Croatian parliament endorses new government

By bne IntelliNews January 24, 2016

The Croatian parliament endorsed on January 22 ex-pharma executive Tihomir Oreskovic as prime minister, thus ending more than two months of negotiations and political deadlock following the inconclusive November elections, local media reported.

The vote came late in the evening and was preceded by a heated debate over some of the proposed ministers. The new cabinet line-up was endorsed with 83 votes in favour and 61 against, according  to Total Croatia News. There were also 5 abstentions, while two MPs did not vote. The new government needed the approval of 76 of the newly elected MPs to pass.

Oreskovic has pledged to increase the living standard of the Croatian population, while at the same time he assumed the difficult task to cut deficit, budget debt and employment. Croatia’s state debt reached 85.9% of GDP in the third quarter of last year, while deficit is expected to have reached around 4.5-5% of GDP in 2015.

"It is clear that it is not easy for everybody in Croatia, and a lot of people barely manage to survive. My goal is to raise everyone's living standard. I have worked with colleagues from SDP and HNS while I was the managing director of Pliva, which was the largest investor in Croatia with 250 million dollars. The former government has introduced some good reforms and they should be retained", Oreskovic said.

The new government plans to reduce public debt to less than 80% of GDP by 2020, cut deficit to less than 3% of GDP by 2017, while the average annual GDP growth should exceed 3% in 2016-2040.It should also help reduce bureaucracy in the public sector, increase the number of small and medium enterprises. Unemployment, which is above the EU average, should be cut to less than 14%. In December last year, the jobless rate stood at 17.9%.

However, the new government will benefit from the economic recovery after six consecutive years of contraction. The industry has started to recover, while expected increased investments should help growth accelerate in the coming years.

Foreign Minister Kovac will have another difficult task, to deal not only with the migrants issue – Croatia being one of the countries on the so-called Balkan route – but also with the tense relationship with the neighboring countries. 


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