2016 – A Year of Croatian Politics in Review

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In many ways, the year behind us was truly historic in Croatian politics. In other ways, it was just a regular mix of scandals, mistakes, false promises and occasional unexpected successes.

This year will be remembered in Croatian politics as the “year of three prime ministers”. For the first time since the current constitutional arrangement was introduced in 2000, Croatia has witnessed a collapse of a government and early parliamentary elections, while Tomislav Karamarko and Zoran Milanović, who were at the beginning of the year leaders of the two largest political parties, left their posts and more or less retired from active politics. What follows is an overview of some of the most important political events in 2016, as reported by TCN.

The year began with outgoing Prime Minister Zoran Milanović getting ready to leave and Prime Minister-Designate Tihomir Orešković trying to find ministers for his cabinet, amid confusion was his actual role was, given the fact that he was nominated as Prime Minister at the very last moment, as a non-party person virtually unknown to the Croatian public, after MOST declined to accept any candidate which would be a member of HDZ, its “trusted” coalition partner. Arguably the two most important people in Croatian politics at the beginning of the year were HDZ president Tomislav Karamarko and MOST president Božo Petrov, leaders of the two parties which were about to form a government. Finally, on 22 January, negotiations and selection of ministers were completed, and the new government led at least formally by Tihomir Orešković took power.

Another major story at the beginning of the year was the refugee and migrant crisis. More than half a million migrants passed through Croatia in late 2015 and early 2016. While some called for the borders to be closed and even army to be sent to keep the migrants away, both the outgoing SDP government and the new HDZ-MOST government continued with organized transport of migrants from the border with Serbia to Hungary and later to Slovenia. The neighbouring countries erected fences on their borders with Croatia, which provoked numerous protests on both sides, but the migrant wave continued for a while, before dying down, at least temporarily.

It did not take long for the first scandals to hit the new government. Veterans Affairs Minister Mijo Crnoja was widely considered to be the most likely candidate to first leave the government, and he did not disappoint. His only major proposal during his short tenure was the introduction of the Register of Traitors of Croatian National Interests, which would presumably include all those who did not agree with him and who would be banned from holding public office. However, the only person which had to leave a government position was him. Just three days after being appointed minister, it was discovered that Crnoja had falsely registered his place of residence in order to pay lower local taxes. There were also several other accusations against the minister which pushed the government into its first major crisis. MOST demanded that Crnoja had to go, while HDZ insisted on keeping him. In the end, after two days and nights of negotiations, MOST won and Crnoja, resigning after just six days in office, became the minister with the shortest term in office in the history of Croatia. The first disagreements between coalition partners were becoming obvious and the post of Veterans Affairs Minister remained vacant for weeks. MOST and HDZ traded insults about who should replace Crnoja, while Prime Minister Orešković seemed unable to make a decision.

Another very controversial member of the new government was Culture Minister Zlatko Hasanbegović, who during the year turned from an unknown historian into a major rightwing star. He was criticized in Croatia and abroad for his positions towards the Ustasha regime, independent media, national minorities and a host of other issues. Although he survived until the end of Orešković’s government, he was not reappointed in the new HDZ-MOST government by Prime Minister Plenković. He then resolutely declined any other position and is currently just a regular member of Parliament. Many see him as a potential leader of rightwing intraparty opposition to the current HDZ leadership and even as a possible future party leader, if and when Plenković makes a wrong step.

The year was marked by a number of extremist incidents. Rightwing groups organized paramilitary marches, protests against independent regulatory institutions, defaced antifascist monuments, defended Independent State of Croatia, and brought into question human and minority rights, meeting only tepid and occasional reaction from the government. However, the reaction from the civil society, minority groups, international community, foreign media, activists, and NGOs was much more forceful.

There was also a sort of “conservative revolution” taking place, with abortion issue being in the centre of attention. Anti-abortion marches and prayer vigils were held near hospitals which perform abortions, and there were attempt to ban the abortion, whether through the courts or through a referendum. The Catholic Church also tried to make its position in the society even stronger.

