Vol 1, No 25
13 December 1999
C R O A T I A:
The End of an Era
A couple of weeks before the end of the century, Croatia once again proves its long-lasting reputation of being a unique European country. Indeed, no other state in the old continent (and most probably in the world) is in such a peculiar situation - Croatia will enter the year 2000 without a President and without a Parliament. The country's first President after its independence, Franjo Tudjman, died on 10 December, while the Parliament's lower house was dismissed on 27 November after the expiration of its four-year mandate. The parliamentary elections were called for Monday 3 January 2000, the first working day in the new millennium and, according to the Constitution, the presidential elections have to be carried out by 8 February 2000 at the latest.
So, the following weeks and months will undoubtedly be decisive in shaping the country's long-term political future. These profound changes already began, however, earlier this year, making it arguably the most eventful year since the end of the war.
The year 1999 started with the outbreak of a severe economic crisis, which culminated in March with the bankruptcy of more than a dozen small and medium-size banks. The avalanche was initiated by an affair with the Dubrovnik bank, whose manager ended up in jail, accusing at the same time some high-ranking state officials of financial malversation. As on many similar occasions previously, the state intervened and invested a huge amount of money trying to save the bank, deciding at the same time to put an end to the rise of the newly established business empires, like that of the Herzegovinian tycoon Miroslav Kutle, who in only a few years managed to acquire ownership of several of the most prosperous Croatian companies, which were in turn fully or partly devastated by his policies. Of course, Mr. Kutle would have not been able to acquire such wealth overnight were it not for a generous help of the ruling party's (Croatian Democratic Union - HDZ) structures. They, however, realised at some point that this type of "tycoon privatisation" threatened to destroy their whole power base and Mr. Kutle is now facing several accusations of financial crime before the court. The crisis reached so far that at its peak President Tudjman himself had to address the nation and promise to undertake measures so that the economic situation would improve. He offered his guarantee for the payment of money blocked in banks that had gone bankrupt, and assured the public that the exchange rate of the domestic currency, the kuna, would not be changed in relation to the German Mark, to which it was pegged in 1993.
The crisis, of course, could not be stopped by administrative measures only. In a country in which industrial production was virtually stopped or severely reduced for a number of years, and that for a long time was oriented almost exclusively towards trade, maintaining at the same time a fixed exchange rate, the economy was bound to crumble. It happened in 1999 on a mass scale and left the government with extremely serious problems. The official unemployment rate is higher than 20% and all macro-economic indicators, like GDP growth and budget deficit, are showing negative trends. The "Croatian economic miracle", as it was called by President Tudjman (who often claimed that Croatia was economically the most successful post-Communist country) became a nightmare for politicians and system economists who found themselves unable to cope with the growing problems. As the elections were approaching and the dissatisfaction of the population became more obvious, they realised that something had to be done urgently. The joker-card was the privatisation of the Croatian Telecommunication Company that was sold to Deutsche Telekom for some USD 800 million, which contributed significantly to filling the holes in the state budget. Needless to say, such a step brought only temporary relief. It is certain that any future government will have an enormous load of work to do in order to correct the mistakes committed over the last ten years.
Political turning points
From the political point of view, 1999 was a turning point in many respects. The ruling party, pressured by obvious shifts in the electorate's concerns, showed signs of panic. A number of its highest-ranking officials left the party in Spring after a very unpleasant affair centred around abuses by the secret services, which were proved to have tapped the phone calls or followed journalists from the independent newspapers. This affair caused a large public discussion on the role of Croatia's numerous secret services, which were suspected of working for the sole benefit of the ruling party. It even provoked a parliamentary crisis when MPs from the opposition decided to resign from their positions in the parliamentary committees after the ruling party rejected their demand for a parliamentary hearing on the matter. Chief of Staff of the President's Office and former Prime Minister Hrvoje Sarinic, and Minister of Defence Andrija Hebrang, two of the closest collaborators of President Tudjman, resigned from their duties, followed closely by other ministers such as Miroslav Separovic and Milan Ramljak, both former ministers of justice.
These events, and some that followed, initiated further differentiation within the HDZ, which split more or less clearly into three factions. One of these is right-wing-nationalist and is led by Ivic Pasalic, advisor in the President's Office, and Ljerka Mintas-Hodak, Deputy Prime Minister, an influential lady who had been appointed by President Tudjman to be in charge of the HDZ's preparations and organisation of elections. The second faction is led by the Deputy Speaker of the Parliament, Vladimir Seks, and has the strongest base within the party. Although also conservative and nationalist, Seks is perceived mainly as a very skilful political manager and was the main negotiator on the side of the HDZ in the talks with the opposition about the electoral law. The third faction, although perhaps the weakest, may play the most important role in the future of the party and the country as a whole. It is led by the Deputy Prime Minister and Foreign Minister Mate Granic, considered to be a pro-European moderate, who not only has the support of the electorate (the most recent public opinion polls indicate that he would win the presidential elections with 51% of the votes, as compared to the opposition leader Ivica Racan who would score only 37%), but also of the international community, and in particular the United States, who see in Granic a person who would be willing to lead Croatia toward Europe and to start real democratisation in the country.
