Europe

Croatia
Last reviewed: 01 February 2008

Country information

Politics

See entire profile

Area: 56,542 sq. km (22,830 sq. mi)
Population: 4.5m (July 2004 est.)
Capital City: Zagreb (population: 800,000)
Official Language: Croatian
Religion: It is estimated that about 85% of the population is Roman Catholic. Orthodox make up around 5% of the population and Muslims a further 1.3 %
Currency: Croatian Kuna (HRK)
Major Political Parties: Croatian Democratic Union (HDZ), Social Democratic Party of Croatia (SDP), Croatian People's Party – Liberal Democrats (HNS), and a Croatian Peasant Party (HSS) - Croatian Liberal Party (HSLS) coalition
Government: Parliamentary Democracy
Head of State: President Stjepan Mesic
Prime Minister: Ivo Sanader
Foreign Minister: Gordan Jandrokovic
Membership of International Organisations: United Nations, Organisation for Security and Co-operation in Europe, Council of Europe, Regional Cooperation Council, International Monetary Fund, World Bank, World Trade Organisation, European Bank for Reconstruction and Development, Partnership for Peace.

ECONOMY

Basic Economic Facts (Source: Croatian National Bank)

GDP: €51 billion (2007)
GDP per head: €11,300 (2007)
Annual Growth: 5.5% (2007)
Inflation: 4.6% (2007)
Official unemployment: 14.3% (2007) (ILO figure 13.1%)
Major Industries: Shipbuilding, cement, chemicals, fertilisers, pharmaceuticals and tourism
Major trading partners: EU, Bosnia and Herzegovina
Exchange Rate: 9.17 Kuna/£ (April 2007)

Croatia's economy has gone through profound transformation since the country gained its independence in 1992. Today it is a functioning market economy with stable macroeconomic indicators but structural reforms are yet to be completed. The microeconomic environment and in particular the competitiveness of the local economy need to be rapidly enhanced.

At present the economy is enjoying relatively fast growth, low inflation and a stable exchange rate. The budget operated a surplus of HRK3.6bn in 2007 due to proceeds from privatisation of the state owned telecoms company T-HT. But the underlying budget deficit remains around 3% of GDP. The State still plays a significant role in the local economy and unemployment (13.1% according to ILO criteria) is high.

The key structural reform issues in Croatia are pension reform, health service reform, state subsidies and privatisation of the state portfolio. Resolving these issues would cut the public wage bill and should help provide the necessary environment to make Croatia's economy more flexible, modern and competitive.

Croatia is a member of the World Trade Organization (WTO) and the Central European Free Trade Area (CEFTA).

Further information on Croatia's economy can be found on the UK Trade & Investment Country Profile: Croatia

World Trade Organisation

Croatian National Bank

HISTORY

Recent History

The roots of Croatia’s traumatic emergence as an independent state in the 1990s go back to the Second World War (and even further). Its imore recent history was strongly influenced by Slobodan Milosevic, who came to power in the former Yugoslavia in 1989. Slovenia and Croatia, both then federal states within Yugoslavia, became disillusioned with the speed of economic and political reforms under his leadership. By January 1990 they had set themselves on the path to independence.

In 1990 the newly formed Croatian Democratic Union (HDZ) won elections installing Franjo Tudjman as President. On 25 June 1991 Croatia declared independence (alongside Slovenia). Serbia, under Milosevic, opposed the independence moves and sent in the Yugoslav army, who fought in cooperation with elements of Croatia’s Serb minority against Croatian forces in a conflict lasting for 5 years.

In December 1995, President Tudjman signed the General Framework for Peace, better known as the Dayton Agreement. Under the Erdut agreement, eastern Slavonia was put under UN administration and reverted to Croatia in 1998. The war had left 20,000 Croatians dead or missing and seriously damaged the economy. The vast majority (over 250,000) of Croatia’s Serb population had also fled the country. Milosevic would later be put on trial in the Hague on war crimes charges.

After 1995, Croatian politics was increasingly dominated by Tudjman’s brand of authoritarian nationalism. Both the economy and Croatia’s international standing suffered. The state was used to restrict media freedoms and promote the interests of those close to the President. Since Tudjman’s death in 1999, the Croatian political and economic landscape has changed dramatically.

Longer Historical Perspective

BBC News Country Timeline: Croatia

INTERNATIONAL RELATIONS

Croatia's Relations with Neighbours

Since Tudjman's death, subsequent governments have made considerable efforts to normalise Croatia's relations with her neighbours. . For example, Prime Minister Sanader and President Mesic have both made state visits to Bosnia & Herzegovina and Serbia, and Croatia has played a constructive role in the South East Europe Cooperation Process (SEECP). These efforts underline Croatia’s commitment to regional co-operation. In general relationships with neighbouring states continue to develop well, although there has been limited progress on a handful of bilateral issues, in particular regarding borders.