Conflicts at the top of the government were not just confined to relations between HDZ and MOST. In February, President Kolinda Grabar-Kitarović dismissed Dragan Lozančić, director of the Security Intelligence Agency, without consulting Prime Minister Orešković, who had to co-sign the dismissal. This marked the beginning of a months-long drama between the President, the Prime Minister and HDZ president Karamarko, who considered himself to be an authority on secret services, which finally ended in May with the appointment of Daniel Markić, against Karamarko’s wishes.

One of the ongoing foreign policy issues for successive Croatian governments is the border dispute with Slovenia, particularly in the Bay of Piran. Secret recording were published which showed that Slovenian Foreign Ministry officials were in collusion with a supposedly independent Slovenian arbiter deciding on the issue. Croatia used this as an excuse to leave the arbitration proceedings, calling them tainted. It accepted the arbitration in 2009, as a price to pay in order for Slovenia to unblock Croatia’s accession negotiations with the European Union. It was looking increasingly likely that the arbitration tribunal would rule in favour of Slovenia, so Croatia jumped at the chance to leave the proceedings, while Slovenia still advocates for their continuation. The issue has occasionally been in the centre of attention throughout the year, and it has not yet been resolved.

Relations with other neighbours weren’t much better. During the year, Croatia repeatedly slowed down or blocked Serbia’s negotiations with the European Union. However, after a friendly phone call from Brussels, Berlin or Washington, the problem would suddenly be resolved and all reservations withdrawn.

With regards to Hungary, the main problems were the migrant crisis, with Hungary constructing a wall on the border with Croatia, as well as the issue of INA, the Croatian national oil company which is partially owned by Hungarian MOL. INA was sold to MOL in several steps during the last 13 years, and each new phase brought new problems, accusations of corruption and of alleged attempts by MOL to destroy INA in order to improve its own position in the regional markets. The whole issue also played an important role in the collapse of the government. The year ended with a dramatic press statement by Prime Minister Plenković, given late on Christmas Eve, that Croatia had lost one of two arbitration proceedings against MOL and that the government would buy back MOL’s share of INA. How it will be done, where the money will come from, and whether MOL even wants to sell its share are questions without answers at this moment.

It is customary for political parties to hold elections for their leadership after each parliamentary elections, so the first part of 2016 brought us elections in both major parties, HDZ and SDP. In HDZ, Tomislav Karamarko was the only candidate, which was not surprising since HDZ was in power so it was unlikely that anyone would try to replace him. However, an interesting article appeared on 15 February, with rumours that HDZ’s Member of European Parliament Andrej Plenković might run against Karamarko. Although it did not happen at the time, just several months later Plenković would first succeed Karamarko as HDZ president (also as the only candidate at intraparty elections), and then succeed Orešković as Prime Minister. SDP’s Zoran Milanović had a serious opponent in Primorje-Gorski Kotar County Prefect Zlatko Komadina, but managed to win convincingly. However, his victory was short-lived. After another defeat at parliamentary elections in September, Milanović would withdraw from the post and announce he was leaving politics altogether (although he is still receiving salary as a member of Parliament without ever showing up there).

In April, marathon protest held by war veterans in front of the Veterans Affairs Ministry building in Zagreb ended after 555 days. It was started during the SDP-led government as a form of pressure against “communists”. After HDZ came to power, the allegedly apolitical protest lost its purpose, so the organizers quietly announced they would pack the protest tent and leave, although none of their demands were met. Now, eight months later, the demands have still largely not been fulfilled, but somehow veterans’ associations are much more tolerant toward governments when HDZ is in power.

Economic news in 2016 were surprisingly good. GDP growth was higher than expected, and deficit lower than planned. In April, the government adopted the National Reform Programme, a document with a lofty title and some good ideas, which were all left more or less unimplemented. Still, the economy was probably the most positive part of the Croatian society in 2016, and forecast for the next year also looks good. Even credit rating agencies started changing their forecasts.

Another welcomed change is better withdrawal of money from EU funds, with Croatia finally taking out substantially more money than paying into the European budget.

The year which is about to end was exceptionally good for Croatian tourism and travel industry. Record numbers of tourists were seen in the summer months, as well as in other parts of the year, and Croatian roads, airports, marinas and seaports all broke their records. With additional investments in resorts and other infrastructure, next year seems even better.