The balance of forces within the HDZ has so far been very delicate. None of the factions seems to be able to take power on its own and each needs the support of one of the other factions. So far, this deal has not been brokered and it remains to be seen what will happen to the HDZ after the elections and now that President Tudjman is not on the scene anymore. It is very likely that the party will split, but it is still impossible to predict how each of the factions will act. It will be especially important to observe what the behaviour of the army and police structures will be since there is some suspicion in the public mind that the army and police, a traditional pool of HDZ voters and sympathisers, would not be ready to accept the HDZ's electoral defeat. However, the Defence Minister Pavao Miljavac, who seems to be rather moderate, has repeatedly assured the public that the army would not assume any tasks that are not prescribed to it by the Constitution.
Croatia's complex relations with NATO and the EU
The Army has had one of the key roles in Croatian society during and after the war. Led by the Minister of Defence Gojko Susak, Tudjman's closest ally until his death last year, the Army was perceived as a stronghold of the so-called Herzegovinian lobby, whose informal leader was Susak himself. This lobby remains strong, as can be seen from its very resolute opposition to Croatia's co-operation with The Hague International Criminal Tribunal for Crimes in former Yugoslavia (ICTY). In Autumn 1999, the Croatian side's refusal to extradite the war crimes suspect from Herzegovina Mladen Naletilic-Tuta brought Croatia closer than ever to UN sanctions. The President of the ICTY Gabrielle Kirk MacDonald even officially reported Croatia to the UN Security Council as a country that refuses to co-operate with the Tribunal. Thus, the relations of Croatia with the international community have reached the lowest level since their temporary improvement during the Kosovo crisis, when Croatia functioned as one of NATO's allies. The door of Partnership for Peace, therefore, remained closed to Croatia for some time to come.
The Pact on Stability in South-Eastern Europe, signed after the end of the Kosovo war, did not actually prove to be a very efficient tool for the improvement of these relations, and its effects are still very limited. Apart from participation in a few economic projects, like the construction of the Adriatic highway, Croatia has been rather reserved toward the Pact as official circles perceive this Pact as one possible means towards re-establishing some kind of Balkans confederation, which is, in turn, unacceptable for official Zagreb.
Relations with the EU have not improved either. Croatia remains the only country in Europe (with the exception of FR Yugoslavia) that has no formal co-operation with the EU. The EU Council of Ministers has repeatedly emphasised the need for further democratisation in Croatia as the key precondition for improvement of relations. Three topics have recently been on the agenda of talks between Croatian and EU representatives: improvements in the electoral legislation, democratisation and opening of the state-controlled television, and the return of Serb refugees to Croatia. While the new electoral law has been passed and was evaluated relatively positively by the international community, the latter two issues remain a key problem in relations between the two sides. Croatian Radio and Television (HRT) is heavily state-controlled by the state, i.e. by the ruling party, and is seen as its most powerful propaganda tool in the upcoming election campaign.
Heated debate over the new electoral law
The new electoral law was definitely the longest and the most heatedly debated political issue in Croatia this year. The negotiations on electoral legislation (accompanied by the public discussion - the first of its kind in the last ten years), were at times very troublesome. The "Opposition Six", an alliance of six main opposition parties - the Social-Democratic Party of Croatia (SDP), the Croatian Social-Liberal Party (HSLS), the Croatian Peasants' Party (HSS), the Croatian People's Party (HNS), the Liberal Party (LS) and the Istrian Democratic Party (IDS), founded in late 1998, passed its own proposal for the new electoral law to parliamentary procedure. That law prescribed the maintenance of the mixed electoral system, no thresholds, and cancellation of the special procedure for election of representatives of the Croatian Diaspora to Parliament. However, the ruling party opted for another solution. Using its parliamentary prerogatives, the HDZ's main negotiator, Vladimir Seks, appointed an ad-hoc Expert Group that elaborated the draft law on elections, proposing proportional elections in ten constituencies and a 5% threshold, leaving the problem of Diaspora voting to political negotiations.
These negotiations lasted for nearly nine months and ultimately did not yield any success. On several occasions, the opposition conditioned the negotiations on concessions in other fields (like opening the debate on the secret services, passing the new law on television or clarification of the President's statement to foreign journalists on his acceptance of electoral results), and the ruling party used its majority in Parliament to reject the opposition's draft law and pass its own law. The result is that the electoral system will be proportional, with the number of MPs increased from 120 to 140. Croatia will be divided into 10 constituencies, with the eleventh for voting abroad (Diaspora list) and the twelfth reserved for elections of five representatives from national minorities (whereby the number of Serb representatives in the Parliament was reduced from three to one). Thus, Croatia got its fourth law on elections in last nine years and became the only post-Communist country in Europe to carry out parliamentary elections using different a electoral model in each of the four election cycles.
Another hot issue in the negotiations between the ruling party and the "Opposition Six" was the date of elections. From the constitutional point of view, the new Parliament has to hold its first session by 27 January 2000. The HDZ played this date game very skilfully, announcing that the elections would most probably take place around Christmas. This is the time when the majority of Croats residing abroad (a group traditionally inclined towards the ruling party) visits the country and when it would be more difficult for international institutions to organise the observation of elections. President Tudjman even unofficially announced in October that the day of elections would be Wednesday, 29 December 1999.
