Croatia's HDZ takes lead in general election

By bne IntelliNews November 9, 2015

bne IntelliNews -

 

Croatia’s opposition Patriotic Coalition, led by the Croatian Democrat Union (HDZ), looks to have won the general election, but the new government will be decided by the outcome of negotiations with smaller parties, preliminary results of the State Election Commission (DIP) showed early on November 9.

The Patriotic Coalition won the vote in six constituencies, including the diaspora, while the Croatia is Growing coalition led by the ruling SDP won in five constituencies. The results are based on counting the votes in 98.9% of the polling stations.

The HDZ-led coalition would get 59 seats in Croatia’s 151-member parliament, while the Croatia is Growing coalition would gain 55 seats, according to local media.

The results make the Bridge of Independent Lists (Most), which will gain 19 seats, play an important role in the future negotiations. However, the situation is complicated by Most's stance that it will not negotiate with either of the two parties, which could force the SDP and HDZ to form a grand coalition. 

"If the required reforms are not implemented, it is cheaper to have new elections than to have them damage Croatia for the next four years", Most chairman Bozo Petrov has previoulsy said. Most’s good result show that many Croatians are looking for an alternative, after the country’s disappointing economic performance and the corruption scandals around HDZ, which led to the imprisonment of former PM Ivo Sanader for accepting a  €10mn bribe.

Social Democrat Prime Minister Zoran Milanovic was the first to ask Most to join his party in forming the new government. "I invite all those that wish to implement reforms to join us, and we don't invite them as leaders, but as equal partners. We can't do this on our own, we need partners. No conditions, we just want to talk. Now we see that Most has emerged and they want reforms so I invite them to implement them together," Milanovic said late on November 8, according to Total Crotia News. 

The Patriotic Coalition is made up of eight parties: HDZ, the Croatian Peasant Party (HSS), the Croatian Party of Rights – Dr Ante Starcevic (HSP AS), the Pensioners’ Bloc (BUZ), the Croatian Social Liberal Party (HSLS), the Croatian Growth (Hrast) party, the Croatian Christian Democratic Party (HDS) and the Zagorje Democratic Party (ZDS).

The Croatia is Growing coalition consists of SDP, the Croatian People's Party – Liberal Democrats (HNS), Croatian Party of Pensioners (HSU), Croatian Labourists- the Labour Party, Authentic Croatian Peasant Party and Zagorska Party.

The Patriotic Coalition has led the polls this year, but support for it has faded in the past months, as SDP took advantage of positive macroeconomic data in the past months and announced populist measures. Moreover, the government’s relatively tolerant approach on the migrant crisis, mixed with its recent nationalist rhetoric, seems to have brought it more popularity among Croatians. A very important role was played by the government’s decision to adopt legislation envisaging the conversion of loans denominated in Swiss francs into euros, with the costs being borne by the banks. 

SDP also announced new tax cuts following the elections, and after the beginning of the year the monthly non-taxable income will be raised.  Moreover, the government also wrote off the debts of the country’s poorest citizens. 

HDZ and its Patriotic Coalition also announced tax reductions for people with low incomes, tax breaks for businesses and a reduction in the VAT. It has also demanded a tougher stance against migrants. HDZ head Tomislav Karamarko has said Croatia can no longer tolerate uncontrollable numbers of migrants.

Other parties that will go to parliament are the Istrian Democratic Party (IDS), the Croatian Democratic Alliance of Slavonia and Baranja (HDSSB), Milan Bandic’s party and Zivi Zid.

Irrespective of its composition, the new government will have a difficult task, as Croatia is expected to post the smallest GDP growth in EU this year, after six consecutive years of recession. The unemployment rate is one of the highest in the EU, at 16.2% in September, while public debt is expected to be close to 90% of GDP this year.

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