European economic policy, the financial and economic crisis and its consequence for Croatia

The financial package to assist Greece received with relief, but worries remain

The news on the Greek debt cri­sis was received by the Croa­t­ian gov­ern­ment, busi­ness cir­cles, and aca­d­e­m­ic and finan­cial ana­lysts with great con­cerns and with fears of a spill over effect on the region. The fear was there­by stronger con­sid­er­ing the fact that the cri­sis could endan­ger the whole mon­e­tary and eco­nom­ic archi­tec­ture of the EU and cause the first exit of a coun­try from the Eco­nom­ic and Mon­e­tary Union (EMU).11Ban­ka Mag­a­zine: Greek cri­sis dis­tress­es the EU, 29 Jan­u­ary 2010, avail­able at: http://www.bankamagazine.hr/Naslovnica/Vijesti/Komentariianalize/tabid/138/View/Details/ItemID/57191/ttl/Grcka-kriza-trese-eurozonu/Default.aspx (last access: 17 May 2010). Croa­t­ian ana­lysts and media close­ly mon­i­tored the sequence of events in the process of con­cil­i­at­ing on the issue of the mech­a­nism for help­ing Greece. Most of the ini­tial debates and reports were focused on the reac­tions com­ing from Ger­many and whether the EU will react at all to pro­vide help to Greece in order to avoid Greece’s poten­tial bank­rupt­cy and pre­vent the cri­sis from spilling over to oth­er coun­tries.22Hina: On the Eve of the EU Sum­mit: The agree­ment on pro­vid­ing help to Greece achieved, 11 Feb­ru­ary 2010, avail­able at: http://dalje.com/hr-svijet/postignut-dogovor-o-pomoci-grckoj/293805 (last access: 17 May 2010). At the begin­ning of dis­cus­sions on the finan­cial pack­age, every report stressed that the EU does not fore­see assis­tance for the Euro­zone mem­bers on the verge of nation­al bank­rupt­cy and there­fore the Greek finan­cial cri­sis threat­ens not only the Euro­zone, but also the entire EU.33Tea Šupe: Dra­go Munjiz: Europe will not allow Greece to dis­rupt the Euro and EU, 5 March 2010, avail­able at: http://dalje.com/hr-hrvatska/europa-nece-dozvoliti-da-grcka-srusi-euro-i-eu/296541 (last access: 17 May 2010). Luka Brk­ić, pro­fes­sor at the Fac­ul­ty of Polit­i­cal Sci­ence, Zagreb, was con­fi­dent, how­ev­er, that the EU will do every­thing pos­si­ble in order to save Greece and pre­vent poten­tial spill over of debt crises to oth­er mem­ber states. He argues that the stake would oth­er­wise be too high because the fall of the Euro would lead to the col­lapse of the EU. He con­sid­ers the dan­ger from a domi­no effect real­is­tic, thus mak­ing this fear com­plete­ly jus­ti­fied. Brk­ić also point­ed out that there are some sys­temic errors in the foun­da­tions of the Eco­nom­ic and Mon­e­tary Union.44Edi­ta Vla­hović Žuvela: EU is sav­ing itself through Greece, 6 May 2010, avail­able at: http://www.bankamagazine.hr/default.aspx?TabId=138&View=Details&ItemID=59623 (last access: 18 May 2010). Borislav Škegro, for­mer Min­is­ter of Finance of Croa­t­ia and one of the authors of the Croa­t­ian pro­gramme for eco­nom­ic recov­ery, stressed the fact that Greece con­scious­ly fal­si­fied its data, rely­ing on the assump­tion that Ger­many would pro­vide help with the main goal of sav­ing the Euro.55Greece lied assum­ing there will be Hal­lo, Deutsch­land to save the euro, 4 May 2010, avail­able at: http://www.business.hr/hr/Naslovnica/Politika/Grcka-je-lagala-znajuci-da-ce-biti-Hallo-Deutschland-spasavaj-euro!?homesrclink=preporuke (last access: 18 May 2010).

