Croatia’s coalition government has collapsed after technocratic Prime Minister Tihomir Oreskovic lost a confidence vote held on June 16.
Croatia is in a state of political turmoil at present. President Koilinda Grabar-Kitarovic is expected to again give the Croatian Democratic Union (HDZ) - as the biggest party in the parliament - the mandate to form a new government. However, if a new prime minister is not elected by the parliament within 30 days of the collapse of the current government, the president will have to call early elections. The HDZ claims it has a new coalition in place, and wants Finance Minister Zdravko Maric to be the new prime minister.
Tim Ash from Nomura Securities said on June 16 that he sees it as market positive if Maric is confirmed as prime minister within 30 days, with the HDZ-Most coalition re-jigged. Ash sees early elections as mildly negative in the short-term, and the expected outcome would be a win for the opposition Social Democratic Party (SDP).
125 deputies in the 250-seat parliament voted against Oreskovic, Jutarnji reported. The confidence vote had been called by the HDZ, shortly after the SDP filed a no-confidence motion against HDZ leader and Deputy Prime Minister Tomislav Karamarko.
Karamarko resigned from his post on June 15, hours after the parliamentary conflict of interest committee said that he had been guilty of a conflict of interest over his wife’s business links to a lobbyist working for the Hungarian energy company MOL.
Karamarko’s resignation from the deputy prime minister post is believed to be a part of the strategy of the Patriotic Coalition, led by the HZD, in advance of new rounds of coalition talks following the fall of the current government. However, HDZ leader has lost prestige even within his own party after the decision against him.
On June 14, the government cancelled a scheduled cabinet session and the Patriotic Coalition leaders held a separate meeting to discuss future coalition plans. It is not yet clear how the HDZ has managed to put together a new majority. Early elections still seem to be a strong possibility looking at the current parliamentary arithmetic, although a possible snap election seems unlikely to bring about a radically different result from last November’s election, and is even less likely to address Croatia’s deep-seated economic challenges.
On the other hand, Ash pointed out in a note earlier on June 15 that, “Neither the HDZ or the Most really want early elections given their diminishing poll ratings, so some deal will be done to sustain Zdravko Maric in office, either with a formal majority or in minority capacity with tacit support of the Most.”
Most previously made Karamarko's resignation a condition for its continued support for the coalition. However, even if Most decides to remain within the coalition, the HDZ's Patriotic Coalition and Most still do not have majority in the parliament.
Domagoj Ivan Milosevic, secretary general of the HDZ, claimed on June 9 that the party had the support of a sufficient number of deputies in the parliament to regroup the parliamentary majority and carry out a government reshuffle. Milosevic did not identify HDZ’s new coalition partners, resulting in some scepticism about his claim to have a new majority lined up. Milosevic later said on June 14 that the Patriotic Coalition currently has 68 deputies, including 59 HDZ deputies.
HDZ vice president Oleg Butkovic commented on June 10 that the party would not have nominated Maric as prime minister-designate had it not been sure of the new parliamentary majority.
Meanwhile, the SDP has started collecting signatures to dissolve parliament. The main opposition party aims to collect a majority of at least 76 MPs, to force the parliament speaker to put the item on the agenda. SDP leader Zoran Milanovic claimed on June 10 that the party already had enough signatures, and that early elections were also favoured by 70% of the electorate, according to a party statement.
Milanovic said on June 10 that Most’s support would be essential if early elections are to be called.