Much ado about nothing? Croatia completes EU talks

By bne IntelliNews July 21, 2011

Guy Norton in Zagreb -

After almost six years of often-tortuous negotiations, Croatia's odyssey towards EU membership ultimately turned into a 100-metre sprint at the end of what has proved to be an exhaustive marathon. A referendum of the restless Croatian population now beckons following parliamentary elections on December 4 and the signing of the accession treaty on December 9.

Six months ago, the prospect of Croatia completing negotiations with Brussels looked a distant one at best. Mired in recession and with almost daily anti-government demonstrations in the first two months of the year, which prominently featured banners proclaiming, "I love Croatia, no to EU membership", Croatia's love-hate relationship with Europe's elite politico-economic club seemed doomed to cause a further delay in the country's stop-start progress towards EU accession in 2013.

But on the last day of the EU presidency of the Hungarian government on June 30 - which ironically due to its increasingly nationalist and protectionist stance has actually been the bête noire of the EU powers that be - Croatia finally managed to bring its EU negotiations to a close, with the European Commission agreeing that the country had done enough to satisfy the existing 27 members that it was fit for purpose when it comes to meeting the hotly contested Acquis Communautaire - in layman's speak, the rules and regulations that Brussels expects each member state to adhere to.

Premier help

On a personal note, the end of EU talks undoubtedly represented a triumph for Croatian Prime Minister Jadranka Kosor, leader of a centre-right coalition government headed by her Christian Democratic Union (HDZ) party since July 2009, who had made completing negotiations with the EU the fulcrum of her political stance after she replaced Ivo Sanader two years ago.

Sanader himself will be in Croatia for the referendum on EU membership after being extradited on July 19 from Austria, where he had been languishing in prison after being arrested in December 2010 after fleeing when a Croatian warrant was issued that charged him with abuse of office and corruption. Kosor's promise that "nobody is untouchable" under an anti-graft drive since she came to power - ironically on the recommendation of Sanader - seems to have been key to convincing the EU that the country was ready for membership of the European bloc. In particular, Luxembourg's Viviane Reding, the EU justice commissioner, praised her government for the impressive progress in reforming what is frankly a still pretty ropy judicial system.

Those efforts should lead to Croatia signing its accession treaty with the EU on December 9, said Hannes Swoboda, the European Parliament's rapporteur for Croatia, with a referendum to be held on January 9. A few days before that on December 4, parliamentary elections will be held, with Croatian President Ivo Josipovic saying it was necessary to hold the elections before the referendum to avoid voters' sentiments on political parties affecting how they vote in the referendum.

Certainly, many fear a protest vote at the referendum (though not enough to derail the accession). While Kosor, who has staked her political future on the completion of EU accession negotiations, was understandably delighted with the green light from Brussels, the same can hardly be said for the Croatian populace. Although Kosor has claimed that for every euro that Croatia contributes to the EU budget, it will receive three in return, after years of inconclusive negotiations and the severe economic problems faced by a number of EU member states the average Croatian citizen remains less than enamoured with the completion of EU negotiations. According to a recent poll conducted by the Ipsos Puls market research agency on behalf of Croatia's Nova TV broadcaster, only 7% of the population was extremely pleased with the end of EU talks, 27% were satisfied, while a massive 44% were indifferent. Some 4% said they were extremely unhappy about the end of talks.

Part of the Croatian populace's indifference can be found in the fact that Ipsos Puls's research showed that a third of people don't think that joining the EU will make any difference to their living standards, while some 29% think they will actually be worse off. In the same poll, while 39% of the electorate believes that Kosor made the greatest contribution to the completion of EU talks, only 11% of Croats thought that she should sign the accession treaty on her own. Most people, 45%, believe the agreement should be signed by President Josipovic and PM Kosor together, while 30% opted for Josipovic as the sole signatory of the agreement.

With regard to the question of what difference the end of EU accession negotiations will make to Croatia's attractiveness as an investment destination, the answer - in the short term at least - is probably not much. "Croatia, remains Croatia," says Michael Glazer, chairman of the Zagreb-based investment banking boutique Aucris.

He says the country will need to do more on the anti-graft and cost competitiveness fronts if it is to move further up the foreign direct investment league tables. "Right now Croatia's stuck between a far less corrupt Slovenia and a far cheaper Serbia."

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