Fight against corruption in Croatia intensifies

The fight against cor­rup­tion remains a top pri­or­i­ty of the gov­ern­ment, as this area is con­di­tion sine qua non if the nego­ti­a­tions with the EU are to be com­plet­ed by the end of 2010. The gov­ern­ment had strived to have some tan­gi­ble results from its inten­si­fied efforts with a hope that the nego­ti­at­ing chap­ter num­ber 23 on judi­cia­ry and fun­da­men­tal rights would final­ly be opened at the begin­ning of June 2010. This chap­ter remained closed for nego­ti­a­tions until ful­fil­ment of pre­con­di­tions set by the Euro­pean Coun­cil: a) a full coop­er­a­tion with the Inter­na­tion­al Crim­i­nal Tri­bunal for the for­mer Yugoslavia (ICTY) in The Hague and b) demon­strat­ed abil­i­ty of the gov­ern­ment to sys­tem­at­i­cal­ly fight against cor­rup­tion. The stum­bling stone for open­ing this nego­ti­at­ing chap­ter with the EU had been the inabil­i­ty of the Croa­t­ian gov­ern­ment to deliv­er the mil­i­tary artillery log­books request­ed by the prosecutor’s office of the ICTY in The Hague, which would serve as evi­dence that no exces­sive artillery was used while lib­er­at­ing the Croa­t­ian city Knin dur­ing the lib­er­at­ing oper­a­tion “Storm” in 1995, for which some Croa­t­ian gen­er­als were indict­ed.

The deter­mi­na­tion to com­bat cor­rup­tion and abuse of posi­tion in the high­est gov­ern­ing struc­tures has increased since the new Prime Min­is­ter Jad­ran­ka Kosor took office in July 2009. Since then, Croa­t­ia wit­nessed the arrest, impris­on­ment and inves­ti­ga­tion of high­ly ranked gov­ern­ment offi­cials, includ­ing the Vice-Pres­i­dent of the gov­ern­ment, the Min­is­ter of the Econ­o­my, Labour and Entre­pre­neur­ship Damir Polančec, and sev­er­al top man­agers of state-owned enter­pris­es such as Hrvats­ka elek­tro­privre­da (Croa­t­ian Elec­tric­i­ty Com­pa­ny – HEP), Hrvatske auto­ces­te (Croa­t­ian Motor­ways – HAC), Hrvats­ka poš­tan­s­ka ban­ka (Croa­t­ian Postal Bank – HPB) and Podrav­ka, an inter­na­tion­al­ly rep­utable food pro­cess­ing com­pa­ny. The gov­ern­ment is now rac­ing time to process these cas­es in front of courts and the sit­u­a­tion is addi­tion­al­ly aggra­vat­ed by the fact that the Min­ster of Inte­ri­or Ivan Šimonovic will soon leave his posi­tion as min­is­ter in order to assume an impor­tant inter­na­tion­al func­tion in the UN as Deputy Sec­re­tary-Gen­er­al. Šimonović is one of the rare polit­i­cal­ly inde­pen­dent experts in the present Croa­t­ian gov­ern­ment, but regret­tably will leave this unfin­ished agen­da to his suc­ces­sor, most like­ly a mem­ber of the rul­ing Croa­t­ian Demo­c­ra­t­ic Union (HDZ).11Jele­na Lovric: Bad tim­ing for depar­ture of a good min­is­ter, Jutran­ji list, 6 May 2010, p. 23. In this text the author argues that this is a hard blow on Kosor’s team and that Simonovic skills and expert author­i­ty would be very much missed. Also his most like­ly suc­ces­sor Dražen Bošn­jaković is a HDZ par­ty mem­ber and his inde­pen­dence would be doubt­ful. To show its strong ded­i­ca­tion and deter­mi­na­tion the gov­ern­ment adopt­ed a revised action plan to com­bat cor­rup­tion and organ­ised crime in March 2010. Prime Min­is­ter Jad­ran­ka Kosor declared a “zero tol­er­ance to crime”, while also pre­sent­ing 145 mea­sures which are to be imple­ment­ed by all min­istries, but espe­cial­ly those which receive sub­stan­tial gov­ern­ment fund­ing as providers of state aid or var­i­ous incen­tive schemes – areas tra­di­tion­al­ly infect­ed by cor­rup­tion.22Gov­erne­ment of Repub­lic of Croa­t­ia: Gov­ern­ment approved Revised Action Plan to Com­bat Cor­rup­tion, 18 March 2010, avail­able at: http://www.vlada.hr/hr/naslovnica/novosti_i_najave/2010/ozujak/vlada_prihvatila_revidirani_akciji_plan_za_suzbijanje_korupcije (last access: 17 May 2010).

