Books on Croatia
% of GDP
Update No: 088- (27/08/04)
Into the EU in this decade
Croatia will successfully complete its accession talks with the European Union
in 2007, according to the country's Prime Minister, Ivo Sanader.
Sanader, who was at an official visit to Bulgaria in early August, said that the
negotiations will start in 2005 and "we believe we can conclude them within
EU made Croatia an entry candidate in June. Croatia then vowed to catch up
fellow Balkan states Bulgaria and Romania, which are hoping to win membership on
Jan. 1, 2007.
In Sofia Sanader congratulated Bulgaria on its NATO entry and the successful
development of the EU negotiations. Full membership is not likely until 2008-09.
New tenders in wake of cancellation of US deal
The Sanader government is showing its European credentials by plumping for a
European, rather than American, outcome to its new highway project, a vital
boost to its tourist industry, which is shaping up to be the country's main
The Croatian government announced on August 4th that it will invite tenders for
construction of part of a new highway, after backing out of a deal with the US
firm Bechtel following pressure from the European Union.
Prime Minister Ivo Sanader said he would "propose calling a public tender
for this section of the motorway due to the wish of the public and in order to
reject all petty political suspicions," in a statement issued ahead of a
The 37-kilometer (22-mile) long section will form part of a new motorway linking
Zagreb with the southern coastal town of Split.
The Croatian media and opposition had criticized the government's decision to
award Bechtel a direct contract worth 1.2 billion kunas (163 million euros, 195
million dollars) without holding any public tender, accusing it of corruption.
The European Commission, the EU executive, said it was looking into the case to
determine whether the deal with Bechtel -- which also won lucrative contracts in
Iraq -- was in line with the law.
In 1998 Bechtel signed an earlier contract with Croatia to build 120 kilometers
of motorways worth 600 million dollars (some 500 million euros).
In Romania, Bechtel started construction last August of a 415-kilometer
(250-mile) long motorway after it obtained a deal without public tender that
also triggered strong criticism from the European Commission.
Remarkable turnabout by Hague court
In a remarkable turnabout, that will help the Zagreb government, the appeals
court of the war crimes tribunal in The Hague has thrown out the earlier
conviction of a Bosnian Croat general and reduced his sentence from 45 to 9
years. General Tihomir Blaskic, 44, who has already spent eight years four
months in a tribunal cell was immediately freed. He has already travelled to
It was a sudden and striking end in a case unlike any other in The Hague.
Blaskic has been at the center of the tribunal's most complex and longest
running procedure, with the trial lasting two years and the appeal more than
four. While others accused of war crimes in the former Yugoslavia in the 1990s
have won appeals before him, Blaskic will become the most senior official to be
In a ruling covering 289 pages, the appeals court rejected most of the lower
court's conclusions and threw out much of his earlier indictment, including
charges of crimes against humanity and war crimes against Muslims in Bosnia in
The lower court had linked him to the cold-blooded killings of civilians in half
a dozen villages, including the notorious massacre at Ahmici. But the
five-member appeals panel said the lower court had misinterpreted the law, made
factual errors, obtained insufficient evidence and meted out unfair punishment.
It upheld only three lesser counts of war crimes for not adequately protecting
detained civilians and not punishing his subordinates who had wrongfully
Russel Hayman, the American defense lawyer for the Croat general said by
telephone that after four years of appeal: 'I feel tremendous relief. My client
has his life back and this ruling will enhance the credibility of the court.'
Bosnian radio reports broadcast angry reactions from relatives of people slain
at Ahmici. One man who lost his parents said the decision made no sense and was
a political game and a mockery of justice.
Lawyers at the tribunal said the ruling would probably affect other cases now on
appeal. It is also likely to stir much discussion at the court, with its
international staff of more than 1,200. The ruling is an unusually explicit and
is strong reprimand of the work of the lower court, in particular of the senior
justice who presided over it, Judge Claude Jorda of France. Jorda has been
president of the tribunal and has since become a judge at the new International
Criminal Court in The Hague, which has not yet begun any cases.
In a sweeping rejection, the appeals court said that the lower court had been
'wholly erroneous' in its assessment of the case and that no evidence showed
that Blaskic had ordered the crimes against civilians in Ahmici and neighboring
villages in 1993. At the time, Croat units attacked Muslim villagers to create
terror and make them flee. At Ahmici alone, more than 100 civilians were killed,
many of them old people who burned to death in their homes.
But the ruling was based not only on errors of the lower court. After Blaskic's
trial and sentencing, much new evidence became available. President Franjo
Tudjman of Croatia had repeatedly refused to provide it to the tribunal. After
he died, in 1999, the files of the Croatian intelligence agency were discovered
hidden at a military base near Split and the new Zagreb government ordered them
opened in 2000.
