The past ten years have been tough for Croatia — six consecutive years of recession in 2009-14, the near-collapse of its sprawling largest private company and several others coming under serious strain, and five different prime ministers including one ousted by a corruption scandal and several that were simply disappointing. Tens of thousands of Croatians are emigrating every year. There has also been mounting international media criticism of alleged attempts to rehabilitate Croatia’s Second World War past.
But President Kolinda Grabar-Kitarovic hopes that the national football team’s thrilling run to the World Cup final this summer will reinvigorate her country of 4.2m people.
“We need to spur that optimism in other areas,” she told bne IntelliNews in an exclusive interview in the presidential offices in Zagreb. “I’m hoping that this success will provide for similar kinds of results that — for instance — Ireland had when the World Cup in Italy in 1990 gave a boost to the rise of the Celtic tiger.” 
She distanced herself from the drumbeat of nationalism and xenophobia elsewhere in Europe, particularly in Central and Eastern Europe (CEE) and the Balkans, and called for a reassertion of “European values”, drawing on the experience of Croatia’s 1991-95 war of independence.
“Croatia is the latest member state of the EU, and one of the countries that best remembers why the European project began to begin with,” said Grabar-Kitarovic. “We remember the times of war that unfortunately for us were quite recent, we remember the times of division in Europe, of barbed wire. For quite a long time before the migration crisis, I had been warning about the erosion of values, and I had noticed that societies were closing inwards.” 
Asked whether these “European values” were the sort of exclusivist “Christian values” espoused by leaders like Viktor Orban, prime minister of neighbouring Hungary, the Croatian president said that she would not “comment on, interpret what one of my colleagues has said,” but added: “I don’t see a problem in upholding Christian values, because I think they’re in conformity with Muslim, or any other religious values — I’m talking about the mainstream.” 
Speaking at a modest circular table in a huge reception room carpeted with plush rugs in the Communist-era Pantovcak complex, she added: “For us the European project is still about values, of course it’s about the common market and economic opportunities, and the four freedoms. But it’s also about human rights, it’s about civil rights, about rights of the individual and about creating the most prosperous and the freest space in the world — that offers all of these opportunities to all people and all countries equally.” 
Cheering for Croatia 
Grabar-Kitarovic’s international profile was raised by her appearances at the World Cup, when she regularly donned the national team’s shirt and where possible eschewed VVIP areas and official flights in favour of sitting with fans. Pictures of her wearing the national strip and surrounded by fellow Croatia fans flying coach on the way to Moscow went viral as a shocking show of humility and simple fun that is so unusual for the leader of a former socialist bloc country. 
Her involvement in the World Cup also appears to have buoyed her domestic popularity considerably ahead of presidential elections due by the end of next year, in which she is widely expected to run. Polls give her a popularity rating of 67%, making her by a large margin the country’s most popular politician. While some on the left in Croatia’s polarised political landscape have accused her of behaving improperly and shamelessly using the World Cup for self-promotion, overall, Croats are satisfied with international reactions to her summer in the spotlight, says Davor Gjenero, a political commentator.
Grabar-Kitarovic is not universally popular in Croatia, however, and critics say that her wholesome international image masks a willingness to cosy up to the far right in Croatia for political reasons. For example, Velimir Bujanec, a talk show host who has been pictured parading Nazi memorabilia, was a VIP guest at her inauguration, while the president has said that controversial far-right singer Thompson — whose appearance at the World Cup celebrations in Zagreb caused controversy — is a favourite of hers.
On the other hand, some conservatives see her as an outsider with few real ties to the Croatian right. Grabar-Kitarovic’s description in February of those protesting against the visit of her Serbian counterpart Aleksandar Vucic as “marginal” caused a stir, given that many were war veterans and war widows.
Those close to the president, however, say that she has a commitment to the country and a desire to change it that is absent in too many Croatian politicians — either ideologues squabbling over history or dull technocrats with little vision.
While Grabar-Kitarovic’s constitutional powers in domestic policy are limited, she is seen as an activist president, and has been critical of the government of Prime Minister Andrej Plenkovic, despite them both hailing from the right-wing Croatian Democratic Union (HDZ).