As else­where in the region, many Croa­t­ian experts espe­cial­ly focused on the issue of to which extent the Greek cri­sis would affect Croatia’s econ­o­my. Željko Rohatin­s­ki, gov­er­nor of the Croa­t­ian Nation­al Bank, point­ed out that Croa­t­ia could draw some lessons from the most trou­bled coun­tries at present – Greece, Spain, Por­tu­gal and Ire­land – for long-term growth, which could not be dri­ven sole­ly on the expan­sion of domes­tic demand, the con­struc­tion sec­tor and inter­na­tion­al loans. Accord­ing to Rohatin­s­ki, the sit­u­a­tion in these coun­tries high­light­ed the impor­tance of the poli­cies that the Croa­t­ian Nation­al Bank under­took in the last five to six years. Oth­er­wise, the Croa­t­ian indi­ca­tors would be very sim­i­lar to the Greek ones. He stressed that there is no alter­na­tive to cut­ting gov­ern­ment expen­di­tures for the year of 2010.66Rohatin­s­ki: There is no exit from the cri­sis with­out cut­ting the gov­ern­ment expen­di­tures, 16 Feb­ru­ary 2010, avail­able at: http://www.jutarnji.hr/zeljko-rohatinski-i-kriza–da-hnb-nije-reagirao–hrvatska-bi-bila-duzna-kao-grcka/566776/ (last access: 19 May 2010). Rohatin­s­ki also stat­ed that the Greek exam­ple is a clear mes­sage that no one will help you if you are not capa­ble of help­ing your­self.77Rohatin­s­ki: This will be the year of stag­na­tion and sur­vival, 12 April 2010, avail­able at: http://www.jutarnji.hr/rohatinski–ovo-ce-biti-godina-stagnacije-i-prezivljavanja–naucimo-lekciju-od-grcke-/708937/ (last access: 19 May 2010). Boris Vujčić, vice-gov­er­nor of the Croa­t­ian Nation­al Bank, warns that the fear from the Greek sce­nario is not unjus­ti­fied, but that Croa­t­ia is still not threat­ened by it and that the sit­u­a­tion is cur­rent­ly sta­bil­is­ing.88Boris Vujčić: Greek case is not threat­en­ing, at least not in the short run, 2 May 2010, avail­able at: http://www.seebiz.eu/hr/makroekonomija/hrvatska/boris-vujcic-grcki-scenarij-ne-prijeti,-barem-ne-u-kratkom-roku,76360.html (last access: 18 May 2010). Croa­t­ian Min­is­ter of Finance Ivan Šuk­er strong­ly holds that there will be no cri­sis spill over to Croa­t­ia, and that Croa­t­ia is not faced with the Greek syn­drome.99Šuk­er argues that Croa­t­ia is not threat­ened by the Greek syn­drome, 29 April 2010, avail­able at: http://metro-portal.hr/vijesti/hrvatska/suker-uvjerava-da-hrvatskoj-ne-prijeti-sindrom-grcke (last access: 18 May 2010). On the oth­er side, Zdeslav Šan­tić, eco­nom­ic ana­lyst from Split­s­ka Ban­ka Soci­ete Gen­erale Group, believes that the Greek cri­sis will cer­tain­ly have con­se­quences in a wider range of coun­tries.1010Croa­t­ia in seri­ous dan­ger from Greek cri­sis, 29 April 2010, avail­able at: http://www.tportal.hr/biznis/gospodarstvo/65873/Hrvatska-u-ozbiljnoj-opasnosti-zbog-grcke-krize.html (last access: 18 May 2010). Mir­jana Turudić, Croa­t­ian Cham­ber of Econ­o­my, point­ed out that spill over from the Greek cri­sis on the Croa­t­ian econ­o­my will be lim­it­ed due to rel­a­tive­ly small for­eign trade with Greece.1111Experts: Greek cri­sis will not have influ­ence on Croa­t­ia, 30 April 2010, avail­able at: http://www.slobodnadalmacija.hr/Hrvatska/tabid/66/articleType/ArticleView/articleId/100949/Default.aspx (last access: 18 May 2010). Željko Per­ić, one of the advi­sors of Croa­t­ian Prime Min­is­ter Jad­ran­ka Kosor, stat­ed that Croa­t­ia is not direct­ly threat­ened by the Greek cri­sis and that the con­se­quences could only be felt if this cri­sis sig­nif­i­cant­ly slows down the recov­ery of key EU economies or caus­es seri­ous finan­cial cri­sis in Europe. How­ev­er, they will be direct­ly reflect­ed through the cost of future debts.1212Ibid.

