Sunday, 12 February 2012 06:50

Croatia’s EU accession: Curbed enthusiasm

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On Sunday, January 23rd 2012, the Croatian referendum backed accession to the European Union. In 2013 it will join as Member State Number 28. But what is being described as a "historic decision" by Prime Minister Zoran Milanovic attracted less than 44% of Croatians to use their democratic voting right. Simultaneously, the Eurozone Crisis still dominates media coverage nearly every weekday and the narrative favoured by the media makes European enlargement appear unreasonable. Indeed, welcoming Zagreb into the EU doesn't just provide opportunities. There is work to do, in particular to prepare the Croatian economy for the EU market. 

Of the 43.67% of Croatian people who cast their vote, about 66% were in favour of EU membership. Politicians and analysts have tried to find several explanations for this low voting outcome, arguing for a low participation of the Croatian diaspora, the current Eurozone crisis and an election surfeit after recent parliament elections. The reality is probably a combination of all three.

Even former General Ante Gotovina, now imprisoned for crimes in the Croatian War for Independence, voted in favour of EU accession. He explained his decision in a manner reminiscent of what Austrian journalist Adelheid Wölfl called a "return to normality." According to her research, many Croatians feel historically connected to Europe. For them, EU membership seems to be a logical step to overcome the terrible time of the Balkan conflicts and to seize their deserved role within the heart of Europe.

EU membership seems to be a logical step to overcome the terrible time of the Balkan conflicts and seize a role within the heart of Europe

Without a doubt, Croatia's accession is overshadowed by the Eurozone Crisis. The current timeline indeed schedules Croatia's adoption of the euro for 2015 or 2016 if the Maastricht criteria are met. When looking through reader comments on online newspaper articles though, you will often be confronted with concerns that new Eurozone members could worsen the debt crisis. Rating agencies question the economic development of the Balkan country, rating it slightly above "junk" level.

Croatia's Debt-to-GDP ratio of 58.2% is, however, slightly better than the EU average. It seems unlikely that the prospective adoption of the euro by Croatia will cause a worsening or a repetition of the present crisis. After all, the current situation has reached a magnitude which will probably mean that increased attention is paid to the economic stability of new and existing member countries. It is not guaranteed that Croatia will be entering the Eurozone in the proposed timeframe. If the economic reform processes were extended, though, this could only be a positive thing.

It took seven years of reform to get to the point of EU accession, despite the fact that it was already being declared a goal after independence from Yugoslavia in 1991. Croatia demonstrated a willingness to cooperate with the International Criminal Tribunal for the former Yugoslavia but territorial disputes between Croatia and Slovenia slowed down the negotiation process. Another major challenge was to reform the Croatian justice system and to fight corruption. Being under EU supervision, the Balkan country strived to enforce anti-corruption measures. As a prominent example among many others, former Croatian Prime Minister Ivo Sanader is now facing corruption charges. This issue will need to be addressed continually, even after EU accession.

Croatia's past has been characterised as the fight for independence from Yugoslavia followed by its own efforts to join the EU. What seems like a success story could quickly turn into frustration if Croatian citizens perceive the decisions made in Brussels as being imposed on them. These are the same complaints that are already stated by citizens in other EU countries. A nation such as Croatia, with a dynamic development in the recent past will probably be more critical towards supranational decision-making. After all, the memories of Yugoslavian rule are a potential source of opposition to external interference.

Despite although European integration procedures have been completed in several fields, the economic integration of a country takes longer and is accompanied by more opportunities and risks. The current unemployment of 20% is a major issue to be resolved. Simultaneously, various industries demand reforms to compete in the open EU market. Croatia's participation in this market can nonetheless be a big opportunity. Moreover, Croatia's tourism sector, which represents nearly 20% of Croatian GDP, can expect growth due to easier travel from EU countries.

While fears from other European countries of financial destabilisation due to Croatia's accession are rather baseless and we should welcome the reforms the Croatians have made so far, this should not mean that we trivialise the challenges ahead.

Last modified on Sunday, 12 February 2012 10:24
Simon Schmidt

Simon Schmidt holds a BA in International Business and is an alumnus of the International MA program of Political Science with respect to Russia and Eurasia of the European University at St. Petersburg. His main interests are Russian-EU relations and energy, security and economic developments in post-Soviet Eurasia. He currently lives and works in Tashkent, Uzbekistan.

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