Apart from judi­cia­ry reform and the fight against cor­rup­tion and organ­ised crime, ship­build­ing and inef­fi­cient pub­lic admin­is­tra­tion remain the main prob­lems that have to be solved pri­or to Croatia’s full mem­ber­ship in the EU as often quot­ed by Euro­pean Coun­cil doc­u­ments on Croatia’s progress and also by the Head of the EU Del­e­ga­tion in Croa­t­ia, Paul Van­doren.33Ship­build­ing, Judi­cia­ry and Pub­lic Admin­is­tra­tion, inter­view with Paul Van­doren, avail­able at: http://www.delhrv.ec.europa.eu/files/file/intervjui/PV%20-%20jutarnji%20list%2016_02_2010_.pdf (last access: 12 May 2010). Since the start of the nego­ti­a­tions, all thir­ty-three nego­ti­a­tion chap­ters have been opened, of which twen­ty have been pro­vi­sion­al­ly closed. At the acces­sion con­fer­ence held in Brus­sels on 19 April 2010, Croa­t­ia was able to pro­vi­sion­al­ly close only chap­ter 1 on free move­ment of goods.44See the state­ment at the Del­e­ga­tion of the EU to the Repub­lic of Croa­t­ia, avail­able at: http://www.delhrv.ec.europa.eu/?lang=en&content=2416 (last access: 14 May 2010). The last three chap­ters: Judi­cia­ry and Fun­da­men­tal Rights, Com­pe­ti­tion Pol­i­cy and For­eign, Secu­ri­ty and Defence Pol­i­cy were final­ly open at the acces­sion con­fer­ence on 30 June 2009.55Kosor: Croa­t­ia in the last 500 meters of the EU marathon, Dnevno.hr, 30 June 2010, avail­able at: http://www.dnevno.hr/vijesti/hrvatska/kosor_hrvatska_na_posljednjih_500_metara_maratona_prema_eu_/64317.html (last access: 5 July 2010).

The government’s Economic Recovery Programme Introduced: yet another hard year ahead

On 19 April 2010, the gov­ern­ment final­ly intro­duced the long await­ed Eco­nom­ic Recov­ery Pro­gramme, an anti-reces­sion­ary pack­age of pol­i­cy mea­sures with an aim to cre­ate a push towards faster eco­nom­ic recov­ery in Croa­t­ia.66Gov­ern­ment of Repub­lic of Croa­t­ia: Eco­nom­ic Recov­ery Pro­gramme, April 2010, avail­able at: http://www.vlada.hr/en/naslovnica/novosti_i_najave/2010/travanj/predsjednica_vlade_predstavila_program_gospodarskog_oporavka (last access: 17 May 2010). The pro­gramme encom­pass­es a mix of long and short term eco­nom­ic and social mea­sures in the areas of fis­cal pol­i­cy, the func­tion­ing of pub­lic admin­is­tra­tion, state prop­er­ty man­age­ment, judi­cia­ry reform, social secu­ri­ty and the pen­sion sys­tem, research and inno­va­tion capac­i­ties, etc. Many Croa­t­ian ana­lysts, both from aca­d­e­m­ic and busi­ness cir­cles, would con­sid­er the government’s pro­gramme a very much delayed and “bet­ter late than nev­er” move in the right direc­tion.77Damir Kus­trak, Pres­i­dent of the Croa­t­ian Employ­ers Asso­ci­a­tion: Inter­view, 101 Radio, 17 May 2010, 9. a.m. More crit­i­cal views were received from oppo­si­tion par­ty leader Zoran Milanovic (Social Demo­c­ra­t­ic Par­ty – SDP), who argues that the recov­ery plan is more a list of wish­es, “a half elab­o­rat­ed elec­toral pro­gramme”, and that it would be fair for the gov­ern­ment to call for new elec­tions and leave imple­men­ta­tion to the new