The final agree­ment on the finan­cial pack­age com­bin­ing bilat­er­al loans from the Euro­zone and financ­ing through the Inter­na­tion­al Mon­e­tary Fund has been received in Croa­t­ia with relief. Both eco­nom­ic and polit­i­cal ana­lysts often empha­sised that this is more of a polit­i­cal than mon­e­tary issue, which changes the rules of the game with­in the EU. From this aspect, Ger­many is no longer seen as accept­ing the role of Euro­pean trea­sur­er or cashier, while the oppo­nents claim that Ger­many ignores the prin­ci­ples of sol­i­dar­i­ty and col­lec­tive­ness. There was a lot of pub­lic atten­tion focused on this issue.1313Juri­ca Kör­bler: Merkel calls for new rules with­in the Euro­zone, Vjes­nik, 25 March 2010, avail­able at: http://www.vjesnik.hr/html/2010/03/25/ClanakTx.asp?r=tem&c=4 (last access: 18 May 2010). Ana­lysts assess that Angela Merkel has stood firm in her inten­tion of dic­tat­ing the terms of the res­o­lu­tion of the largest cri­sis in the Euro­zone1414Slo­bod­na Dal­maci­ja: Greek cri­sis also caused the iden­ti­ty cri­sis of the EU, 25 March 2010, avail­able at: http://www.slobodnadalmacija.hr/Svijet/tabid/67/articleType/ArticleView/articleId/96720/Default.aspx (last access: 18 May 2010). and that Germany’s motives are not just to pre­vent Greece from going bank­rupt, but also to demon­strate its ded­i­ca­tion to Euro­pean ideals and to pre­serve the sta­bil­i­ty of the Euro.1515Mar­ti­na Čizmić: Three con­di­tions that Ger­many requires for help­ing Greece: hope­less sit­u­a­tion, IMF and stricter rules, Nacional, 23 March 2010, avail­able at: http://www.nacional.hr/clanak/80257/tri-njemacka-uvjeta-za-pomoc-grckoj-bezizlazna-situacija-mmf-i-stroza-pravila (last access: 18 May 2010). The jour­nal­ist Ines Sabal­ić of the Croa­t­ian busi­ness jour­nal Ban­ka elab­o­rat­ed the issue of Ger­man lead­er­ship with­in the con­text of the EU’s dis­agree­ment con­cern­ing the Greek cri­sis. Sabal­ić stress­es that crit­i­cism and demands toward Ger­many are some­what con­tra­dic­to­ry – they all want it to lead, but not on the path designed by itself and per­haps with dif­fer­ent goals on the agen­da. Ger­mans do not believe that their role as the strongest EU engine is respect­ed enough.1616Ines Sabal­ić: They require the impos­si­ble from Ger­many, Ban­ka, 2 April 2010, pp. 44–49. In the end, Ger­many promised to par­tic­i­pate in the finan­cial pack­age for Greece with the main motives of pre­serv­ing the sta­bil­i­ty of the com­mon cur­ren­cy and demon­strat­ing its full ded­i­ca­tion to Euro­pean ideals.1717Mar­ti­na Čizmić: Three con­di­tions that Ger­many requires for help­ing Greece: hope­less sit­u­a­tion, IMF and stricter rules, Nacional, 23 March 2010, avail­able at: http://www.nacional.hr/clanak/80257/tri-njemacka-uvjeta-za-pomoc-grckoj-bezizlazna-situacija-mmf-i-stroza-pravila (last access: 18 May 2010). The sig­nif­i­cance of the achieved agree­ment was also under­lined by the polit­i­cal week­ly Nacional by quot­ing the Mem­ber of the Euro­pean Cen­tral Bank’s (ECB) Exec­u­tive Board, Bini Smaghi, who stat­ed that the arrange­ment on help­ing Greece rep­re­sents a turn­ing point in the cri­sis, adding that the state­ments on the break­ing up of the Euro­zone and the inabil­i­ty of Greece in pay­ing its debt are quite absurd.1818Bini Smaghi: The arrange­ment on the help to Greece rep­re­sents a turn­ing point in this cri­sis, Nacional, 15 April 2010, avail­able at: http://www.nacional.hr/clanak/81777/bini-smaghi-dogovor-o-pomoci-grckoj-predstavlja-prekretnicu-u-krizi (last access: 18 May 2010).