Several of the secret documents, made available to The New York Times, were
addressed to Tudjman and signed by his son, Miroslav Tudjman, the wartime
intelligence director. Some described the killing of Muslim villagers during
'ethnic cleansing' in Bosnia, and they clearly seemed to exonerate Blaskic, a
Bosnian Croat Army colonel at the time. Instead the documents revealed the role
of political leaders who ran a parallel command and used military police units
who did the terrorizing and killing of civilians as part of their 'ethnic
cleansing' campaign. Blaskic role was minor, one intelligence document said.
Blaskic, who learned that he was indicted in the Ahmici killings and other
crimes, surrendered to The Hague in l996, pressed by the Tudjman government. Two
of the president's aides pledged that he would be exonerated and that they would
provide the evidence, according to recordings made at the meeting. But it never
came. Croat lawyers said the evidence, which demonstrated political
responsibility, led to Tudjman himself and might have led to his own indictment.
After the intelligence archives were opened, the defence asked for a new trial,
but failed. But it appealed, armed with the new secret material. Hayman said he
submitted more than 8,000 pages of new evidence. A number of witnesses,
including British and Balkan military officers, testified in favour of Blaskic.
'We got a good decision today,' Hayman said. 'The first bench was way off on
many points, and the appeals court said so.'
Croatia gets BBB- from Fitch
International credit rating agency Fitch affirmed Croatia's long-term foreign
currency rating at BBB- and long-term local currency rating at BBB+ with a
positive outlook, New Europe reported recently.
The agency said the affirmation reflected the country's progress in EU
integration, but cautioned that difficult reforms lie ahead, according to a
press release from the rating agency.
IMF approves stand-by arrangement for Croatia
The executive board of the International Monetary Fund (IMF) has approved a
20-month stand by arrangement of an amount equivalent to SDR 97m (US$141.3m) for
the Republic of Croatia to support the country's economic programme, New Europe
The Croatian authorities intend to treat the arrangement as precautionary and
are not planning to draw funds under the credit. The previous stand-by
arrangement, which was also treated as precautionary, was approved on February
3rd, 2003. It expired on April 2nd, 2004.
Following the executive board discussion of the Republic of Croatia on August
4th, 2004, Takatoshi Kato, deputy managing director and acting chair, said:
"Croatia's economic growth and inflation performance since the mid-1990s
compares well with the Central and Eastern European countries (CEECs), the
economy is open, and structural reform is advanced. But this good performance
has been accompanied by a worsening of Croatia's external current account
deficit and rising external debt. These trends have accelerated since the turn
of the decade and have made Croatia vulnerable to external shocks. The
authorities have recognised the extent of the external imbalance and should be
commended for designing a set of policies to address it that emphasises fiscal
consolidation and support of structural measures."
FOREIGN ECONOMIC COOPERATION
BIH and Croatia cooperate in drainage system financing
Bosnian Minister of Foreign Trade and Economic Relations, Dragan Doko, and
Croatian Minister of Agriculture, Forestry and Water Management, Petar
Cobankovic, have signed agreements on cooperation in veterinary medicine and
funding the maintenance of the regional Komarna-Neum-Mljetski canal, it was
reported by New Europe recently.
The meeting focused on wine as well. It has been agreed that maximum efforts
will be launched to harmonise possibilities for free wine imports from
EU grants Croatia €76m
The European Commission (EC) has earmarked to Croatia, as part of CARDS 2004
programme, some €76m to support the efforts made on the road of reform and
modernisation the EC delegation to Croatia reported recently. Earlier, the
European Council had turned Croatia into an official EU candidate, so that in
2005, it will be eligible for pre-accession funds, HRT News reported.
IMPORTS & EXPORTS
Exports, imports increase in first half of 2004
Croatia's exports in the first six months of 2004 totalled slightly more than
22.8bn kuna or US$3.7bn, while imports totalled 48.7bn kuna or US$7.9bn, the
Central Statistics Bureau has reported, HINA news agency reported.
The export-import ratio was 46.9 per cent while the foreign trade deficit
totalled more than 25.8bn kuna or US$4.2bn. Expressed in the kuna, exports in
the first half of this year rose by 12 per cent, while imports increased by
slightly less than 7.7 per cent from the same period last year. Expressed in
dollars, exports went up by 25 per cent and imports by 20.1 per cent. This
difference is the result of a 10-per cent drop in the value of the US currency
in relation to the kuna in this year's first half.
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