Croatia: Minority Government Survival Battle

Croatia faces instability following the formation of a right-wing government that lacks a working majority in parliament.

President Stipe Mesic on December 9 proposed Croatian Democratic Union, HDZ, leader Ivo Sanader as prime minister after the party emerged the largest in the November 23 elections.

But with only 66 of the 152 seats in parliament, the HDZ needs suitable coalition partners if it is to be able to govern.

Under pressure from the European Union, Sanader has already backed off from a coalition with the hard-right Croatian Party of Rights, HSP, a natural ally.

A second potential partner, the Croatian Peasant Party, HSS, which has nine deputies, withdrew after its leaders came under pressure from party members opposed to a coalition with the HDZ.

Not being able to form coalition, the incoming administration instead offered expensive concessions to the 11 deputies it needed to establish a minority government. They come from other small parties, including the Party of Pensioners and various ethnic minority groups.

The concessions, observers say, will bankrupt the new government.

In return for the support of the pensioner party's three deputies, Sanader has promised amongst other things pension rises that are pegged to increases in the cost of living.

Outgoing labour and welfare minister Davorko Vidovic said Sanader was "throwing dust in the eyes of the public". Describing the promises as scandalous, he said the mathematics behind them were "nonsense".

"For pensions to increase to around 70 per cent of average salaries, GDP would have to grow by 15 to 20 per cent annually. Even then it would take 15 years," he said.

Equally controversially Sanader has promised the Italian minority in Istria a bilingual policy and restitution of property seized after 1945 when the region was detached from Italy and joined to Yugoslavia.

The pledges threaten to saddle Croatia with a massive compensation bill for the former owners of Croatian property who now live on both sides of the border.

Sanader has further pledged to secure pensions for ethnic Germans in Croatia who were jailed in labour camps after the second world war. About 3,500 still live in Croatia and the money owed to them will add further to the bill.

The HDZ has offered other groups in society expensive sweeteners, including increased benefits for mothers and war veterans. Businessmen have been told VAT will be cut from 22 to 20 per cent.

How Sanader's government can square these pledges with the need to continue repayments of the country's foreign debt. It will have to pay around a fifth of its 19 billion US dollar deficit next year.

Economic experts warn that the discrepancy between promises and actual resources will hit home in March when parliament has to agree a budget.

Ante Zigman, of the Reiffeisen bank in Zagreb, said the cut in VAT alone will deny the government 500 million euro, which it cannot afford, “Not only will he [Sanader] not fulfill promises he has made but also fail to increase production as he planned, either.”

Members of the outgoing government led by Ivica Racan's Social Democratic Party are now predicting the government will fall as early as March. Racan is already touring party branches, alerting them to possibility of new elections in six months.

Alongside financial headaches, the government can expect to be buffeted by internal conflicts over the Hague war crimes tribunal, which many members of Sanader's party detest.

Demands for the surrender of a popular former army general, Ante Gotovina, indicted for crimes against humanity against the Serb minority in 1995, were a factor in bringing the HDZ nationalists back to power.

Additionally, the minority government will face strong opposition. The SDP with its 43 seats is not the only party banking on early elections. Opposition will come from left-leaning Croatian People's Party, with 11 deputies. On the right flank, the HSP, with eight deputies, has been hurt by HDZ's refusal to accept it as a partner and is planning its own revenge in parliament.

Therefore, the HDZ will have difficulty getting through any legislation that demands a two-thirds majority, such as planned constitutional changes.

Opposition attacks will increase after April, when the EU is to rule on Croatia's readiness to apply for membership of the union.

The opposition is not expected to hinder the adoption of key laws connected with membership before April, as that would damage its popularity. But once the EU makes its decision, opposition parties will no longer have any incentive to compromise for the sake of the national interest.

To pre-empt this situation, Sanader has apparently tried to win over a number of SDP deputies to his own party.

Three people on the SDP list say they were the target of Sanader's attention, namely Marko Filipovic, a popular sportsman, Ljuba Jurcic, the current economy minister, and Vesna Skulic, a deputy. All three say they turned down the HDZ, which denies it ever approached them.

Racan, however, insists that Sanader is resorting to the murky methods once employed by the former HDZ leader and Croatian president Franjo Tudjman. Tudjman's officials frequently offered opposition members political or financial bribes to defect to the HDZ.

They were used notoriously after the 1996 opposition victory in local elections in Zagreb to win over a few councillors and thus prevent the opposition from taking power in the capital.

Sanader will be Croatia's first leader of a minority government since independence in 1991. The battle for survival looks as if it has begun even before he has been appointed prime minister.

Drago Hedl is a regular IWPR contributor.