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Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 28,322 22,421 20,300 61
         
GNI per capita
 US $ 5,350 4,640 4,550 70
Ranking is given out of 208 nations - (data from the World Bank)

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Update No: 168 - (26/06/11)

A landmark geo-political development for Croatia has occurred this month: on June 10 European Commission President Jose-Manuel Barroso announced that after six years of protracted negotiations the former Yugoslav state's bid to join the EU had been successful. An EU summit, which took place on the 23rd-24th of June, reaffirmed the country's inclusion, with EU leaders adding their political backing to Croatia becoming the union's 28th member in July 2013. But one month earlier, the path to EU accession had looked shaky, with negotiations stalling over corruption and transparency as well as the Kosor-led government facing a swell of popular discontent over the indictment of General Ante Gotovina for war crimes.

It seems that it may well have been a bit of divine intervention that sped the process along. A propitiously timed and high-profile visit to Zagreb from Pope Benedict XVI on June 4-5 may have helped seal public approval for EU membership. On his first trip to Croatia, the Pope addressed 40,000 people in the capital’s hippodrome with a speech in which he described the 89.8% Catholic country's bid to join the EU as "logical, just and necessary". "From its beginning, your nation has belonged to Europe,” the Bishop of Rome told journalists as he arrived at the airport, just one example of the pro-European rhetoric that characterized the whole of his visit. This has been seen as an attempt to allay popular fears that Croatia's identity would be submerged once within the bloc. This opportunity to vaunt the virtues of the European project was gladly seconded by the country’s political elite. President Ivo Josipovic added his own splash of holy water, calling the unification of Europe as essentially 'a Christian project'.

Having popular backing for the move to Europe is a necessity for the government, as one of the remaining obstacles to full membership is a domestic referendum. Whilst approval ratings for membership tend to be hovering around 50%, Croatians have manifested some hostility towards the prospect, with one particular sore point: the International Criminal Tribunal for the former Yugoslavia (ICTY). The necessity to comply with the conditions imposed by the ICTY was and still remains a subject of hot debate. The prosecution of former general Ante Gotovina in particular ignited the anger of Croatians nationalists who felt the military leader to be a protector of the Croatian entity as opposed to a brutal aggressor. It was doubtless hoped that an appeal from a higher authority, in the form of the papal plea, would settle any lingering doubts over the matter.

It seems that in addition to this, strong pressure from member states such as Hungary, Germany, Austria, Poland and the Czech Republic propelled the country’s entry. Traditional ally Hungary was, it seems, particularly keen to wrap up negotiations as its six-month presidency of the EU comes to an end. A visit to Downing Street by Croatia's Prime Minister, Jadranka Kosor, on June 10 may have helped smooth over British concerns, which have up until this point been among the most vocal of the European member states. It would appear the Netherlands has also accepted that Croatia has manifested ongoing commitment to comply with the conditions of the Hague-based ICTY. Following the arrest of Ante Gotovina, a former senior interior ministry official, Tomislav Mercep, was also charged with war crimes against Serb civilians at the beginning of the country's independence war in the early 1990s. The ICTY gave Croatia a relatively favourable report on its cooperation with the tribunal's requests although it has suggested that key documents relating to the prosecution of Croat general Ante Gotovina remain "unaccounted for".

So what now? There are several more steps to take before Croatia reaches the home straight. The four last negotiating chapters have to be closed, which include Chapter 23 on Judiciary and Fundamental rights, a particularly thorny issue as it concerns corruption and the treatment of Serbian minorities. When the commission announced Croatia’s bid has been successful, it did also stress that corruption needed to be fought with ‘vigour’. The Dutch Prime Minister Mark Rutte added that Croatia's reforms must be ‘sustainable and irreversible’. Britain, France and Germany, and Dutch officials, who belong to the sceptical camp, are still pushing the idea of a conditional approach, threatening possible sanctions in the event of reforms being insufficient, especially in the fight on graft. The minority issue is also problematic. On June 11 a gay rights parade took place on the coastal town of Split. What should have been a peaceful event turned into a riot, when the event’s 200 participants were attacked by around 10,000 opponents, and eventually had to be evacuated. Complaints emerged of a failure by the police to protect the participants sufficiently. President Ivo Josipovic’s response was tellingly political: he argued that it showed “that there are some non-European parts of our society”. He will have been pleased to see that a march in Zagreb, one week later, passed without incident. The case of former Croatian Prime Minister Ivo Sanader, who has been accused of abuse of power and money laundering, will also be closely watched. Of the three other chapters to be closed, Chapter 33 is on finance and the budget, always the last to be concluded, and Chapter 35 is a technicality.

Chapter 8 is the other issue that is likely to cause some commotion domestically. This is the competition policy which would involve removing heavy state subsidies from shipyards and agriculture. The strongest opponents of EU membership, farmers and shipyard workers, believe this clause will make their already precarious existences even more financially strained. The Adriatic coast's problematic shipyards represent an industry that has been kept afloat primarily by the government in order to stave off unemployment. With Croatia’s entry to the EU, the shipyards will have to be privatized. There are worries across the board that the economic situation could get worse, and in particular, that European prices will be introduced but Croatian wages will stay the same, making even subsistence unsustainable. The Greek crisis has been of little solace to those already fearing that EU accession will bring as many economic problems as economic advantages. Nonetheless Croatia will enjoy ample funding for infrastructure, as much as 1.6 billion euros as soon as 2013. As the EU funds earmarked for Croatia represent almost 8% of the country’s GDP, this would be a significant boost for the economy.

Croatia’s admission into the EU is, as Prime Minster Jadranka Kosor described it, a groundbreaking step. As the second Balkan nation after Slovenia to join the bloc, many have argued that this will pave the way for the rest of the Western Balkans to join. Nonetheless, Croatia’s conditional entry means that the country still has much to achieve before it can call itself part of the club.

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