Croatia's relations with the UK

The UK established diplomatic relations with Croatia on 25 June 1992. Relations have gone from strength to strength since the arrest of General Ante Gotovina and his transfer to the International Criminal Tribunal for the former Yugoslavia in the Hague (ICTY) in December 2005. Croatia’s relations with the UK are currently excellent.

Under this Britain provides both political and practical support to Croatia’s efforts to join the EU and NATO, while Croatia commits to play an important and increasingly proactive role in its region and beyond (e.g.).

UK-Croatia Strategic Partnership

The UK fully supports Croatia’s EU and NATO entry bids. The 2008-09 ‘UK-Croatia Strategic Partnership’ was launched in London on 18 June by Prime Minster Gordon Brown and Prime Minister Ivo Sanader. It is the framework for bilateral co-operation. The UK is providing £600k of bilateral assistance, and 17.5% of the EU's Instrument for Pre-Accession Assistance (IPA) funding. Projects cover judicial reform, anti-corruption, organised crime, competition policy and food safety. But the relationship is very much a two-way street - the positive role Croatia can play, and is playing, in bringing the Western Balkans closer to the EU is a key element of the partnership. , as is Croatia’s contribution to the NATO mission in Afghanistanand their constructive work in the UN Security Council.

British Council

Recent Visits

Inward

18 June 2008 – Prime Minister Ivo Sanader met with Prime Minster Gordon Brown
6 December 2007 - Chief Negotiator for the Accession of Croatia to the EU, Vladimir Drobnjak met the Minister for Europe, Jim Murphy
18 July 2006 – Prime Minister Ivo Sanader met Prime Minister Tony Blair in London.
12 January 2006 – Chief Negotiator for the Accession of Croatia to the EU, Vladimir Drobnjak met the Minister for Europe, Douglas Alexander.
7 - 8 December 2005- President Mesic attended a dinner organised by the East West Institute at which Tony Blair was honoured with the statesman of the decade award, and met Deputy Prime Minister John Prescott.
29 - 30 November 2005 - President Mesic gave a lecture at the Oxford Union, and met the Lord Mayor of London, the President of the European Bank of Reconstruction and Development (EBRD) and other business leaders.
27 October 2005 - Mr Ivo Sander, visited the UK to attend the EU informal summit at Hampton Court Palace and me the Prime Minister.
20 - 21 October 2005 - Mr Neven Ljubicic, Minister of Health, attended the informal Health Ministerial Conference in Chandler's Cross, Hertfordshire and met the Health Secretary, Patricia Hewitt.
9 - 12 September 2005 - Mr Petar Cobankovic, Minister of Agriculture and Forestry, attended the Agriculture and Environment Informal Ministerial summit of EU Agriculture and Environment Ministers in London and met the Environment Secretary, Margaret Beckett.
8 - 9 September 2005 - Vesna Skare Ozbolt, Minister of Justice, and Ivica Kirin, Minister of Interior, attend the Justice and Home Affairs Informal Ministerial summit of EU Justice and Interior Ministers in Newcastle and met the Home Secretary, Charles Clarke.
1 - 2 September 2005 - Ms Kolinda Grabar Kitarovic, Minister for European Integration, visited the UK for the Gymnich Informal Ministerial summit of EU Foreign Ministers in Newport and met the Foreign Secretary.
10 - 14 July 2005, Parliamentary Delegation from Croatia visited the UK and met Douglas Alexander MP, Minister for Europe.
22 - 24 June 2005 - Mr Filip Dragovic, Assistant Minister for European Integration and Peacekeeping Operations.
20-23 June 2004 – Mr Vladimir SEKS, Speaker of the Croatian Parliament visited the UK on the invitation of the Rt Hon Michael Martin MP and met the Political Director, House of Lords committee members and Scottish parliament members.
7 June 2004 – Dr Miomir ZUZUL, Foreign Minister (HDZ) visited the UK and met with Dr Denis MacShane MP, Minister for Europe.
10-12 May 2004 – Ms Kolinda Grabar KITAROVIC, Minister for European Integration visited the UK and met Dr Denis MacShane MP, Minister for Europe and Sir Stephen Wall. She also spoke at a Chatham House event on ‘Croatia and the EU in light of the European Commission's Opinion'.
11 February 2004 – Dr Miomir Zuzul, Foreign Minister (HDZ) visited the UK and met the Foreign Secretary, Defence Secretary and Dr Denis MacShane MP, Minister for Europe.

