Books on Croatia
% of GDP
Update No: 110 - (27/07/06)
Support for former foe's EU drive in first visit to Zagreb
by Serbian head of state
There is no more important relationship for the Croats than that with the Serbs
for very obvious reasons. In 1991, Croatia seceded from Serb-dominated
Yugoslavia. Belgrade sent in tanks to crush the independence drive and then
backed and armed Croatian Serb separatists. The war ended in 1995, leaving some
20,000 dead on the Croatian side.
Serbian President Boris Tadic visited former foe Croatia in late June in a bid
to boost ties between Balkan neighbours seeking to put the hostility of the
1990s behind them and win membership of the European Union.
Tadic, a reformer often openly at odds with Serbia's more nationalist Prime
Minister Vojislav Kostunica, said he backed Croatia's EU bid as vital for the
future of other Balkan states, Serbia, Montenegro, Albania, Bosnia and
Macedonia. "It is in Serbia's interests that Croatia realises its strategic
goals, so that other Balkan countries can follow," Tadic, the first Serbian
head of state to visit Zagreb, said after talks with Croatian President Stjepan
Despite progress made since hardline nationalists lost power in both countries
in 2000, Tadic said he was still unhappy with the pace at which Croatian Serb
refugees were returning to the homes they fled during Croatia's 1991-1995
independence war. "The return of refugees is not going in the best possible
way, although efforts have been made. I do expect Croatia to do more to enable
the Serbs to return," said Tadic.
Croatia, Serbia open border checkpoint
Relations are also on the mend at a prime ministerial, not just presidential,
level. There could not have been a more symbolic moment for both countries than
an event in late July.
Croatian Prime Minister Ivo Sanader and Serbian Prime Minister Vojislav
Kostunica opened the modernised border checkpoint at Batrovci-Bajakovo, which
was co-financed by the EU on July 21.
Sanader went on to Belgrade for meetings with President Tadic. He said bilateral
co-operation has increased significantly over the past year, and expressed
confidence that Serbia's action plan for co-operation with the UN war crimes
tribunal would bring results.
Croatia Proves Reforms In Region Are Possible, Says Sanader
Croatia has become proof that reforms in the region are possible and is a
model to all its neighbouring countries, Sanader said on July 25 at London's
International Institute for Strategic Studies in a talk on Croatia as the 28th
member of the European Union.
The talk marked the end of the first day of Sanader's two-day trip to London,
during which he spoke to Prime Minister Tony Blair and met business people in
the City of London. Sanader briefed the Institute's members of the current
political and economic situation in Croatia and said Croatia was very similar to
those countries which joined the EU two years ago. He said that what had been
achieved was not accidental but the result of a lot of work.
Sanader voiced confidence that the formalities of Croatia's EU membership would
be met soon, voicing hope that the Union needed Croatia because of its important
role in the stabilisation of the region. He assessed the stabilisation of the
region as a key achievement and voiced confidence that the South Eastern Europe
Cooperation Process, which Croatia is currently chairing, would soon replace the
Stability Pact for Southeast Europe, which he said had filled its role.
Answering questions, Sanader said a solution for Kosovo must ensure the
protection of minority rights in accordance with the highest standards and that
Belgrade must be involved in the finding of a solution so that Serbia, and the
entire region, would not be destabilised.
Asked if Croatia would help Serbia implement its Action Plan for full
cooperation with the Hague war crimes tribunal, Sanader said Croatia would
contribute as much as it could to the arrest of Bosnian Serb fugitives Ratko
Mladic and Radovan Karadzic so that they could finally face the indictments
before the tribunal.
Sanader underlined that there should be no yielding to Serbia regarding
cooperation with the UN court. He said Croatia had cooperated and that Europe's
doors opened only when it met the last condition for full cooperation.