gov­ern­ment.88Portal.hr: SDP describes eco­nom­ic recov­ery pro­gramme as wish list, 26 April 2010, avail­able at: http://daily.tportal.hr/64436/SDP-describes-economic-recovery-programme-as-wish-list.html (last access: 17 May 2010). Aca­d­e­m­ic ana­lysts such as Kata­ri­na Ott, Insti­tute of Pub­lic Finance, were point­ing towards the absence of a strict action plan which would make the pro­gramme oper­a­tional and deter­mine who does what and in what term.99Kata­ri­na Ott, Direc­tor of Insti­tute of Pub­lic Finance: Which gov­ern­ment should we trust? (in Croa­t­ian), avail­able at: http://www.ijf.hr/osvrti/20.pdf (last access: 17 May 2010). In this com­ment she crit­i­cised not only the absence of an action plan, but also incon­sis­ten­cy of some eco­nom­ic mea­sures. She also argued that the pro­gramme is incon­sis­tent with oth­er pre­vi­ous­ly intro­duced mea­sures which focus on pro­vid­ing spe­cial finan­cial assis­tance and loans to dis­tressed enter­pris­es. The ini­tial reac­tions com­ing from busi­ness and aca­d­e­m­ic cir­cles encour­aged the gov­ern­ment to come up with an action plan for eco­nom­ic recov­ery rel­a­tive­ly quick­ly there­after.1010Eco­nom­ic Recov­ery Pro­gramme Oper­a­tional Plan, avail­able at: http://www.vlada.hr/hr/preuzimanja/publikacije/plan_provedbenih_aktivnosti_programa_gospodarskog_oporavka (last access: 17 May 2010). The pro­gramme did not receive enthu­si­as­tic, but rather tight, sup­port from both employ­ers and trade unions in the pub­lic sec­tor, as it required fur­ther sac­ri­fices in terms of wages. Lat­er on, abol­ish­ment of Christ­mas and hol­i­days’ bonus­es and rene­go­ti­at­ing the terms of col­lec­tive agree­ments for work­ers in the pub­lic sec­tor become an issue of open con­flict of the trade unions with the Gov­ern­ment. 1111The Unions strong­ly opposed to pro­posed changes in Labour Law which would enable an end and rene­go­ti­a­tion of the present Col­lec­tive agree­ment for work­ers in the pub­lic sec­tor. They organ­ised a writ­ten sup­port of over 800,000 Croa­t­ian cit­i­zens call­ing for a ref­er­en­dum on the Law. See: Croa­t­ian Trade Union Asso­ci­a­tion, Kosor said “no”: ref­er­en­dum fol­lows! avail­able at: http://www.hus.hr/?p=1104#more-1104 (last access: 6 July 2010). But they wel­comed the gov­ern­ment deci­sion to block fur­ther ero­sion of pur­chas­ing pow­er of the low­er-income pop­u­la­tion, which brought abol­ish­ment of the “cri­sis tax” intro­duced in July 2009, whose effects were in essence pro-reces­sion­ary and fur­ther stran­gu­lat­ed the econ­o­my. Gov­er­nor Rohatin­s­ki wel­comed the adop­tion of the Recov­ery Pro­gramme, as it takes seri­ous­ly the need for sig­nif­i­cant­ly reduc­ing the fis­cal deficit and bal­ance of pay­ment deficit, which would, as a result stim­u­late exports, ratio­nalise domes­tic con­sump­tion and increase sav­ings – issues he often reit­er­at­ed as a way out of the cri­sis.1212Željko Rohatin­s­ki: Addi­tion­al liq­uid­i­ty yes, but only to pro­duc­tion, 6 Jan­u­ary 2010, avail­able at: http://www.seebiz.eu/hr/makroekonomija/hrvatska/zeljko-rohatinski-dodatna-likvidnost,-ali-samo-u-proizvodnju,65193.html (last access: 19 May 2010). As opposed to most Cen­tral and East­ern Euro­pean coun­tries, Croa­t­ia has not yet reached the turn­ing point out of the reces­sion and it seems that the recov­ery will be very slow and pro­tract­ed. As the new Euro­pean Bank for Recon­struc­tion and Devel­op­ment (EBRD) data show, in 2010, the Cen­tral and East­ern Europe (CEE) coun­tries would grow on aver­age around 3.7 per­cent while Croa­t­ia could expect only a 0.3 per­cent growth rate.1313Etic Berglof Chief econ­o­mist: EBRD fore­casts for tran­si­tion coun­tries, pre­sent­ed by at the EBRD Annu­al Meet­ing in Zagreb 14–15 May 2010, avail­able at: http://www.bankamagazine.hr/Naslovnica/EBRDvijesti/tabid/381/View/Details/ItemID/59835/ttl/Hrvatska-Procijenjeni-rast-BDP-a-u-2010-snizen-na-03-posto/Default.aspx (last access: 17 May 2010). See also the inter­view with Peter San­fey: EBRD lead econ­o­mist for SEE and Croa­t­ia, Jutarn­ji list, 15 May 2010, pp. 6–7. The Insti­tute of Eco­nom­ics Zagreb data on the first quar­ter of 2010 also indi­cate that the turn­ing point has not yet been reached, that growth in this year could still be neg­a­tive, and that vis­i­ble recov­ery of Gross Domes­tic Prod­uct (GDP) is expect­ed only in 2011.1414Eco­nom­ic Insti­tute Zagreb: Croa­t­ian Eco­nom­ic Out­look Quar­ter­ly no. 42, avail­able at: http://www.eizg.hr/AdminLite/FCKeditor/UserFiles/File/Priopcenje-CroatianEconomicOutlook-travanj-2010.pdf (last access: 17 May 2010). There are only weak signs of recov­ery in indus­tri­al pro­duc­tion and exports in the first quar­ter of 2010, while con­struc­tion activ­i­ty, which has been an engine of growth in the past years, fur­ther dives and retail trade stag­nates.1515Ibid., p. 2. In short, yet anoth­er bleak year is ahead.

President Josipovic’s diplomatic offensive to improve relations with neighbours

In Jan­u­ary 2010, Ivo Josipovic, a can­di­date from the Social Demo­c­ra­t­ic Par­ty (SDP), was elect­ed new Croa­t­ian Pres­i­dent, win­ning 60.3 per­cent of the votes. He suc­ceed­ed Stjepan Mesic after 10 years as Pres­i­dent of Croa­t­ia. Since he took office in Feb­ru­ary 2010, Pres­i­dent Ivo Josipovic inten­si­fied for­eign pol­i­cy efforts towards improv­ing rela­tions with neigh­bour­ing coun­tries in the West­ern Balka­ns, espe­cial­ly with Bosnia and Herze­gov­ina and Ser­bia. Apart from meet­ing Ser­bian pres­i­dent Boris Tadić in March, which was also inten­sive­ly cov­ered by the media, Ivo Josipovic received a great deal of atten­tion from the inter­na­tion­al and domes­tic polit­i­cal elite, the media and the gen­er­al pub­lic with his speech deliv­ered in Ahmi­ci, Bosnia and Herze­gov­ina, which paid trib­ute to war vic­tims,1616For details, see the State­ment of Pres­i­dent Josipovic, avail­able at: http://www.predsjednik.hr/15042010-Ahmici (last access: 14 May 2010). and his address to the par­lia­men­tary assem­bly in Sara­je­vo.1717Address of Pres­i­dent Josipovic at the Par­lia­men­tary Assem­bly of Bosnia and Herze­gov­ina in Sara­je­vo, avail­able at: