Croatia close to forming new government with technocratic PM

Croatia close to forming new government with technocratic PM
By Carmen Simion December 15, 2015

More than five weeks after the parliamentary elections, Croatia is close to forming a government with a non-partisan technocratic prime minister. The rightwing Croatian Democrat Union (HDZ) has agreed to discuss the proposal to have a technocratic premier from the Bridge of Independent Lists (Most), which came third in the elections, putting it in a kingmaker position.

Most, a grouping of independents, had been pushing for a national unity government made up of the three main groups in the new parliament, which would have forced HDZ to work with its main rival, the centre-left Social Democratic Party (SDP). However, the SDP has already rejected the possibility of being part of a government with the HDZ. This paves the way for an agreement between HDZ and Most that might lead to Croatia putting an end to the current political deadlock and forming a government.

Croatia’s November 8 elections ended inconclusively as neither of the two main coalitions - the Patriotic Coalition led by HDZ and the Croatia is Growing coalition led by the SDP - managed to secure enough seats in the parliament to form a majority. As a result, either party would need the support of Most to form a government.

“The HDZ seems to have blinked first on this Most desire to form a technocratic reform government,” said Timothy Ash of Nomura International in an analyst note. Ash adds that there is “not much clear blue Croatian water between the two parties in terms of economic policy/reform orientation in my view”. Consequently, he believes “the market is pretty sanguine between an HDZ or SDP lead in the government ... but just wants a government in place which is sufficiently focused on key reforms - basically continued fiscal consolidation, plus structural reforms to boost competitiveness, investment and growth.”

In contrast with the SDP, which was the main party in the previous ruling coalition, HDZ seems more willing to compromise to come to power. The conservatives said late on December 14 that they might even accept collaboration with members of the leftwing coalition who support reforms, according to Total Croatia News. The right-leaning Most was in any case seen as a more natural partner for the HDZ than the SDP.

However, the negotiations are not over yet. Most spokesperson Nikola Grmoja said on December 15 that the party's national council had unanimously decided to continue talks on the formation of a reformist government with the Patriotic Coalition, but it is also "leaving the door open" to talks on a non-partisan prime minister and a tripartite government with Croatia is Growing, according to Hina news agency.

Although there is no official information on possible nominations for the prime minister position, local media speculate that two economists, Zeljko Lovrincevic and Sandra Avaljek, could be considered by Most and HDZ. However, both parties have denied that Lovrincevic, a senior research fellow at the Zagreb Institute of Economics, is a candidate.

President Kolinda Grabar Kitarovic, who was backed by HDZ, has now started the third round of consultations on the nomination of the future prime minister, for which the support of 76 MPs will be required. The Patriotic Coalition gained 59 seats in the new parliament, while Most gained 19. However, internal disagreements within Most have led to three MPs leaving the party, which would leave the Patriotic Coalition and Most still two MPs short of a majority.