Croatia hosts summit on SEE issues
Leaders and political officials from across Southeast Europe met in early
July in Croatia for a summit on regional security and integration into the EU
and NATO. Dubrovnik hosted many important political figures from the Southeast
European region at a summit that targeted security and integration. A total of
80 top officials representing over 40 countries and international organisations
attended the two-day summit, which began 9 July.
The participants discussed the future of the region and its role in the modern
political world. Strong emphasis was also placed on the key goals of EU and NATO
Participants included the prime ministers of Albania, Bosnia and Herzegovina,
Montenegro and Serbia, as well as the hosts of the event -- President Mesic and
Prime Minister Sanader. Kazakh President Nursultan Nazarbayev was also in
In their addresses at the summit, Mesic and Sanader both termed EU and NATO
integration a national priority for Croatia. Mesic also urged all SEE countries
to leave behind the divisive politics of the past and to look forward to a
In his speech, Sanader said he dreamed that one day a tourist or businessman
could drive the entire way from Vienna to Istanbul without stopping at a single
border control. "Let's just imagine the effects that unique shape of
freedom would have on the strength and well-being or Europe," he said.
While problems still remain in the Balkans, it is important that the solutions
offered do not generate new crises, participants said. They also agreed that
while countries should work together to tackle issues, implementation of
agreed-on solutions should come from domestic institutions, rather than external
Protection of minorities was another issue discussed, with many focusing on the
political and economic benefits of accepting minorities and treating them
equally. There was also a call for larger countries, including those already a
part of the EU, to show the way forward for the smaller countries, and help out
The summit ended on an optimistic note, with a general conclusion that Southeast
Europe was finally headed in a positive direction and has a bright future to
look forward to.
Country remains on EU membership path
The Croatian PM, Ivo Sanader, spent more than an hour with European Enlargement
Commissioner, Olli Rehn, in his Berlaymont office on day one of the EU summit.
Wheezing in from the EPP summit in Meise the PM said after his tete-a-tete with
the Finnish Commissioner that the topics they discussed spanned Croatia's EU bid
and football, New Europe reported.
He said that Rehn bragged about watching the Croatia-Brazil match in the
Brussels cafe Rio but claimed his support for Croatia. That same evening in
Brussels the 25 EU heads of state or government were attending a working dinner
at the European Council rehashing the future of the EU Constitution, how to
continue and also how to make sure the necessary arrangements for further EU
enlargement are made on time.
"I am extremely satisfied since we discussed institutional arrangements
once Croatia ends its negotiations on EU accession. We talked about ways for
Croatia to become the 28th member state even without making major changes in the
Nice Treaty, that was designed for only 27 member states," Sanader summed
up his meeting with Rehn. The Premier added that one should expect an even more
dynamic accession process during the Finnish Presidency of the EU that kicks off
on July 1. "Following the opening and closing of the first chapter science
and research the new dynamism will bring added value to the Croatian path to the
EU," the Split-born prime minister sounded convinced. At the EPP summit in
Meise earlier, overwhelming support for assessment of each country heading for
the EU according to its own achievements was expressed. Sanader is strongly in
favour of that idea because of the bad aftertaste of the Coreper meetings on the
first negotiating chapter science and research when things temporarily came to a
standstill for Croatia due to Coreper's divergences over Turkey.
Sanader also mentioned that in the course of the next few days the Croatian
chief negotiator Vladimir Drobnjak would head to the Finnish capital Helsinki.
"The purpose of that trip is to make sure that Finland is 'working
dynamically' and to agree on next steps in the Croatian negotiating
process," said the Croatian premier.
EBRD acquires 8.33% stake in Agrokor
The European Bank for Reconstruction and Development (EBRD) acquired an 8.33 per
cent stake in Croatia's Agrokor, company officials stated after signing the
contract in London, New Europe reported.