http://www.predsjednik.hr/14042010-Sarajevo02 (last access: 14 May 2010). He apol­o­gised for the Croa­t­ian pol­i­tics led by for­mer Pres­i­dent Fran­jo Tudj­man dur­ing the 1990s, which might have con­tributed to the con­flicts and suf­fer­ings in Bosnia and Herze­gov­ina dur­ing the 1990s. His speech steered a lot of pub­lic and polit­i­cal debate in Croa­t­ia as Ivo Josipovic’ apolo­gies were not received well by the HDZ hard-lin­ers, but also some of its top gov­ern­ment fig­ures. Ini­tial­ly, it was also received with unease by the Prime Min­is­ter Jad­ran­ka Kosor, but lat­er on they man­aged to “agree to dis­agree” on the mat­ter. On the oth­er hand, the President’s speech was very much wel­comed by the main inter­na­tion­al actors and part­ners such as the EU and USA and is con­sid­ered by most aca­d­e­m­ic ana­lysts and the media as a good basis for a qual­i­ta­tive shift of polit­i­cal focus from the past to the future.

Pres­i­dent Josipovic’s addi­tion­al step in the ini­tia­tive to strength­en trust and improve rela­tions with neigh­bours in the region was by vis­it­ing Repub­li­ka Srp­s­ka in Bosnia and Herze­gov­ina and meet­ing with Prime Min­is­ter Milo­rad Dodik in Der­ven­ta at the end of May 2010.1818State­ment of the Office of the Pres­i­dent of Repub­lic of Croa­t­ia, avail­able at http://www.predsjednik.hr/30052010-Derventa (last access: 2 July 2010). They espe­cial­ly talked about open issues, such as the return of Croa­t­ian refugees to their homes in Repub­li­ka Srp­s­ka.

    Footnotes

  • 1Jele­na Lovric: Bad tim­ing for depar­ture of a good min­is­ter, Jutran­ji list, 6 May 2010, p. 23. In this text the author argues that this is a hard blow on Kosor’s team and that Simonovic skills and expert author­i­ty would be very much missed. Also his most like­ly suc­ces­sor Dražen Bošn­jaković is a HDZ par­ty mem­ber and his inde­pen­dence would be doubt­ful.
  • 2Gov­erne­ment of Repub­lic of Croa­t­ia: Gov­ern­ment approved Revised Action Plan to Com­bat Cor­rup­tion, 18 March 2010, avail­able at: http://www.vlada.hr/hr/naslovnica/novosti_i_najave/2010/ozujak/vlada_prihvatila_revidirani_akciji_plan_za_suzbijanje_korupcije (last access: 17 May 2010).
  • 3Ship­build­ing, Judi­cia­ry and Pub­lic Admin­is­tra­tion, inter­view with Paul Van­doren, avail­able at: http://www.delhrv.ec.europa.eu/files/file/intervjui/PV%20-%20jutarnji%20list%2016_02_2010_.pdf (last access: 12 May 2010).
  • 4See the state­ment at the Del­e­ga­tion of the EU to the Repub­lic of Croa­t­ia, avail­able at: http://www.delhrv.ec.europa.eu/?lang=en&content=2416 (last access: 14 May 2010).
  • 5Kosor: Croa­t­ia in the last 500 meters of the EU marathon, Dnevno.hr, 30 June 2010, avail­able at: http://www.dnevno.hr/vijesti/hrvatska/kosor_hrvatska_na_posljednjih_500_metara_maratona_prema_eu_/64317.html (last access: 5 July 2010).
  • 6Gov­ern­ment of Repub­lic of Croa­t­ia: Eco­nom­ic Recov­ery Pro­gramme, April 2010, avail­able at: http://www.vlada.hr/en/naslovnica/novosti_i_najave/2010/travanj/predsjednica_vlade_predstavila_program_gospodarskog_oporavka (last access: 17 May 2010).
