Croatia

   
 

Executive Summary

Governing coalition in strong position
Since mid-2017, Croatia has been governed by a coalition of the center-right Croatian Democratic Union (HDZ) and the center-left Croatian People’s Party – Liberal Democrats (HNS). The coalition has been led by Prime Minister Andrej Plenković, the chairman of the HDZ. While the coalition has enjoyed only a thin majority in the Sabor, the Croatian parliament, the government has been in a relatively strong position. For one thing, it has been able to count on the support of several independent members of parliament and those of centrist and center-right parties. Particularly striking here is the case of Zagreb mayor Milan Bandić, the leader of Bandić Milan 365 – Party of Labor and Solidarity (BM365-SRS). Although his party won only one seat in the Sabor in the last election in 2016, he managed to increase the number of members of parliament in his caucus to 11 by early November 2018 and he now has twice as many members of parliament as HNS, HDZ’s main coalition partner.
Opposition parties disunited
Also contributing to the government’s ability to maintain a strong position is the fact that the opposition parties are weak and disunited. The main opposition party, the social-democratic SDP has been going through a major crisis: divided into the supporters and opponents of the party boss Davor Bernardić, the party lost numerous members of parliament, who either left it of their own free will or were ousted. Of other political parties, the most relevant are the populist Human Blockade (Živi zid) party and the centrist Bridge of Independent Lists (Most-NL). For the time being, neither have any intention of linking themselves with the SDP.
Pressure from the
right wing
Threats to the stability of the Plenković government have thus primarily been coming from HDZ’s right wing and – in particular – the conservative non-governmental organizations that have continually challenged some of the fundamental policies advocated by Prime Minister Plenković. In April 2018, a considerable number of HDZ members of parliament opposed the adoption of the Istanbul Convention, despite the fact that the government had supported it. They explained that they were against the concept of a gender-based ideology allegedly being introduced by the Convention. In mid-June, the conservative NGOs “The People Decide” and “The Truth about Istanbul Convention” requested the Sabor to call referendums on it.
Reform pace slow; eonomic reforms have been on hold
Despite its relatively strong position, the Plenković government has been rather slow in carrying out the reforms – both those announced by itself and those required by the European Union as part of the European semester framework. In the first part of the year, the government was preoccupied with seeking a solution for Agrokor, Croatia’s largest company which had run into problems in 2017. The government’s key person for economic policymaking, Deputy Prime Minister and Minister of Economy Martina Dalić, had to leave the government in mid-May 2018 because of an alleged conflict of interest. The Agrokor settlement was reached in July, whereby two Russian banks – Sberbank and VTB bank – gained the largest shares of part ownership of the company. However, no sooner had the problem with Agrokor been solved than a problem with Pula and Rijeka shipyards arose. The shipyards were facing bankruptcy, which threatened to encumber the government budget with new expenses arising from the government guarantees given to the shipyards. All this reduced the government’s capacity to formulate and carry out the reforms that would bring a sustainable improvement of Croatia’s economic growth comparable to other countries of Central and Southeastern Europe. The government failed to make progress in increasing the competitiveness of the economy and to stimulate investment in research and development.
Continuing flaws in
quality of democracy
In political terms, the Agrokor crisis has demonstrated the co-mingling of economic and political interests in Croatia. Despite various announcements, the two Plenković governments have done little to improve the quality of democracy. They have left the large differences in the number of voters per constituency, a fundamental lack of the electoral system in Croatia, untouched and have continued to exert substantial influence on the media. During the period of review, several prominent individuals accused of corruption were acquitted, which underscores the Croatian court’s lack of effectiveness and independence. While the main anti-corruption office, the Croatian State Prosecutor’s Office for the Suppression of Organized Crime and Corruption (Ured za Suzbijanje Korupcije i Organiziranog Kriminala, USKOK), and the parliament’s commission for the conflict of interests have been quite active in opening and investigating cases, the courts have often failed to prosecute corruption, be it because of outside pressure or simply a lack of competence.
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