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Books on Croatia
REPUBLICAN REFERENCE
Area (sq.km)
56,542
Population
4,496,869
Capital
Zagreb
Currency
Kuna
President
Stipe Mesic
Private sector
% of GDP
55%
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Update No: 101- (27/09/05)
The EU beckons
The delivery of Gotovina to The Hague is widely perceived as the sole
pre-condition for Croatia's entry into the EU, but the truth is that there are
others, including reform of the judiciary. Joining Europe demands acceptance of
the European model of the functioning of justice. The reform of the judicial
system that this entails is bound to take time.
Croatia is faced with the problem of a large number of unsolved court cases, for
example. Sometimes the parties have to wait for five, ten or more years. This
creates among other things an atmosphere that discourages Croatian citizens and
foreign investors alike.
Croatian 'Unflappable Mac'
Prime Minister Ivo Sanader problems at home. But in a style somewhat reminiscent
of 'Unflappable Mac,' the UK premier Harold Macmillan, he is dismissing media
speculation about early elections as "little local difficulties,"
saying his conservative government was stable and would serve its term until
late 2007.
Sanader, whose country hopes to start European Union membership talks this year,
was speaking on state radio amid mounting opposition criticism of the
government's economic record. "Forget about early elections. This is a
stable government. Next elections will be, as is due, in November 2007,"
Sanader said when asked about the possibility of an early poll.
Brussels postponed the start of Croatia's EU membership talks in March because
of what it said was Zagreb's failure to cooperate fully with the United Nations
war crimes tribunal in The Hague. Croatia has since stepped up efforts to
cooperate. The EU is expected to reassess Zagreb's bid soon, but the issue of
general Gotovina remains an open sore.
Croatia's opposition, led by ex-Prime Minister Ivica Racan's Social Democrats,
have supported Sanader's EU bid but has been fiercely critical of his cabinet's
economic performance. They say the government has no coherent economic strategy
and accuse it of failing to boost employment, raise living standards, lower
taxes and increase economic growth.
Observers believe Sanader may face a serious challenge when voting on the 2006
budget in parliament, where his Croatian Democratic Party (HDZ) has a fragile
majority and relies on support from several small parties and independent
deputies.
Nacional weekly has reported that Sanader had made a pact with the right-wing
Party of Rights (HSP), under which the HSP would vote for the budget, while the
government would in turn support HSP leader Anto Djapic, the new mayor of the
eastern city of Osijek.
Earlier this year, the cabinet comfortably pushed a 2005 budget revision through
parliament in July, indicating that Sanader's grip on power was not as shaky as
it appeared. Sanader mustered 80 votes in favour in the 151-seat assembly.
Croatia's DC calls for economic zone in Adriatic
Croatia's Democratic Centre (DC) party called on the parliament recently to
declare an economic zone in the Adriatic Sea and pass a law establishing a coast
guard, the Croatian News Agency Hina reported.
The move came after a recent proposal by Slovenia to proclaim an ecological zone
in the Adriatic. The problem of demarcation of the border with Slovenia should
be resolved through international arbitration, which the DC has always seen as
the only proper instrument for resolving the issue," the party's secretary
for international affairs, Radovan Fuchs, was quoted as telling reporters in
Zagreb. Fuchs said that by then the two countries should refrain from taking
unilateral steps or provoking incidents as agreed by their respective
governments at a meeting on the northern Croatian Adriatic islands of Brijuni.
DC president Vesna Skare Ozbolt, who also serves as minister of justice in the
present government, said that proclamation of an economic zone would mean
nothing unless control and protection system was established.
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AVIATION
Russia offering Croatia MiG 29 fighter jets
Russia has offered Croatia 24 MiG 29 fighter jets in exchange for old Croatian
MiG 21s, the Russian daily newspaper Jutarnji reported.
Russia proposed the deal and Croatia would only have to pay the difference in
value between older and new models. The paper also said the Russians told how
Serbia, former enemy of Zagreb during 1990s Balkan war, intended to buy Sukoi
SU-30 jets, which would mean Belgrade would have a stronger air force. Croatia
currently has 24 MiG 21s, not all airworthy. Croatia announced that it will
modernise its air force by 2010, when MiG 21s are to be withdrawn from service.
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CREDIT RATINGS
S&P affirms Croatia's BBB credit rating, outlook stable
Ratings agency Standard & Poor's affirmed Croatia's BBB long-term foreign
currency credit rating and kept its outlook stable, citing strong economic and
structural reforms, New Europe reported recently.
S&P also said it was keeping its A-3 short-term foreign currency rating as
well as the BBB+ long-term and A-2 short-term local currency sovereign credit
ratings in place.
The ratings on Croatia are supported by its strong record of economic and
structural reform over the past few years, as well as the policy anchor provided
by European Union integration and the economy's good growth prospects, said
S&P sovereign credit analyst Remy Salters.