  • 7Damir Kus­trak, Pres­i­dent of the Croa­t­ian Employ­ers Asso­ci­a­tion: Inter­view, 101 Radio, 17 May 2010, 9. a.m.
  • 8Portal.hr: SDP describes eco­nom­ic recov­ery pro­gramme as wish list, 26 April 2010, avail­able at: http://daily.tportal.hr/64436/SDP-describes-economic-recovery-programme-as-wish-list.html (last access: 17 May 2010).
  • 9Kata­ri­na Ott, Direc­tor of Insti­tute of Pub­lic Finance: Which gov­ern­ment should we trust? (in Croa­t­ian), avail­able at: http://www.ijf.hr/osvrti/20.pdf (last access: 17 May 2010). In this com­ment she crit­i­cised not only the absence of an action plan, but also incon­sis­ten­cy of some eco­nom­ic mea­sures.
  • 10Eco­nom­ic Recov­ery Pro­gramme Oper­a­tional Plan, avail­able at: http://www.vlada.hr/hr/preuzimanja/publikacije/plan_provedbenih_aktivnosti_programa_gospodarskog_oporavka (last access: 17 May 2010).
  • 11The Unions strong­ly opposed to pro­posed changes in Labour Law which would enable an end and rene­go­ti­a­tion of the present Col­lec­tive agree­ment for work­ers in the pub­lic sec­tor. They organ­ised a writ­ten sup­port of over 800,000 Croa­t­ian cit­i­zens call­ing for a ref­er­en­dum on the Law. See: Croa­t­ian Trade Union Asso­ci­a­tion, Kosor said “no”: ref­er­en­dum fol­lows! avail­able at: http://www.hus.hr/?p=1104#more-1104 (last access: 6 July 2010).
  • 12Željko Rohatin­s­ki: Addi­tion­al liq­uid­i­ty yes, but only to pro­duc­tion, 6 Jan­u­ary 2010, avail­able at: http://www.seebiz.eu/hr/makroekonomija/hrvatska/zeljko-rohatinski-dodatna-likvidnost,-ali-samo-u-proizvodnju,65193.html (last access: 19 May 2010).
  • 13Etic Berglof Chief econ­o­mist: EBRD fore­casts for tran­si­tion coun­tries, pre­sent­ed by at the EBRD Annu­al Meet­ing in Zagreb 14–15 May 2010, avail­able at: http://www.bankamagazine.hr/Naslovnica/EBRDvijesti/tabid/381/View/Details/ItemID/59835/ttl/Hrvatska-Procijenjeni-rast-BDP-a-u-2010-snizen-na-03-posto/Default.aspx (last access: 17 May 2010). See also the inter­view with Peter San­fey: EBRD lead econ­o­mist for SEE and Croa­t­ia, Jutarn­ji list, 15 May 2010, pp. 6–7.
  • 14Eco­nom­ic Insti­tute Zagreb: Croa­t­ian Eco­nom­ic Out­look Quar­ter­ly no. 42, avail­able at: http://www.eizg.hr/AdminLite/FCKeditor/UserFiles/File/Priopcenje-CroatianEconomicOutlook-travanj-2010.pdf (last access: 17 May 2010).
  • 15Ibid., p. 2.
  • 16For details, see the State­ment of Pres­i­dent Josipovic, avail­able at: http://www.predsjednik.hr/15042010-Ahmici (last access: 14 May 2010).
  • 17Address of Pres­i­dent Josipovic at the Par­lia­men­tary Assem­bly of Bosnia and Herze­gov­ina in Sara­je­vo, avail­able at: http://www.predsjednik.hr/14042010-Sarajevo02 (last access: 14 May 2010).
  • 18State­ment of the Office of the Pres­i­dent of Repub­lic of Croa­t­ia, avail­able at http://www.predsjednik.hr/30052010-Derventa (last access: 2 July 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.