bne -

Croatia as expected voted on January 22 in favour of joining the EU, though the poor turnout for the referendum was a clear indication of how the problems in the crisis-ridden bloc and the interminable accession process have combined to lessen the appeal of the bloc to many Croatians. Few entertain much hope that EU membership will resolve the country's more immediate problems - it was simply the only option available.

Croatia's state referendum commission said that 66% of those who took part in the referendum, an apathetic 43.5% of eligible voters, answered "yes" to the question: "Do you support the membership of the Republic of Croatia in the European Union?" About 33% were against, while the rest of the ballots were invalid.

The EU's current tumult makes membership, expected in July 2013, far from a thrilling prospect, but it's no worse than tackling Croatia's economic woes in isolation. Unemployment stands at 13% and over 30% among under 25s, while the economy is set to shrink by 1% this year, according to the World Bank. "This should be good news for the economy more generally, albeit the economy has other problems at the moment - low growth, deep structural problems, including a fundamental lack of competitiveness and inflexible labour markets, weak banking sector and lack of credit growth - which a weak EU cannot really help over night," says Tim Ash of RBS. "All hope is on the new centre-left government elected in December - that they can kick start growth through a far reaching reform agenda."

Despite the gloomy outlook, there has been real progress since the EU membership application was made in 2003, according to Stefan Fule, the European Enlargement Commissioner. "Croatia is a different country now," he tells bne, while acknowledging there is still "work to be done."

Some of the remaining work involves falling into line with EU competition policy by privatising shipyards, among other things. Other areas on Croatia's EU to-do list, Fule says, are in the areas of the judiciary and fundamental rights, and justice, freedom and security.

With the laws and institutional structures already in place, the challenge is one of implementation, a phase of reform for which Bulgaria and Romania have been widely criticised after entering the EU in 2007. Croatia will be different, Fule says, thanks to a new negotiating method that required Croatia to adopt a "systematic use of benchmarks for all areas."

But the Commission is not expecting to go on benchmarking Croatia after accession. "After accession, Croatia will be subject to the general EU mechanisms for ensuring the respect of EU law," says Fule. In any case the European Commission's experience shows that "transformation is an irreversible process."

Extreme opposition

With all parliamentary parties backing EU entry, opposition came from the political fringes, mostly the far-right. The Party of Rights lost its place in parliament having campaigned against EU-membership in December's election. Some from this extreme see the EU as guilty for the International Criminal Tribunal's April conviction of their hero General Ante Gotovina for war crimes during the break-up of the former Yugoslavia, while others see the EU as a sinister Jewish financial conspiracy.

But there is some opposition to EU membership from the radical left too, including 26-year-old activist and author Srecko Horvat. For him, the referendum is an illustration of how the EU uses a democratic deficit to steamroll members into adopting neo-liberal policies. "You have a referendum after everything is already settled. You didn't have a referendum in 2003 when Croatia applied for EU membership. You didn't have a referendum in 2005 when Croatia officially opened negotiations with the EU." There was no referendum either in 2010 when the constitution was changed to fit EU entry criteria. And now, he says, even the Social Democrat-led government, which took over in December's election, is pressing ahead with neo-liberal privatisation policies at the EU's behest.

The idea that joining the EU will clean up corruption is dubious, Horvat argues, pointing out that corruption allegations against Ivo Sanader, a former Croatian prime minister, involved EU companies - an Austrian bank and Hungarian oil company.

Given Croatia's high level of youth unemployment, "Maybe the EU will soon be joined by Croatian 'Indignados' and instead of a stronger Europe, you will have a stronger protest movement," he says hopefully.