The Stability and Growth Pact shows visible cracks

The fun­da­men­tal issues con­cern­ing reform of the pact’s rules, by which any future cri­sis could be pre­vent­ed and in the worst sce­nario some coun­tries could be exclud­ed from the EMU, were in Croa­t­ia more dis­cussed by ana­lysts and media then by the polit­i­cal elite, nei­ther from the rul­ing gov­ern­ment nor the oppo­si­tion. It was often under­lined that the EU must learn some lessons from the Greek case and to arrange insti­tu­tion­al mech­a­nism which would be in charge of deal­ing with such issues,1919Greek debt cri­sis divides Europe, 21 March 2010, avail­able at: http://www.poslovni.hr/142805.aspx (last access: 17 May 2010). espe­cial­ly since there are some oth­er EU coun­tries whose large debts rep­re­sent the lat­est aggra­vat­ing point in the cri­sis. The reform of the Sta­bil­i­ty and Growth Pact is rather urgent, as it appeared to be inef­fi­cient and did not suc­ceed in pre­vent­ing the cur­rent sit­u­a­tion. Charles Wyplosz, the lead­ing expert for mon­e­tary issues, stressed in his arti­cle in Ban­ka that the pact could pri­mar­i­ly be strength­ened by work­ing towards a com­mon fis­cal EU pol­i­cy. The only solu­tion would then be to trans­fer part of the respon­si­bil­i­ty of nation­al par­lia­ments to the Euro­pean Par­lia­ment, which would require a com­plete­ly new pact.2020Charles Wyplosz: The facts and myths of Greek cri­sis, Ban­ka, 11 Feb­ru­ary 2010, avail­able at: http://www.bankamagazine.hr/Naslovnica/Kolumne/Biznisifinancije/tabid/296/View/Details/ItemID/57541/Default.aspx (last access: 17 May 2010). Croa­t­ian ana­lysts also stressed that adopt­ing stricter Inter­na­tion­al Mon­e­tary Fund (IMF) rules and effec­tive penal­ties and mea­sures for pre­vent­ing large indebt­ed­ness must be ensured, even at the cost of reform­ing the Lis­bon Treaty.2121Mar­ti­na Čizmić: Three con­di­tions that Ger­many requires for help­ing Greece: hope­less sit­u­a­tion, IMF and stricter rules, Nacional, 23 March 2010, avail­able at: http://www.nacional.hr/clanak/80257/tri-njemacka-uvjeta-za-pomoc-grckoj-bezizlazna-situacija-mmf-i-stroza-pravila (last access: 17 May 2010). The media reac­tions also echoed how Angela Merkel often points out that the Greek cri­sis revealed defects with­in the Euro­zone, since it endan­gered the sta­bil­i­ty of the Euro and that Ger­many does not back down from the com­plex reform of Euro­pean agree­ments. The dai­ly news­pa­per Poslovni dnevnik stressed that a rea­son why Ger­many ini­ti­at­ed nec­es­sary changes of com­mit­ments to EU arrange­ments is pre­cise­ly to increase sur­veil­lance and sanc­tion­ing of vio­la­tion of bud­get deficit lim­i­ta­tion. It is obvi­ous that Merkel con­di­tions finan­cial help to Greece by chang­ing the rules of Sta­bi­liza­tion and Growth Pact.2222Tomis­lav Pili: Euro­zone reform as a con­di­tion for help­ing Greece, Poslovni dnevnik, 26 March 2010, avail­able at: http://www.poslovni.hr/143351.aspx (last access: 17 May 2010).

Europe in need of stronger coordination of economic policies: but in which form?

As seen by most eco­nom­ic ana­lysts, the cri­sis revealed evi­dence that the Euro­zone is an unfin­ished insti­tu­tion­al agen­da and that there should also be oth­er instru­ments which could coor­di­nate fis­cal pol­i­cy.2323Charles Wyplosz: The facts and myths of Greek cri­sis, Ban­ka, 11 Feb­ru­ary 2010, avail­able at: http://www.bankamagazine.hr/Naslovnica/Kolumne/Biznisifinancije/tabid/296/View/Details/ItemID/57541/Default.aspx (last access: 17 May 2010). Vladimir Glig­orov, eco­nom­ic ana­lyst and advi­sor to the for­mer Croa­t­ian Pres­i­dent Mesić, argues that the EU def­i­nite­ly needs a sta­bil­i­sa­tion pol­i­cy. He sug­gests two solu­tions: first, to increase the degree of fis­cal inter­de­pen­dence, and sec­ond, to devel­op a fund which could inter­vene in the case of a cri­sis. How­ev­er, at the moment, it is not quite clear how a poten­tial instru­ment for such inter­ven­tions should be designed.2424Vladimir Glig­orov: Changes in EU Con­sti­tu­tion are much need­ed, 5 April 2010, avail­able at: http://www.jutarnji.hr/vladimir-gligorov–promjene-u-eu-ustavu-su-nuzne/688839/ (last access: 18 May 2010).

Polit­i­cal­ly, the glob­al cri­sis rep­re­sents an enor­mous chal­lenge for the EU, since it has nei­ther a com­mon eco­nom­ic gov­er­nance nor a fis­cal pol­i­cy.2525Josch­ka Fis­ch­er: Merkel case – Mrs Europe or Mrs Ger­many?, 26 March 2010, avail­able at: http://www.bankamagazine.hr/Naslovnica/Kolumne/Biznisifinancije/tabid/296/View/Details/ItemID/58601/Default.aspx?ttl=Slucaj-Merkel—gospoda-Europa-ili-gospoda-Njemacka%3F (last access: 17 May 2010). Croa­t­ian media gave a lot of atten­tion to French Pres­i­dent Nico­las Sarkozy’s opin­ion that Europe needs some form of eco­nom­ic gov­er­nance that would act as a coun­ter­bal­ance to the Euro­pean Cen­tral Bank (ECB). In the past, Ger­mans have usu­al­ly reject­ed those argu­ments, but the Ger­man Min­is­ter of Finance has now tabled the motion of form­ing a Euro­pean Mon­e­tary Fund (EMF), which would func­tion sim­i­lar­ly to the IMF. The dis­ad­van­tage of this motion is that it requires the reform of Euro­pean treaties for which rat­i­fi­ca­tion in all states is need­ed. On the oth­er hand, Howard Davies, for­mer vice-gov­er­nor of the Bank of Eng­land believes that Euro­pean eco­nom­ic gov­er­nance is not need­ed at all. What is need­ed is reach­ing the col­lec­tive arrange­ment on fis­cal dis­ci­pline and revival of Sta­bil­i­ty and Growth Pact. Also Otmar Iss­ing, chief econ­o­mist of the ECB, argues that the Sta­bil­i­ty and Growth Pact has all the rules nec­es­sary for the func­tion­ing of the EMU, and that there is no need for macro­eco­nom­ic pol­i­cy coor­di­na­tion. Europe does not need a French plan for coor­di­na­tion of tax pol­i­cy or anoth­er IMF. It needs fis­cal dis­ci­pline which would pre­vent oth­er coun­tries from get­ting by with­out any con­se­quences.2626Howard Davies: Total mess, Banka.hr, 25 April 2010, avail­able at: http://www.bankamagazine.hr/default.aspx?TabId=296&View=Details&ItemID=59363 (last access: 17 May 2010).