However, the ratings are constrained by the high, although stabilising, private
sector net external debt burden, the need for further structural reforms, as
well as significant reliance on the performance of the tourism sector, he added.
A further upgrade for Croatia would require more fiscal consolidation and
sustained progress with structural reforms, Salters said.
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ENERGY
INA teams up with Syria's Petrol, Gas
Croatian oil company INA has inked a long-term agreement on the sale of gas to
the Syrian Petroleum Company and the Syrian Gas Company, the Croatian news
agency Hina reported, citing INA in a statement.
The gas was discovered in the research bloc Hayan northeast of Damascus,
covering an area of 5,000 square kilometres. INA holds a 100 per cent concession
in the area. The company said the deal marks the start of joint work of INA and
the two Syrian companies on putting the discovered oil and gas field into
operation.
EU MEMBERSHIP
Croatia says ready to open EU membership talks
Croatian Foreign Minister, Kolinda Grabar-Kitarovic, recently urged European
Union governments to set a new date for opening membership talks with her
country, saying Zagreb was ready to start negotiations as soon as possible,
Deutsche Presse-Agentur (dpa) reported.
Speaking to the foreign affairs committee of the European Parliament,
Grabar-Kitarovic, said Croatia was putting a great deal of effort into
demonstrating full cooperation with the international war crimes tribunal in the
Hague. She also pointed to efforts to undertake a thorough reform of Croatia's
police and intelligence services.
EU governments delayed the planned March opening of membership negotiations with
Croatia over the government's failure to locate and extradite the fugitive
general and war crimes suspect, Ante Gotovina.
Several EU lawmakers said the Zagreb government must do more to remove posters
of general Gotovina from public places. Responding to Slovenian members of the
European assembly, Grabar-Kitarovic said that while Slovenia's recent
declaration of an ecological zone in the Adriatic was contrary to the
international law of the sea, Croatia would not escalate the dispute. Zagreb
wanted to continue discussing the issue but would resort to binding
international arbitration if dialogue failed, she said.
The Croatian foreign minister was to attend an informal meeting of EU foreign
ministers in Wales recently to make another direct appeal for a start to
membership talks.
Britain, which holds the EU presidency, has said it will convene a meeting of
the bloc's taskforce on Croatia in September to examine the issue. However,
other EU countries, including Austria and Hungary, are pushing for talks with
Croatia to start before those with Turkey in early October. In a related
development, despite their government's efforts to ensure the opening of
European Union accession talks this autumn, most Croatians oppose joining the
25-member bloc, a poll showed. The poll of 900 people, published by the daily
Vecernji list newspaper, showed 44 per cent of Croats were against joining the
EU, 39 percent were in favour, and 16 per cent were undecided.
Support for EU membership among Croats began to plummet after the EU postponed
accession talks. The centre-right government of Prime Minister Ivo Sanader is
lobbying hard to ensure the talks begin in autumn.
Alexandra Kolaric, a former government spokeswoman and public relations expert,
said Croats feel unwanted by the EU and that it was a case of: "If you
don't want me, then I don't want you either."
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FOREIGN LOANS
WB and Croatia sign port deal
An agreement on US$1.75m advance payment on a loan to be used for a project of
modernisation of the southern port of Ploce was signed in that Adriatic town on
September 3 by Croatian Finance Minister, Ivan Suker, and the director of the
World Bank's office for Romania, Bulgaria and Croatia, Anand K. Seth, Hina News
Agency reported.
The entire project covering the construction of a container terminal and a bulk
cargo terminal is worth between US$60m and US$75m. The US$1.75m advance payment
will be used for the preparation of the necessary documentation.
Minister Suker said that the loan would be granted under the currently most
favourable terms with a grace period of five years, a 15-year repayment period
and at an interest rate of 2.3 per cent.
World Bank Vice President for Europe and Central Asia, Shigeo Katsu, who
attended the ceremony in Ploce, said that the bank set the development of
regions as one of its key tasks, and voiced hope that this project would manage
to integrate needs for growth and sustainable development. The biggest southern
Croatian seaport is mainly used as a gateway by neighbouring Bosnia-Herzegovina
for the export of its goods and import of raw materials.
Present at the ceremony in Ploce were Croatian Sea and Transport Minister,
Bozidar Klameta, members of parliament and local officials.
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FOREIGN RELATIONS
Czech president visits Croatia
Czech President Vaclav Klaus arrived in Zagreb on September 6 on his first
official visit to Croatia for talks with his counterpart Stipe Mesic and Prime
Minister Ivo Sanader, New Europe reported.
The sides were expected to sign agreements on cooperation in tourism and trade.
Croatia's ambitions to join the EU were also on the agenda.
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