Croatia Country Report

Additional Information

The probability for preliminary elections was reduced substantially in July, after the popularity of the main opposition party SDP faded due to a controversial construction project in Zagreb, and after the signing of a letter of support between PM Kosor and the three independent MPs. Still, the eased pressure on the government will probably be temporary, since there are still no visible results in terms of economic progress or successful ongoing reforms, except for the closing of another two chapters from the EU accession talks. The threats for mass protests and general strikes by the public sector in September and the slim parliamentary majority made it urgent for PM Kosor’s government and the ruling coalition to present positive results, which so far can be observed only in the foreign policy. The economy showed no major changes compared with the previous months, with the decline of industrial production accelerating in June and public debt reaching a new record high in April. Although foreign debt contracted in April and unemployment rate continued to fall in June, the only long-lasting development is still the narrowing trade gap, which reflects weak domestic consumption rather than positive changes in exports.