Con­sid­er­able pub­lic atten­tion in Croa­t­ia was giv­en to the Span­ish head of gov­ern­ment José Luis Rodríguez Zapatero’s pro­pos­al to estab­lish the Euro­pean eco­nom­ic gov­er­nance as spe­cial rep­re­sen­ta­tion for coor­di­na­tion of eco­nom­ic poli­cies com­pe­tent for intro­duc­ing sanc­tions to those mem­ber states not com­ply­ing with the Sta­bil­i­ty and Growth Pact (or the Europe 2020 Strat­e­gy). How­ev­er, ana­lysts con­sid­er such pro­pos­als as just test­ing the inter­nal pulse of the EU. The media report­ed on the posi­tions of José Manuel Bar­roso and Her­man Van Rompuy, who do not sup­port Zap­a­tero in his idea of Euro­pean eco­nom­ic gov­ern­ment. Fur­ther­more, Olli Rehn does not reject the idea of estab­lish­ing a high com­mit­tee for the econ­o­my, i.e., he sup­ports the estab­lish­ment of a spe­cif­ic body for mon­i­tor­ing and con­trol­ling eco­nom­ic move­ments. Accord­ing to Rehn, there is a void in the sys­temic sur­veil­lance of eco­nom­ic risks, but fill­ing it could poten­tial­ly cre­ate anti-Euro­pean pub­lic sen­ti­ments.2727Sil­vi­je Tomaše­vić: EU still with­out the Min­is­ter of Econ­o­my, Poslovni dnevnik, 14 Jan­u­ary 2010, avail­able at: http://www.poslovni.hr/136971.aspx (last access: 17 May 2010). The Croa­t­ian Min­istry of For­eign Affairs deliv­ered an inter­view explain­ing Bar­roso posi­tion. He sug­gest­ed a type of mech­a­nism which would guar­an­tee that indi­vid­ual coun­tries could fol­low the fun­da­men­tal prin­ci­ple of fis­cal sta­bil­i­ty. He rejects Sarkozy’s pro­pos­al on the estab­lish­ment of an eco­nom­ic gov­ern­ment and stress­es that there will cer­tain­ly not be one; the only thing that can be done is to improve the process of pol­i­cy-mak­ing. In the inter­view, Bar­roso point­ed out that by the act of estab­lish­ing firmer eco­nom­ic gov­er­nance, France would like to lim­it the role and inde­pen­dence of the Euro­pean Cen­tral Bank.2828Min­istry of For­eign Affairs and Euro­pean Inte­gra­tion: The pres­i­dent of the Euro­pean Com­mis­sion, Jose Manuel Bar­roso, points out that none of the states can be exclud­ed from the Euro­zone, 19 March 2010, avail­able at: http://www.mvpei.hr/ei/default.asp?ru=1&gl=201003220000005&sid=&jezik=1 (last access: 17 May 2010).

Europe 2020 Strategy – a good business plan, but needs more resolute implementation actions

