Croatian Finance Minister Maric survives no-confidence vote

Croatian Finance Minister Maric survives no-confidence vote
By Akin Nazli in Belgrade May 4, 2017

Croatian Finance Minister Zdravko Maric very narrowly survived a no-confidence vote held on May 4, an encouraging outcome for the Croatian Democratic Union (HDZ), although the survival of its government is still on a knife-edge.

The no-confidence vote against Maric was expected to indicate the ability of HDZ to form a new majority in the parliament after party’s coalition with the Bridge of Independent Lists (Most) collapsed last week. 

MPs were evenly split in the confidence vote, with 75 voting in favour of Maric while another 75 voted against him.

Maric kept his post thanks partly to independent MP Zeljko Glasnovic, who was not present at the vote. This prevented the opposition from reaching the 76 votes required to oust the finance minister.

Tomislav Saucha, a former member of the opposition Social Democratic Party (SDP), surprisingly voted in favour of Maric. Saucha said he was aiming to avoid a snap election and to maintain political stability in the Adriatic country.

In a strongly worded statement after the vote, deputy speaker and HDZ secretary-general Gordan Jandroković referred to the “institutional terror” of Most leader and parliament speaker Bozo Petrov. “It's not a respectable result, but Marić remains,” he added, commenting on the vote.

The motion was originally filed against Maric because of his former role as an executive at Agrokor, the Croatian food and retail giant now hit by a debt crisis. The SDP filed the motion, which resulted in the ruling coalition splitting as Most ministers declined to back Maric. 

Following the vote, the Adriatic country’s political future is still blurry. Most submitted around a motion to dissolve the parliament at around midnight on May 3, during a marathon debate. The SDP also supports the idea of snap elections. 

Meanwhile, the HDZ wants to oust Petrov from the influential position of parliament speaker. Last week, the party collected 79 supporting this aim. Petrov did not leave his seat to any of his HDZ deputy speakers during the 17 hour debate on May 3, or during the debates on May 4. Had he done so, one of the HDZ deputy speakers was expected to put the motion against Petrov to a vote that he would most probably have lost.

SDP has also filed no-confidence motions against three HDZ deputy speakers and Economy Minister Martina Dalic, the latter over conflict of interest in the Agrokor case.

The order of the motions in the parliament will determine the future of the HDZ-led government. If the party manages to oust Petrov, it could avoid a parliamentary vote for yet another snap poll. However, if Petrov, still parliament speaker, manages to put the Most-backed motion to dissolve the parliament on the agenda, the result is definitely uncertain.

Further uncertainty is still on the table over the HDZ’s ability to form a new parliament majority to appoint new ministers. Three former Most ministers – Interior Minister Vlaho Orepic, Minister of Justice Anto Sprlje and Energy Minister Slaven Dobrovic – returned to the parliament on May 4. 

The HDZ needs support of at least 76 MPs to replace them, and it currently has 61 MPs in the 151-seat parliament. If Prime Minister and HDZ leader Andrej Plenkovic manages to attract the support of 15 MPs from other parties, he will be able to form a new coalition government.

Plenkovic is currently expected to form a new – though slim – majority in the parliament. However, it would be so slim as to keep the sword of Damocles hovering over the new Plenkovic cabinet.

Teneo Intelligence CEE adviser Andrius Tursa forecast on April 28 that Plenkovic would be able to form a new majority, but added that, “seeking a stronger mandate, Plenkovic could also call for a formation of the national unity government, involving all major parties in parliament”.

“Snap elections cannot be ruled-out, but remain unlikely at this point. Croatians have held two general polls since November 2015 and there is little public and political appetite for another one. Moreover, party ratings have remained largely stable in the past seven months, indicating a similar distribution of MPs were new parliamentary elections to be called,” Tursa added. 

The uncertainty will be further prolonged as the Croatian parliament is expected to leave for a two week break on May 5 until the end of the first round of the local elections to be held on May 21. Plenkovic previously denied the split from Most was linked to the upcoming polls. If a snap poll is held, it would most likely be on June 6 together with the second round of local elections. Otherwise, it could be delayed until September.

Some of the smaller parties have already made their position on joining an HDZ-led government clear. The president of the Istrian Democratic Party (IDS), Boris Miletic, said that IDS, which has three seats in the parliament, will not support any coalition option which includes HDZ or Most. Ivan Vrdoljak, the president of the small but influential liberal-left Croatian People’s Party (HNS), has several times dismissed speculation that HNS would be part of the new coalition government.

Zagreb mayor and the leader of The Labour and Solidarity Party, Milan Bandic, said on May 1 that a reshuffle of the parliamentary majority was a done deal and that there would be no snap parliamentary election. The vice-president of the Independent Democratic Serb Party (SDSS), Milorad Pupovac, believes that all eight minority MPs would continue to support HDZ in forming new majority.

Another lengthy period of uncertainty in Croatia would most likely have an impact on investor confidence. 

“The government crisis in Croatia, which apparently threatens the coalition and potentially may trigger snap elections, would likely to exert more pressure on Eurobond market despite seemingly current stability,” wrote Raiffeisen analysts in a May 4 note. 

“[The] Agrokor solvency crisis can also add negatively to overall risk in case of political crisis leading to snap polls, so we would not be surprised to see down- ward correction in Croatia’s Eurobond prices, which trade currently at spread levels implying a BB+ rating as opposed to actual BB rating.”

The previous coalition between HDZ and Most, which was formed following the November 2015 elections, was also collapsed after the Most decided to support a no-confidence vote against the then HDZ leader and then deputy prime minister Tomislav Karamarko. However, the parties formed a second coalition after the September 2016 election under Plenkovic.