In addition to INA, another energy issue which is constantly in the focus of Croatian politics is the LNG terminal which might or might not ever be built on the island of Krk. Everyone agrees that it would nice to have it, but no one seems ready to pay for it. The latest idea is to construct a floating instead of a land terminal, and the beginning of the construction is, as always, just six to twelve months away.

Another major project is the construction of the Pelješac Bridge, which should connect the Pelješac peninsula and the Dubrovnik area with the rest of Croatia, so that travellers do not have to cross border with Bosnia and Herzegovina. The first phase of the tender is underway and the construction should really start in second half of 2017. The European Union might even fund part of the cost.

One of the major stories in the first half of the year was the suspension of curriculum reform. The expert committee, headed by Boris Jokić, resigned due to political pressure, which was followed by large protests in support of the reform. Although the President and the government claimed that curriculum reform was one of their priorities, by the end of the year the reform was completely forgotten.

The year was also marked by the focus on demographic problems, which are a consequence of both low number of children being born and of emigration of mostly young people looking for jobs in other EU member states. Government formed after the elections in September even includes a ministry devoted partly to demographic issues, although it is clear than only economic development can change the negative trends.

In May, the largest and the final scandal of Tihomir Orešković’s government broke. Within a month, the government would collapse and new parliamentary elections would be scheduled for September. The media reported that wife of HDZ president and First Deputy Prime Minister Karamarko was paid for consulting services by a lobbyist for MOL, the Hungarian oil company which is co-owner of Croatian oil company INA. Karamarko denied there was anything wrong with the arrangement, but the opposition demanded his resignation or dismissal. Most importantly, after initial unsure reaction, MOST joined SDP and also demanded Karamarko’s resignation. It was clear that the end for the government was near. Parliament could no longer muster a quorum to make decisions, which showed that the ruling coalition had lost the majority.

Rumours started circulating that HDZ was trying to do a “coalition reshuffle”, substituting MOST with some of smaller opposition parties and independent MPs and in that way forming a new parliamentary majority. The rumours turned into confirmed reports, with the war between MOST and HDZ being waged with full force. The government was unable to even meet anymore in regular sessions, instead making urgent decisions by phone. It was clear that the government would collapse, the only question being whether HDZ would be able to form a new majority and a new government without MOST. Divisions started appearing even within HDZ, with some calling on Karamarko to resign, rather than risk early parliamentary elections.

Realizing that the majority in Parliament will surely vote for his dismissal, Karamarko instead initiated a motion of no confidence in Prime Minister Orešković, which would bring down the whole government. Prime Minister refused to resign, while HDZ named Finance Minister Zdravko Marić as their “candidate” for new Prime Minister. After the Commission for Prevention of Conflict of Interest ruled against Karamarko, he resigned as First Deputy Prime Minister, and the next day Parliament voted on the no confidence motion against Prime Minister. The motion was supported by a large majority, and so on 16 June Croatia for the first time in many years saw a collapse of government. It soon became clear that HDZ would not be able to find a new majority and that new elections would be held. Parliament was dissolved effective mid-July, with elections scheduled for 11 September.

After the debacle and under pressure from his own party, Karamarko resigned as party president, devoting his time to leisure, with moderate MEP Andrej Plenković becoming the instant favourite to replace him, helped by sympathetic media. Although several potential opponents were rumoured to stand against Plenković, in the end they all somehow decided against running, so HDZ again held party presidential elections with just one candidate. After hardliner Karamarko, many were delighted that HDZ elected a much more moderate president, from whom less extreme policies could be expected.

In the meanwhile, political parties started preparing for elections. SDP, seen at the time as the favourite, broadened its coalition, while HDZ was still preoccupied with internal party affairs. Still, after Karamarko was politically liquidated, the media started focusing on SDP president Zoran Milanović. In July, it was reported that Milanović was questioned by prosecutors about alleged money laundering. Although the Office of the State Prosecutor decided against continuing its investigation, Milanović’s reputation took a hit, which was just the start of problems for him and SDP.