The Croa­t­ian pub­lic was very much inter­est­ed in the new Europe 2020 Strat­e­gy, which should replace the Lis­bon Strat­e­gy accept­ed in 2000.2929Fran­jo Štiblar: For a world with­out crises, 16 March 2010, avail­able at: http://www.bankamagazine.hr/Naslovnica/Vijesti/Intervju/tabid/245/View/Details/ItemID/58343/Default.aspx (last access: 17 May 2010). The Europe 2020 Strat­e­gy is pre­sent­ed in the media as a good busi­ness plan, but the ques­tion is whether it can be applied. The Strat­e­gy gives hope, at least on paper, since there are a lot of issues still to be dis­cussed, but it is seen as use­less if the main EU actors will not start with its imple­men­ta­tion.3030Eurocham­bres: Europe 2020: good busi­ness plan, but is it applic­a­ble? (in Croa­t­ian), 10 March 2010, avail­able at: http://www.radovi.net/index.php?option=com_content&view=article&id=1147:europa-2020-dobar-posloni-plan-ali-da-li-se-moe-primijeniti&catid=117:ekonomija&Itemid=231 (last access: 17 May 2010). Com­ments fre­quent­ly point out that the key for its suc­cess is mon­i­tor­ing indi­vid­ual coun­tries’ progress through instru­ments pro­vid­ed by the Strat­e­gy as well as through the Sta­bil­i­ty and Growth Pact.3131Croa­t­ian Par­lia­ment: News from the EU, 8 March 2010, avail­able at: http://www.sabor.hr/Default.aspx?art=32588 (last access: 17 May 2010). In addi­tion, the Europe 2020 Strat­e­gy is seen as a vision for the improve­ment of the Euro­pean social mar­ket devel­op­ment mod­el. To achieve the set goals, it will be nec­es­sary to take actions and ini­tia­tives on all – EU, mem­ber states and local – lev­els of gov­er­nance, as well as to affirm lead­er­ship and cred­i­bil­i­ty.3232Goran Jurum: Bar­roso admit­ted the Lis­bon strat­e­gy fail­ure, 4 March 2010, avail­able at: http://www.seebiz.eu/hr/politika/barroso-priznao-poraz-lisabonske-strategije,69919.html (last access: 17 May 2010). Their views on the Strat­e­gy are also shared by the Croa­t­ian employ­ers asso­ci­a­tion (HUP), point­ing towards Euro­pean com­pet­i­tive­ness as the key to sus­tain­able eco­nom­ic recov­ery. The Euro­pean eco­nom­ic and social mod­el offers a sol­id basis for trans­form­ing these chal­lenges into oppor­tu­ni­ties for devel­op­ment. In order to achieve this, strong polit­i­cal lead­er­ship and firm com­mit­ment to reform are much need­ed.3333How to get Europe back on the right track: Euro­pean strat­e­gy for growth and employ­ment after the year 2010, Feb­ru­ary 2010, avail­able at: http://www.hup.hr/homehr/meunarodni-odnosi-i-projekti/eu-i-businesseurope/aktualno-iz-businesseurope.aspx (last access: 17 May 2010). The pub­lic inter­est was also direct­ed towards the com­par­i­son of this Strat­e­gy ver­sus the Lis­bon Strat­e­gy. The nov­el­ties in this Strat­e­gy, in com­par­i­son with the Lis­bon Strat­e­gy, are poten­tial cor­rec­tive mea­sures, which would include reduc­ing sub­si­dies from EU funds. On the oth­er hand, it is being recog­nised that such mea­sures would erode pub­lic sup­port from the EU. Fur­ther­more, to induce mem­ber states to fol­low the set guide­lines, the most appro­pri­ate solu­tion would be to reward those mem­ber states which apply them through addi­tion­al funds. Addi­tion­al­ly, the Euro­pean Com­mis­sion could also send warn­ings to coun­tries vio­lat­ing the com­mon prin­ci­ples.3434Hina, On the Eve of the EU Sum­mit: The agree­ment on pro­vid­ing help to Greece achieved, 11 Feb­ru­ary 2010, avail­able at: http://dalje.com/hr-svijet/postignut-dogovor-o-pomoci-grckoj/293805 (last access: 17 May 2010).

