, avail­able at: http://www.sdp.hr/vijesti/sdp_predstavio_paket_antirecesijskih_mjera (last access: 30 Jan­u­ary 2008).
[30] Gov­er­nor Rohatin­s­ki was award­ed by the jour­nal The Banker as the best Euro­pean Gov­er­nor and the best Cen­tral Banker in the world.
[31] Inter­view with Gov­er­nor Rohatin­s­ki, Busi­ness month­ly BANKA, vol. 16, no.1, Jan­u­ary 2009
[32] Croa­t­ian Nation­al Bank: “Bul­letin No.143”, Decem­ber 2008, p. 11, avail­able at: http://www.hnb.hr/publikac/bilten/arhiv/bilten-143/hbilt143.pdf?tsfsg=b5982137f7d4aadf50f29139b97bd555 (last access: 25 Feb­ru­ary 2009).
[33] Željko Rohatin­s­ki: “Inter­est rates are not increas­ing”, 16 Jan­u­ary 2009, avail­able at: http://www.net.hr/novac/page/2009/01/16/0016006.html (last access: 25 Feb­ru­ary 2009).
[34] “Euro­pean Par­lia­ment mem­bers dis­cussed about resolv­ing the finan­cial and eco­nom­ic cri­sis after the G20 sum­mit”, EnterEu­rope, 19 Novem­ber 2008, avail­able at: http://www.entereurope.hr/cpage.aspx?page=clanci.aspx&pageID=13&clanakID=3254 (last acess: 29 Jan­u­ary 2009).
[35] Petra Kostan­jšak: “Sarkozy: Euro­zone needs the eco­nom­ic gov­ern­ment”, Vjes­nik, 6 Novem­ber 2008, p. 23.
[36] Gojko Dril­jača: “Europe in pan­ic from the cred­it col­lapse”, Večern­ji list, 7 Octo­ber 2008, p. 16.
[37] Ves­na Roller: “The gov­ern­ment must cut the life on debt”, 8 Octo­ber 2008, avail­able at: http://glasistre.hr/?d27f361163cf2826d0d2bcdc50149c52,TS,4032,4083,20546,27180,255718 (last access: 25 Feb­ru­ary 2009).
[38] Ves­na Roller: “The gov­ern­ment must cut the life on debt”, 8 Octo­ber 2008, avail­able at: http://glasistre.hr/?d27f361163cf2826d0d2bcdc50149c52,TS,4032,4083,20546,27180,255718 (last access: 25 Feb­ru­ary 2009).
[39] Juri­ca Kör­bler: “Gov­ern­ment and CNB have done every­thing to be safe”, Vjes­nik, 16 Octo­ber 2008, p. 3.
[40] “Speech by Pres­i­dent Mesić on the 16th Croa­t­ian Soci­ety of Econ­o­mists Con­fer­ence”, 12 Novem­ber 2008, avail­able at: http://www.predsjednik.hr/default.asp?ru=345&gl=200811120000003&sid=&jezik=1 (last access: 25 Feb­ru­ary 2009).
[41] Luka Capar, “The world and the cri­sis  after the G20 sum­mit – With­out spe­cif­ic mea­sures for eco­nom­ic recov­ery”, Vjes­nik, 20 Novem­ber 2008, p. 22.
[42] Bruno Lopandić: “The cri­sis and the inte­gra­tions”, Vjes­nik, 22 and 23 Novem­ber 2008, p. 24.
[43] Bruno Lopandić: “Every­one in the euro­zone”, Diplo­mat­ic por­tal, Vjes­nik, , 29 and 30 Novem­ber 2008, pp. 24.
[44] Ines Sabal­ić: “The finan­cial cri­sis push­es Ire­land to Europe”, Slo­bod­na Dal­maci­ja, 18 Octo­ber 2008, avail­able at: http://www.slobodnadalmacija.hr/Svijet/tabid/67/articleType/ArticleView/articleId/26523/Default.aspx (last access: 25 Feb­ru­ary 2009).
[45] Milan Lazare­vić: “Ire­land, due to the cri­sis for the Lis­bon agree­ment”, Jutarn­ji list, 27 Novem­ber 2008, p. 8.
[46] “Rehn: finan­cial cri­sis will not slow down the Croa­t­ian acces­sion to the EU”, 13 Novem­ber 2008, avail­able at: http://www.poslovni.hr/98448.aspx (last access: 25 Feb­ru­ary 2009).
[47] Sil­vana Oruč Ivoš: “Jad­ran­ka Kosor: Despite all the dif­fi­cul­ties, we need to work hard­er and faster on the com­ple­tion of nego­ti­a­tions”, Vjes­nik, 1 Decem­ber 2008, pp. 4–5.
[48] Ines Sablić: “Against reces­sion – by demand”, Slo­bod­na Dal­maci­ja, 28 Novem­ber 2008, p. 15.
[49] Lju­bi­ca Gatar­ić: “The Euro­pean mod­el and Croa­t­ia”, Večern­ji list, 27 Novem­ber 2008, p. 3.
[50] Jovan Drag­išić: “Will the finan­cial cri­sis have an impact on Croa­t­ia? Of course it will”, 5 Octo­ber 2008, avail­able at: http://www.index.hr/vijesti/clanak.aspx?id=404732 (last access: 25 Feb­ru­ary 2009).
[51] Miho Dobrašin: “Euro will soon become ques­tion­able cur­ren­cy”, 9 Decem­ber 2008, avail­able at: http://www.poslovni.hr/103024.aspx (last access: 25 Feb­ru­ary 2009).
[52] Dinko Boić: “Croa­t­ian Bank Asso­ci­a­tion: The finan­cial cri­sis will leave deep and long last­ing mark in Croa­t­ia”, 4 Novem­ber 2008, avail­able at: http://business.hr/Default2.aspx?ArticleID=de2c6919-c9b2-4995-ba48-f3fd7d61234a&open=sec (last access: 25 Feb­ru­ary 2009).