Croatian Govt in 2008, from Elections to Blockade

A summary of issues that marked PM Sanader’s rule in 2008 from elections, through Security Council membership to the Slovenian blockade.

ZAGREB, CROATIA – The confirmation of the new government of Prime Minister Ivo Sanader in parliament, the fight against inflation and failed negotiations with unions about freezing salaries in 2009, membership in the Security Council and the invitation to join NATO, as well as Slovenia’s blockade of Croatia’s negotiations on accession into the European Union are some of the important events that marked the work of the Croatian government in 2008. 

Sanader, the first Croatian prime minister who had his second mandate to form the government, started the year off with talks with coalition partners about the new government that was confirmed in parliament on January 12. The government also got two new ministries – of tourism and regional development, so the total number of ministries rose to 15.

The first year of rule

In its first year, the government had the first cadre changes. After the killing of attorney apprentice Ivana Hodak in Zagreb in early October, the prime minister promptly reacted by dismissing ministers. He fired Interior Minister Berislav Roncevic and Justice Minister Ana Lovrin, replacing them with Tomislav Karamarko and Ivan Simonovic, respectively.

The work of the government, especially in the first half of the year, was marked with a fight against inflation. The government founded a special commission for monitoring the increase of prices, the approved 20 percent increase in the price of electricity in the middle of the year depended on how much electricity was spent, while the increase in the price of gas was approved only late in the year, so the citizens will feel the full brunt of it in the beginning of 2009.

The government is also reacting with other measures – in mid-2008 the non-taxable part of the salary was raised from 1,600 to 1,800 kuna and the government rescheduled the budget to secure 600 million kuna for structural projects for the citizens and the economy.

In the second half of the year, particularly in the last quarter, there was raiding concern over the worsening global financial crisis and its overflowing onto the real sector.

In planning the budget for 2009, the government thus offered social partners, employers and unions, to freeze salaries in the coming year so the budgetary deficit would turn out zero.

But the unions did not accept this proposal, nor did they accept the proposal of salaries growing by three percent in the second half of the year, so the draft budget started out with a deficit of 1.6 percent GDP. However, later amendments involving economising, reduced the deficit to 0.88 percent.

Active parliament

The government’s legislative activities were also intense. In 2008 it forwarded to parliament some 240 draft laws. The quickest change was made to the Law on Trade – it came into force on August 2 and limited working hours to 9pm in the middle of the tourist season. In mid-August, the government passed a by-law, allowing local units to regulate the working hours of shops and stores.

At the beginning of 2008, the ZERP (Protected Ecology and Fishery Zone) came into effect for EU members as well, but after pressures and signals from Europe that this could halt pre-accession negotiations, the government again postponed the application of ZERP to EU countries.

The beginning of the year was also marked by a great foreign policy success – Croatia became a non-permanent member of the UN’s Security Council and in December it took over the one-month presidency over the Council.

At the beginning of April, Croatia received an invitation to join NATO and in mid-November the International Court of Justice dismissed all Serbia’s objections and said it had jurisdiction over Croatia’s lawsuit against Serbia for genocide.

Slovenia’s blockade

But with regards to Croatia’s accession into the EU, the year 2008 will be remembered for Slovenia’s blockade of Croatia’s negotiations due to its alleged prejudging of the Croatian-Slovene border in accession documents.

Despite an attempt of France to mediate and the government’s accepting to confirm that no document in the negotiations would prejudge the border, the Slovenian government at the end of the year officially confirmed its decision to withhold its support to Croatia opening and closing most negotiation chapters. So, at the accession conference on December 19, Croatia managed to only open one instead of nine and close three instead of five chapters.

The Croatian government and prime minister reacted with expectations that Slovenia would reassess its stances, adding that there was no need to panic and that Slovenia’s decision would only slow down Croatia’s path towards the EU.

Considering the support of all the rest of the members of the EU, Croatia is continuing on its path, determined to implement the necessary reforms to complete negotiations with the EU in 2009 and become the 28th member of the EU, the prime minister and government said.

Croatia is entering the year 2009, the key year for negotiations with the EU, with 22 open chapters and seven temporarily closed chapters, although it is ready to open ten more chapters. In mid-January, after an agreement on tenders for the privatisation of shipyards, conditions for the opening of the last chapter should be met.