    Footnotes

  • 1Ban­ka Mag­a­zine: Greek cri­sis dis­tress­es the EU, 29 Jan­u­ary 2010, avail­able at: http://www.bankamagazine.hr/Naslovnica/Vijesti/Komentariianalize/tabid/138/View/Details/ItemID/57191/ttl/Grcka-kriza-trese-eurozonu/Default.aspx (last access: 17 May 2010).
  • 2Hina: On the Eve of the EU Sum­mit: The agree­ment on pro­vid­ing help to Greece achieved, 11 Feb­ru­ary 2010, avail­able at: http://dalje.com/hr-svijet/postignut-dogovor-o-pomoci-grckoj/293805 (last access: 17 May 2010).
  • 3Tea Šupe: Dra­go Munjiz: Europe will not allow Greece to dis­rupt the Euro and EU, 5 March 2010, avail­able at: http://dalje.com/hr-hrvatska/europa-nece-dozvoliti-da-grcka-srusi-euro-i-eu/296541 (last access: 17 May 2010).
  • 4Edi­ta Vla­hović Žuvela: EU is sav­ing itself through Greece, 6 May 2010, avail­able at: http://www.bankamagazine.hr/default.aspx?TabId=138&View=Details&ItemID=59623 (last access: 18 May 2010).
  • 5Greece lied assum­ing there will be Hal­lo, Deutsch­land to save the euro, 4 May 2010, avail­able at: http://www.business.hr/hr/Naslovnica/Politika/Grcka-je-lagala-znajuci-da-ce-biti-Hallo-Deutschland-spasavaj-euro!?homesrclink=preporuke (last access: 18 May 2010).
  • 6Rohatin­s­ki: There is no exit from the cri­sis with­out cut­ting the gov­ern­ment expen­di­tures, 16 Feb­ru­ary 2010, avail­able at: http://www.jutarnji.hr/zeljko-rohatinski-i-kriza–da-hnb-nije-reagirao–hrvatska-bi-bila-duzna-kao-grcka/566776/ (last access: 19 May 2010).
  • 7Rohatin­s­ki: This will be the year of stag­na­tion and sur­vival, 12 April 2010, avail­able at: http://www.jutarnji.hr/rohatinski–ovo-ce-biti-godina-stagnacije-i-prezivljavanja–naucimo-lekciju-od-grcke-/708937/ (last access: 19 May 2010).
  • 8Boris Vujčić: Greek case is not threat­en­ing, at least not in the short run, 2 May 2010, avail­able at: http://www.seebiz.eu/hr/makroekonomija/hrvatska/boris-vujcic-grcki-scenarij-ne-prijeti,-barem-ne-u-kratkom-roku,76360.html (last access: 18 May 2010).
  • 9Šuk­er argues that Croa­t­ia is not threat­ened by the Greek syn­drome, 29 April 2010, avail­able at: http://metro-portal.hr/vijesti/hrvatska/suker-uvjerava-da-hrvatskoj-ne-prijeti-sindrom-grcke (last access: 18 May 2010).
  • 10Croa­t­ia in seri­ous dan­ger from Greek cri­sis, 29 April 2010, avail­able at: http://www.tportal.hr/biznis/gospodarstvo/65873/Hrvatska-u-ozbiljnoj-opasnosti-zbog-grcke-krize.html (last access: 18 May 2010).
  • 11Experts: Greek cri­sis will not have influ­ence on Croa­t­ia, 30 April 2010, avail­able at: http://www.slobodnadalmacija.hr/Hrvatska/tabid/66/articleType/ArticleView/articleId/100949/Default.aspx (last access: 18 May 2010).
  • 12Ibid.
  • 13Juri­ca Kör­bler: Merkel calls for new rules with­in the Euro­zone, Vjes­nik, 25 March 2010, avail­able at: http://www.vjesnik.hr/html/2010/03/25/ClanakTx.asp?r=tem&c=4 (last access: 18 May 2010).
  • 14Slo­bod­na Dal­maci­ja: Greek cri­sis also caused the iden­ti­ty cri­sis of the EU, 25 March 2010, avail­able at: http://www.slobodnadalmacija.hr/Svijet/tabid/67/articleType/ArticleView/articleId/96720/Default.aspx (last access: 18 May 2010).
  • 15Mar­ti­na Čizmić: Three con­di­tions that Ger­many requires for help­ing Greece: hope­less sit­u­a­tion, IMF and stricter rules, Nacional, 23 March 2010, avail­able at: http://www.nacional.hr/clanak/80257/tri-njemacka-uvjeta-za-pomoc-grckoj-bezizlazna-situacija-mmf-i-stroza-pravila (last access: 18 May 2010).
  • 16Ines Sabal­ić: They require the impos­si­ble from Ger­many, Ban­ka, 2 April 2010, pp. 44–49.
  • 17Mar­ti­na Čizmić: Three con­di­tions that Ger­many requires for help­ing Greece: hope­less sit­u­a­tion, IMF and stricter rules, Nacional, 23 March 2010, avail­able at: http://www.nacional.hr/clanak/80257/tri-njemacka-uvjeta-za-pomoc-grckoj-bezizlazna-situacija-mmf-i-stroza-pravila (last access: 18 May 2010).
  • 18Bini Smaghi: The arrange­ment on the help to Greece rep­re­sents a turn­ing point in this cri­sis, Nacional, 15 April 2010, avail­able at: http://www.nacional.hr/clanak/81777/bini-smaghi-dogovor-o-pomoci-grckoj-predstavlja-prekretnicu-u-krizi (last access: 18 May 2010).
  • 19Greek debt cri­sis divides Europe, 21 March 2010, avail­able at: http://www.poslovni.hr/142805.aspx (last access: 17 May 2010).