Tensions between president and government have eased in recent weeks, however, and Grabar-Kitarovic praised the government’s handling of the crisis at Agrokor, the retail and food company that was put under state-run administration in 2017 after running up debts of HRK58bn ($9.1bn), around three times its current value. She was also upbeat on ongoing tax reforms.
Croatia’s recovery from a prolonged recession has been respectable, if not stellar. Regional bank Addiko forecasts GDP growth of 3.0% in 2018, following two consecutive years of 3.2% growth.
But while the country stands a respectable 51st in the world on the World Bank’s Doing Business rankings, the perception on the ground remains that Croatia has been sluggish in implementing economic reforms. Businesses complain about red tape, high taxes, and a lack of clarity in property rights, among other things.
“[The government is] taking the right path, and what I’d like to see continue is further tax reform aimed at reducing the cost of doing business for employers, and increasing the salaries of employees,” Grabar-Kitarovic said. “But I’d like all of us to be a bit more ambitious in setting goals not just for GDP growth but for overall development in Croatia. I think that we need to be a bit more self-assertive on the European and global stage in terms of promoting investment in Croatia, and promoting Croatia as a leader rather than a follower. And of course coupled with that is continued reform of the state administration and the necessary measures to reduce bureaucracy to the lowest level possible.” 
While the president’s influence over such slow-grind reform is largely limited to the bully pulpit, in July she presented a new initiative to tackle emigration. This includes tax reductions, pro-family measures, and changes to legislation to encourage the integration of immigrants. According to figures used by the president, 80,000 Croats left the country in 2017 alone, and the country could see its population drop by 1.1m by 2051. This is putting further strain on an economy in which the ratio of people in employment to pensioners is already 1:1.
East-west convergence 
Grabar-Kitarovic has been an advocate of the Three Seas Initiative (TSI), which seeks to strengthen the economies of CEE, particularly through improving interconnectivity in energy and transport. The Croatian president sees the TSI as a means to close the gap between the EU’s east and west, and reinvigorate the European project as a whole.
“The Three Seas Initiative is about convergence; it’s also about connectivity, cohesion, and the competitiveness of our businesses,” she said. “I believe that if we focus on improving lives and erasing the differences across the European continent we will also move a lot closer to these common values and upholding them together. The TSI is based on three pillars — building intermodal transport that exists in Western Europe but that we lack. Energy, which is a very important aspect of economic development, political independence, and political stability, and digitalisation.” 
Looking east, Grabar-Kitarovic defended her relationship with Russian President Vladimir Putin, which appears to be personally warm, and has included her calling for closer co-operation with Russia. Sberbank is Agrokor’s biggest creditor, leading to concerns over its leverage in the country, and Gazprom has been building its presence as a gas supplier to Croatia through its partnership with Croatia’s PPD, seen by some as a company with considerable political influence.
“Being an Atlanticist and maintaining a dialogue with the Russian president is in no way contradictory,” Grabar-Kitarovic said, asserting that the relationship was based on necessity, and three main areas of co-operation. Firstly, addressing crises such as Ukraine and Syria, in which Croatia supports Nato and EU policy. Secondly, the regional level, with a need for Russian support in an increasingly fractious Bosnia & Herzegovina, as a guarantor of the Dayton Peace Agreement. And thirdly, specific bilateral issues including the Agrokor crisis.
Turning finally to Croatia’s neighbours in the Western Balkans, Grabar-Kitarovic admitted that EU accession appeared “a distant prospect right now”, and said that she regretted that the European Council had not given the go-ahead to starting accession talks with Macedonia and Albania in June. While Croatia has been accused of putting roadblocks on the EU path of Serbia and Bosnia in particular, the president insisted that the country was a staunch supporter of enlargement — and called for a new terminology for the region.
“I prefer to call it the consolidation of Europe, because Europe will not be enlarging, it will be consolidation of the vacuum that we’ve created over a great area to the south and east of Croatia. I don’t like calling it the Western Balkans — I think it evokes negative feelings, it has become a global trope that signifies dissolution, war, instability. Who would want the Balkans in their own home? I prefer to call it Southeast Europe, to give it a geographically more neutral dimension, but also a broader dimension, because we’re all responsible for their accession, including Greece and Romania and Bulgaria and Hungary and Italy, to help our neighbouring countries to move forward on the EU path as soon as possible.”  

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