The EBRD will invest a total of 110 million Euro in the company, which will be
used by the company to restructure the balance sheet after a series of domestic
and foreign acquisitions and to prepare for the future initial public offer. The
EBRD President Jean Lemierre said that Agrokor was a successful company with a
significant regional growth, assisting economic growth in Croatia and overall
employment rate increase in the country and the region. "Agrokor should be
an example to other Croatian companies, looking into the regional
expansion," Lemierre said.
The EBRD's investment would also assist the company to improve business
operations by increasing domestic market share and by improving the company's
rating among potential investors ahead of the initial public offer. Agrokor
President, Ivica Todoric, said that EBRD's investment would aid the company in
expanding outside Croatia. Previously, the EBRD approved a syndicated credit
worth 170 million Euro for Agrokor in 2000 for restructuring and regional
expansion, and in 2004 EBRD financed the acquisition of Serbia's Frikom with a
credit totalling 13 million Euro, it was reported. EBRD has so far invested a
total of 1.3 billion Euro in 76 different projects in Croatia.
Barr to pay US$2.2bn for Croatia drugmaker
Barr Pharmaceuticals agreed recently to buy Pliva, Eastern Europe's biggest
drugmaker, for US$2.2nb in cash, topping a bid from the Actavis Group of
Iceland, the International Herald Tribune reported on June 28th.
Barr offered 705 kuna, or US$122, a share for Pliva, which is based in Zagreb,
Croatia, 6 per cent more than its closing price, the companies said in a
statement. Actavis's last offer, of 630 kuna on April 20th, was rejected by
Pliva as too low.
The purchase will allow Barr, the largest US maker of birth control pills, to
expand in Europe, where it does not have major operations. Barr, which had
revenue of US$1.2bn in the year that ended March 31st, said its annual sales
would rise to US$2.5bn after the merger as it gained Pliva's established markets
in Russia, Britain, Germany, Spain and Italy. "Right now, Barr has
practically no presence in Central and Eastern Europe," said Vladimira
Urbankova, an analyst at Erste Bank in Prague. For Pliva, "the drugs they
have in the pipeline will be better marketed with Barr than without Barr."
Barr gets about two-thirds of its sales from generic medicines. The company
specialises in women's health products, selling the Plan B "morning
after" emergency contraceptive as well as the Seasonale birth control pill.
Shares of Barr were down US$1.27, or 2.6 per cent, at US$47.50 in afternoon
trading in New York. Pliva's global depositary receipts rose US$1.47 or 6.5 per
cent, to US$23.95 in London. Each GDR represents 20 per cent of a Pliva share.
The GDR's which have gained 78 per cent this year, are worth about 689.50 kuna,
compared with Pliva's record closing price of 685.01 kuna in Croatia.
Barr is developing about 50 generic medicines, while Pliva will bring an
additional 120, the companies said.
The transaction will leave Pliva's management in charge of European operations,
and the Pliva brand will continue to be used there, the company's chief
executive, Zelijko Covic, said at a news conference.
But analysts, including Urbankova, said that Barr may not want to keep Covic on
as the head of its European operations in the long term. Pliva had a US$75m net
loss in 2005 partly because the company abandoned its unprofitable proprietary
Under Covic, Pliva relied too much on royalty revenues from patented products
and paid too little attention to maximising profit from sales of generic
products, Urbankova said. Pliva has struggled to recover from the expiration of
the US patent on its azithromycin antibiotic. The medication generated nearly 25
per cent of Pliva's revenue for the first nine months of 2005.
Pliva's competitors, including Budapest-based Gideon Richter and Prague-based
Zentiva, have pre-tax profit margins on generic sales of about 20 per cent,
whereas Pliva's is about 10 per cent, she said. Still, "It may be that
Pliva is on the verge of major growth in generics, as the company has been
saying," said Frances Cloud, an analyst at Nomura Code in London.
An Actavis spokesman, Halldor Kristmannsson, declined to comment on the planned
deal. The offer is contingent on Barr's getting at least 50 per cent of Pliva's
shares, Covic said.