  • 20Charles Wyplosz: The facts and myths of Greek cri­sis, Ban­ka, 11 Feb­ru­ary 2010, avail­able at: http://www.bankamagazine.hr/Naslovnica/Kolumne/Biznisifinancije/tabid/296/View/Details/ItemID/57541/Default.aspx (last access: 17 May 2010).
  • 21Mar­ti­na Čizmić: Three con­di­tions that Ger­many requires for help­ing Greece: hope­less sit­u­a­tion, IMF and stricter rules, Nacional, 23 March 2010, avail­able at: http://www.nacional.hr/clanak/80257/tri-njemacka-uvjeta-za-pomoc-grckoj-bezizlazna-situacija-mmf-i-stroza-pravila (last access: 17 May 2010).
  • 22Tomis­lav Pili: Euro­zone reform as a con­di­tion for help­ing Greece, Poslovni dnevnik, 26 March 2010, avail­able at: http://www.poslovni.hr/143351.aspx (last access: 17 May 2010).
  • 23Charles Wyplosz: The facts and myths of Greek cri­sis, Ban­ka, 11 Feb­ru­ary 2010, avail­able at: http://www.bankamagazine.hr/Naslovnica/Kolumne/Biznisifinancije/tabid/296/View/Details/ItemID/57541/Default.aspx (last access: 17 May 2010).
  • 24Vladimir Glig­orov: Changes in EU Con­sti­tu­tion are much need­ed, 5 April 2010, avail­able at: http://www.jutarnji.hr/vladimir-gligorov–promjene-u-eu-ustavu-su-nuzne/688839/ (last access: 18 May 2010).
  • 25Josch­ka Fis­ch­er: Merkel case – Mrs Europe or Mrs Ger­many?, 26 March 2010, avail­able at: http://www.bankamagazine.hr/Naslovnica/Kolumne/Biznisifinancije/tabid/296/View/Details/ItemID/58601/Default.aspx?ttl=Slucaj-Merkel—gospoda-Europa-ili-gospoda-Njemacka%3F (last access: 17 May 2010).
  • 26Howard Davies: Total mess, Banka.hr, 25 April 2010, avail­able at: http://www.bankamagazine.hr/default.aspx?TabId=296&View=Details&ItemID=59363 (last access: 17 May 2010).
  • 27Sil­vi­je Tomaše­vić: EU still with­out the Min­is­ter of Econ­o­my, Poslovni dnevnik, 14 Jan­u­ary 2010, avail­able at: http://www.poslovni.hr/136971.aspx (last access: 17 May 2010).
  • 28Min­istry of For­eign Affairs and Euro­pean Inte­gra­tion: The pres­i­dent of the Euro­pean Com­mis­sion, Jose Manuel Bar­roso, points out that none of the states can be exclud­ed from the Euro­zone, 19 March 2010, avail­able at: http://www.mvpei.hr/ei/default.asp?ru=1&gl=201003220000005&sid=&jezik=1 (last access: 17 May 2010).
  • 29Fran­jo Štiblar: For a world with­out crises, 16 March 2010, avail­able at: http://www.bankamagazine.hr/Naslovnica/Vijesti/Intervju/tabid/245/View/Details/ItemID/58343/Default.aspx (last access: 17 May 2010).
  • 30Eurocham­bres: Europe 2020: good busi­ness plan, but is it applic­a­ble? (in Croa­t­ian), 10 March 2010, avail­able at: http://www.radovi.net/index.php?option=com_content&view=article&id=1147:europa-2020-dobar-posloni-plan-ali-da-li-se-moe-primijeniti&catid=117:ekonomija&Itemid=231 (last access: 17 May 2010).
  • 31Croa­t­ian Par­lia­ment: News from the EU, 8 March 2010, avail­able at: http://www.sabor.hr/Default.aspx?art=32588 (last access: 17 May 2010).
  • 32Goran Jurum: Bar­roso admit­ted the Lis­bon strat­e­gy fail­ure, 4 March 2010, avail­able at: http://www.seebiz.eu/hr/politika/barroso-priznao-poraz-lisabonske-strategije,69919.html (last access: 17 May 2010).
  • 33How to get Europe back on the right track: Euro­pean strat­e­gy for growth and employ­ment after the year 2010, Feb­ru­ary 2010, avail­able at: http://www.hup.hr/homehr/meunarodni-odnosi-i-projekti/eu-i-businesseurope/aktualno-iz-businesseurope.aspx (last access: 17 May 2010).
  • 34Hina, On the Eve of the EU Sum­mit: The agree­ment on pro­vid­ing help to Greece achieved, 11 Feb­ru­ary 2010, avail­able at: http://dalje.com/hr-svijet/postignut-dogovor-o-pomoci-grckoj/293805 (last access: 17 May 2010).

The reports focus on a report­ing peri­od from Decem­ber 2009 until May 2010. This sur­vey was con­duct­ed on the basis of a ques­tion­naire that has been elab­o­rat­ed in March and April 2010. Most of the 31 reports were deliv­ered in May 2010.

The EU-27 Watch No. 9 receives sig­nif­i­cant fund­ing from the Otto Wolff-Foun­da­tion, Cologne, in the frame­work of the ‘Dia­log Europa der Otto Wolff-Stiftung’, and finan­cial sup­port from the Euro­pean Com­mis­sion. The Euro­pean Com­mis­sion is not respon­si­ble for any use that may be made of the infor­ma­tion con­tained therein.