The official election campaign started in mid-August with a debate between Milanović and Plenković. That was the first pre-election debate in 13 years. The debate was civil and tolerant, unlike daily exchanges of accusations which are a permanent feature of Croatia’s politics. However, the feeling was that SDP was losing its advantage which it held earlier in the summer, while HDZ under new leadership and with media support had regained its footing. And then, on 25 August, perhaps the pivotal moment of the campaign took place. The media published secret recordings of a meeting held several days earlier between Milanović and representatives of veterans’ associations. It is still not clear who recorded the meeting, but it is clear that the consequences for Milanović and SDP were devastating. On the recordings, Milanović can be heard vulgarly criticizing authorities in Serbia and Bosnia and Herzegovina, and expressing nationalistic and rightwing opinions about other matters. He even managed to personally insult mother of his opponent Andrej Plenković. While his goal was probably to try to endear himself to more rightwing voters so that he would not be accused of being a “communist”, the result was just the opposite. He was ridiculed by rightwing groups and harshly criticized by his own supporters, who were shocked by both his statements and the fact that he had met with representatives of veterans’ association who earlier tried to bring down his government. While Milanović tried to incoherently explain himself, it was all downhill for him and his party. The campaign ended with another debate between Milanović and Plenković, which was this time much more combative.

Finally, the elections took place on 11 September and brought results which just two months earlier seemed entirely impossible. HDZ was the relative winner with 61 seats out of 151, followed by 54 for SDP, 13 for MOST, 8 for Živi Zid, with the rest being divided among smaller parties and national minorities. It was immediately clear that SDP had no realistic chance of forming a ruling majority, and Zoran Milanović announced the day after the elections than he would not run for another term as party president. He would be replaced in November by Davor Bernardić.

HDZ and MOST again entered into coalition negotiations, but this time with a clear understanding that HDZ president Plenković would be the new Prime Minister. Since HDZ had an option of forming a majority with other parties as well, MOST was in a much weaker position than in previous Parliament. National minorities’ representatives also decided to support the new government, so it was clear that the government would be easily formed. MOST got four ministries, and its president Božo Petrov will be Speaker of Parliament for the first two years, followed by a HDZ candidate. The new Parliament was constituted on 14 October, and the government confirmed on 19 October.

The new government immediately ran into problems, this time with Education and Science Minister. Still, two months into their term, all ministers are still in place. Civil society organizations were delighted with the appointment of new Culture Minister instead of Zlatko Hasanbegović, although their high expectation are yet to be fulfilled.

The first two months of the new government’s term were marked with foreign policy problems. First came arrests for war crimes of Croats living in Bosnia and Herzegovina, which provoked strong reaction by the government, including from the Prime Minister who had just returned from a visit to Bosnia and Herzegovina, his first official travel abroad. There were even fears that Defence Minister Damir Krstičević could be arrested if he entered Bosnia, although that ultimately proved untrue. Then the Prime Minister went to Ukraine, his favourite country with the possible exception of Croatia, where he gave a series of statements which caused uproar from Russia and led to further deterioration of already almost non-existent relations between Croatia and Russia.

The focus returned to Bosnia and Herzegovina after President Kolinda Grabar-Kitarović said there were thousands of ISIS fighters returning to the country, which was firmly denied by Bosnian officials. The President made sure to continue being in the news after she inexplicably apologized for “mistake” of giving Serbian chocolate to children in Dubrovnik, provoking angry reactions from Serbia and worried statements from Croatian companies selling their products in Serbia.

In December, Parliament adopted the 2017 state budget, which includes substantially higher spending that in 2016. The government is very optimistic about GDP growth and budget revenues, hoping to keep the budget deficit lower then this year. It remains to be seen whether that optimism is based in reality. Another major initiative was the tax reform, which will come into effect on 1 January. Taxes have been cut for everybody, except for those with lowest salaries, although at least the minimum wage was increased symbolically. Parliament debated an initiative to lower politicians’ gross salaries so they would not benefit from the tax reform, but unsurprisingly the proposal was not adopted. After a lot of talk, Parliament finally also changed public procurement laws which should make the whole process less bureaucratic and more efficient.

While it is unlikely that anything major will happen in the few days left until the end of the year, there is no doubt that Croatian politicians will offer us a lot of excitement and news in the new year as well.


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