Croatia’s Most divided over deputy premier's confidence vote

Croatia’s Most divided over deputy premier's confidence vote
By Akin Nazli in Belgrade May 27, 2016

The Croatian parliament will hold a non-confidence vote against Deputy Prime Minister Tomislav Karamarko, filed by the opposition Social Democratic Party (SDP), by June 18. Recent speeches from the Bridge of Independent Lists (Most), the junior coalition partner of Karamarko's Croatian Democratic Union (HDZ) show that some MPs plan to vote against Karamarko, leaving the future of the ruling coalition open to speculation.

There is a real question mark now over whether the government will be able to gather the required majority in the parliament to defend Karamarko. Most’s position will be decisive since the SDP can succeed in ousting Karamarko only if only five MPs from Most vote against him.

Bozo Petrov, leader of Most, told daily Jutarnji List on May 26 that due to his political responsibilities and the burden he has become for the government, it would be good if Karamarko withdrew from his role in the executive, Reuters reported.

The previous day, Most MP Ruzica Vukovac said that “the vast majority of Most MPs will vote against confidence in Karamarko, but every day we receive some new information, so we find it difficult to decide today”, Balkan Insight reported on May 26.

Divisions within Most mean the party’s final decision will not be clear until the vote takes place. MPs from the party, even Petrov, have previously criticised the coalition with Karamarkov’s HDZ.

Teneo Intelligence said in an e-mailed comment on May 25 that Karamarko’s dismissal would probably lead to a collapse of the coalition and cause further delays to the implementation of economic reforms.

Teneo thinks that it is likely that a majority of Most’s MPs will eventually chose to abstain and thereby tacitly support Karamarko. However, the Most leadership cannot guarantee the unity of its factionalised parliamentary club and as little as five Most votes could ensure that the no-confidence vote is successful. This lack of clarity on the outcome of the vote represents a risk for both government stability and the reform agenda, according to Teneo.

The SDP announced plans to file for the vote of confidence on May 12 after Karamarko refused to resign over allegations in the local media that his wife, Ana Karamarko, had business links with a lobbyist working for Hungarian state-owned energy company MOL.

MOL owns a 49% stake in Croatian oil and gas company INA and is also in charge of INA’s management. The Croatian government, which holds a 44.85% stake in INA, has been locked in a dispute over the company’s management and investment strategy for several years.

Local media claim that the lobbyist entered into a two-year agreement with Ana Karamarko’s public relations company for a €60,000 project.

The opposition questions Karamarko’s opposition to referring the dispute between INA and MOL to international arbitration, while Karamarko argues that the result of the international arbitration could be costly for Croatia and rejects any connection between his position and his wife’s business relations.

Croatia’s independent State Commission of Conflicts of Interest also announced on May 12 that it would investigate the alleged relationship between Karamarko and MOL.

Meanwhile, the HDZ leadership is trying to keep its options open and announced that it will only take an official position after the committee publishes its opinion on the matter, according to Teneo. There is no hard deadline for the decision of the committee, but its publication is expected before the vote.

Karamarko has repeatedly rejected the allegations, and said he would refrain from any decisions involving INA until a decision had been made by the commission. He said the move was to avoid media attacks on himself and his family.

Oreskovic said on May 12 that he was convinced Karamarko had done nothing against Croatia’s interests. The prime minister also said that he would soon appoint a team to restart talks with MOL over INA's future, without awaiting the results of the international arbitration.

The coalition came into power in January following the November 2015 elections, and holds only 76 seats in the 151-seat parliament, giving it a very slim majority especially following Most’s loss of four MPs.

This was highlighted on May 13, when the government failed for the third week running to gather the majority needed to pass legislation after three MPs from the coalition were unexpectedly absent from the parliament. The government has to gather at least 76 deputies approve any new legislation, according to Croatian law. However, the government could muster only 75 deputies on May 13.

Meanwhile, the government is continuing to initiate reforms while macroeconomic indicators, except the on-going deflationary environment, are promising. On May 11, the government decided to remove eight companies, including flag carrier Croatia Airlines and food giant Podravka, from the list of companies of strategic interest, in order to start the process of privatising its stakes in the companies.