Croatia: Racan Resigns

Prime Minister Ivica Racan resigned today, Friday, following an assembly vote earlier this week in which only a fraction of the deputies belonging to his governing coalition partner supported a new law on the Krsko nuclear power station, which Croatia shares with Slovenia.

In a short televised speech to the nation, the Social Democrats leader blamed his decision on the Croatian Social Liberal Party, HSLS - only 6 out of its 23 deputies backed him in the vote. The ruling alliance has agreed to remain in power until a new administration is formed, most probably by the end of July.

Analysts say the premier's move is a tactical ploy. They believe he is counting on President Stipe Mesic to ask him to form a new coalition, which Racan is almost certain to agree to do, without the troublesome HSLS.

He said he would continue working for the benefit of the country and press for the reforms that are needed for its economic revival. Thanking the public for their confidence and patience, he denied there was a constitutional crisis.

Although environmental and energy concerns have weighed considerably in the debate over the future of Krsko, the vote was primarily seen as another test of Racan himself.

Conflict between the Social Democrats and the HSLS had stalled the work of government for over a year. Last July, the latter's leader Dragan Budisa engineered a crisis when he refused to back Racan's decision to cooperate with The Hague war crimes tribunal and extradite two army officers.

A new crisis erupted last winter, when Budisa resigned as leader of the HSLS. He was later re-elected and then joined the government as deputy prime minister for a few months. However, the powerful right-wing nationalist section of his party soon ensured that conflict with Racan continued.

Racan's new administration will most likely comprise his own Social Democrats, the Croatian Peasant Party, HSS, the Liberal Party, LS, the Croatian People's Party, HNS, and some regional parties. This new, restructured coalition would only form a minority administration, but there are hopes that it might nevertheless prove to be stronger and more stable than its predecessor in the run-up to next year's general election.

One route to greater efficiency might be a reduction in the number of ministries, whose proliferation is often blamed for the generally poor level of communication and coordination between the different organs of government.

In the remaining year before going to the polls, the administration will have to act fast to improve its popular standing, highlighting its achievements in altering Croatia's image abroad, attracting foreign investment and investing in prestige projects, such as the construction of a highway linking Zagreb and the country's second largest city, Split.

So far the pace of reform has been slow, though economic figures suggest the economy is gradually gathering speed. The government has also been markedly free of personal scandals.

Polls indicate that a new coalition without the HSLS, but including other leftist, centrist and regional parties and ethnic minority parties would probably win an election. Racan's latest move appears to have gone down well with the public as well as with the diplomatic community.

Priorities for Croatia if it is to continue on the path towards EU membership and attract foreign investment are reforms of the judiciary, public administration, the military and education. Without a government perceived as efficient and visionary, it will be difficult to achieve results over only a year, however.

The biggest loser from the latest political drama may be Budisa himself. He appears to have split his own party, with two of its ministers vowing to continue to support Racan and facing probable expulsion from the HSLS as a result.

In the event of its exclusion from the next administration, the HSLS looks set to drift towards the right. This does, however, make it a potential partner for the former ruling Croatian Democratic Community of Franjo Tudjman in a right-wing bloc.

Andrea Feldman is the international secretary of the Liberal Party, Zagreb, Croatia