Outward

Minister for Europe Geoff Hoon visited Zagreb on 26 March 2007, meeting President Mesic, Prime Minister Sanader and Foreign Minister Grabar-Kitarovic.
Deputy Prime Minister John Prescott visited Zagreb on 26 October 2005 and met President Mesic and Prime Minister Sanader.
Minister for Europe, Dr MacShane visited Zagreb on 19-20 April 2004 and met President Mesic, Prime Minister Sanader, Foreign Minister, Miomir Zuzul and Minister for European Integration, Kolinda Grabar-Kitarovic.

POLITICS

Recent Political Developments

President Tudjman died in 1999. The political climate started to change in January 2000 when SDP leader Ivica Racan led a coalition of opposition parties to victory in parliamentary elections. Stjepan Mesic was elected President on 18 February 2000 and was subsequently re-elected in February 2005. The new government worked to end Croatia’s international isolation and embed democracy. Relations with Croatia’s neighbours and the West improved greatly. Croatia joined the NATO Partnership for Peace (PfP) in 2000, and was accepted into NATO’s Membership Action Plan (MAP) in 2002 and was invited to join NATO in April 2008. On the EU track Croatia signed a Stabilisation and Association Agreement, the first step towards membership, in October 2001.

Current Prime Minister Ivo Sanader’s revitalised HDZ came to power in November 2003 on a pro-EU and NATO reform ticket. Croatia was accepted as a candidate for EU membership in June 2004; EU opened accession negotiations on 3 October 2005 following an assessment by the then Chief Prosecutor Carla del Ponte that Croatia was co-operating fully with the International Criminal Tribunal for the former Yugoslavia in The Hague (ICTY). On 8 December 2005, the Tribunal's last remaining Croatian indictee, General Ante Gotovina, was arrested and subsequently transferred to The Hague for trial on charges of crimes against humanity.

Parliamentary elections were held on 25 November 2007. The governing HDZ (modern-conservative) were re-elected, and a coalition under Sanader was sworn in on 12 January 2008. The opposition SDP under Zoran Milanovic are the only major party not aligned to the coalition. On issues related to EU and NATO membership there is broad cross-party consensus. The breakdown of the 152 seats as of January 2008 was:

Croatian Democratic Union (HDZ) - 66 seats
Social Democratic Party (SDP) – 56 seats
Croatian Peasant Party (HSS) and Croatian Liberal Party (HSLS) coalition - 8 seats
Croatian People's Party (HNS) - 7 seats
Croatian Democratic Alliance of Slavonia and Baranja (HDSSB) – 3 seats
Istrian Democratic Assembly (IDS) – 3 seats
Croatian Party of Rights (HSP) - 1 seat
HSU (Croatian Party of Pensioners) - 1 seat
Nation Minority Parties: Serb (3), Italian, Hungarian, Czech, Slovak, Roma – 8 seats

Presidential elections are next due in 2010. Due to the 2 term limit on office this will mean a new President will be elected. The next parliamentary elections are due in 2011.

Croatian news websites with text in English

State news agency

State television company

Croatia’s Political Priorities: European Union and NATO membership

Croatia’s foreign policy priorities remain securing membership of both the European Union (EU) and NATO. Both organisations require far-reaching domestic reform as a condition of membership, in particular the EU. These reforms continue to dominate the political landscape.

NATO

Croatia was invited to join NATO at the alliance’s summit in Bucharest in April 2008. The process of ratifying the accession protocols is now underway. In the meantime Croatia is continuing its efforts to fully implement defence reforms and integrate into NATO structures.

Croatia and the EU

The accession negotiations split the body of EU law (the acquis communautaire) into 35 ‘chapters’. These cover issues ranging from the free movement of goods and protection of intellectual property rights to reform of the judiciary, protection of fundamental rights and implementation of EU environmental standards. As of August 2008, Croatia had opened 18 chapters in the negotiations, and provisionally closed 3.

The Commission will produce a non-binding indicative timetable for Croatian membership alongside its Annual Progress Report in November 2008. This will set out what further reforms Croatia needs to undertake to conclude technical negotiations by late 2009 (meaning possible membership in 2010/11).

In its November 2007 Annual Progress Report the European Commission identified a number of areas in which further progress was needed. These included public administration reform, judicial reform, and efforts to fight corruption (all particularly demanding areas) as well as further progress on refugee return and minority rights.

United Nations

Croatia has been a member of the United Nations since 1992. It is a non-permanent member of the Security Council for the period 2008-2010. It also has the responsibility of chairing the UN’s ad-hoc Counter Terrorism Committee (CTC). The Croatian army currently participates in 11 UN peacekeeping missions around the world, including Missions in Kashmir, Sierra Leone, and Sudan. Croatia’s contribution to the International Stabilisation Assistance Force (ISAF) in Afghanistan will rise to 300 in 2008.

NATO Enlargement

UN Peacekeeping

Enlargement - European Commission