President Tudjman's condition worsens drastically
However, on 1 November, President Tudjman was urgently transferred to hospital with a perforated colon, the result of a disease that was first discovered in 1996. He underwent several operations but did not recover and his health continued to deteriorate until his death on 10 December. During these 40 days the country witnessed a real institutional crisis: Mr. Tudjman was not able to call for elections (which is the exclusive prerogative of the President of the Republic), while the Constitution prescribed only the possibility of the President's permanent disability in performing his duties (which, for obvious reasons, the HDZ did not want to use). Pressured by the approaching deadlines for elections, the ruling party decided instead to change the Constitution and introduce a condition of temporary disability. Although the opposition was against such an option, the majority in the parliament voted for the changes and the Speaker of the Sabor, Vlatko Pavletic (HDZ), temporarily took over the duties of the President. On the very next day, he called for elections on 3 January 2000. As a result the official electoral campaign only starts on 14 December and will last no more than two weeks. In addition, the President's illness and death caused a long break in all public party activities, which brought the opposition parties into a very unfavourable position. They strongly protested against this choice of date for the elections since they believed it represented a manipulation of the electorate. However, they did agree to take part in the elections and presented their candidates in each of the eleven constituencies.
Despite some expectations, the parties of the "Opposition Six" will not run in the elections together. In early Autumn, the two strongest opposition parties, the SDP and the HSLS, decided to enter a formal coalition and run in the elections with joint lists. The other four parties (HSS, LS, HNS and IDS) then opted to make another coalition (in some constituencies together with a fifth party, the Action of Social-Democrats of Croatia, ASH). Thus, the formula 2+4, confirmed in the public opinion polls as potentially the most rewarding for the opposition, will be used. On 1 December, all six parties signed an agreement on pre- and post-electoral co-operation, committing themselves to form a government together after the possible victory at the elections and not to enter any kind of post-electoral alliances with the HDZ.
The polls, conduced by several international organisations and domestic media, all show that the SDP-HSLS coalition will clearly win the elections, with some 35% of the votes. The HDZ would score 24%, the Group of Four 18%, while the right-wing coalition of the Croatian Party of Rights (HSP) and the Croatian Christian-Democratic Union (HKDU), a likely ally of the HDZ after the elections, would get 6%. If the results of elections really follow these indications, the "Opposition Six" would have a clear majority in parliament, but not necessarily the two-thirds majority crucial for the changes in the Constitution needed to change from the semi-presidential to the parliamentary system of power. This issue is of extreme importance, especially concerning the fact that the presidential elections have to take place by 8 February 2000. In the current system, the President of the Republic has virtually all the power, while the government and parliament are almost completely marginalised. If the opposition wins the elections, the presidential authority may be used for preventing it from forming the government, similar to the situation in 1995 when President Tudjman refused to accept four consecutive mayors of Zagreb proposed by the opposition that had won the local elections.
It is still unclear, however, if the new Parliament and Government will be constituted before the presidential elections (i.e. with Pavletic as Acting President) or not. The temporary solution might be provided if the new Speaker of the Parliament, who will replace Pavletic on the post of Acting President until the election of the new President is concluded, appoints the government without delay, with the necessary confirmation by the Parliament. However, that government may be dismissed by the new President after he takes up Office, which could lead to a long and highly unpredictable constitutional crisis. Another possible problem might also be the HDZ's majority in the upper house of the Parliament, which has a veto right on all the laws and decisions passed by the lower house and whose mandate lasts until April 2001.
So, the ball is now, once again, in the HDZ's court. They have to make a crucial decision on the day of the presidential elections. The opposition argues that it would be better to carry out the parliamentary and presidential elections at the same time and thus reduce the potential for crisis (and enable the conducting of an election campaign in more normal circumstances). The HDZ, however, seems not to be eager to accept the postponement of the parliamentary elections, since they see in this interim period the possibility of diverting events to their benefit. The following months will therefore sdefinitely show if the HDZ is ready to open a space for the process of democratic change in Croatia and if the country is able to cope with important legacies of the Tudjman's era.
In spite of the words of glorification heard from all the political elements in the country on the occasion of his death, it is clear to many that the way Mr. Tudjman led the country burdens the political elite with significant problems. Albeit unquestionably the leading political personality of the Croatian road to independence and international recognition, President Tudjman did not manage to overcome certain historical legacies, thus practically postponing the transition of Croatia toward a consolidated and stable democracy without potentially disruptive societal cleavages. The events and dilemmas opened by recent events clearly confirm that the political system was tailored to his rule and that his successors will have a very difficult time in coping with the growing challenges.
In conclusion, it is clear that Croatia is entering a new millennium facing some crucial events. By casting their ballots, the voters will decide on the parties they would like to represent them in the Parliament and on the new President who will lead the country in the next five years. However, it seems that these acts will represent only the initial stage of very significant changes that are awaiting Croatia in the post-Tudjman era. The real democratisation of society, major economic problems, re-definition of Croatia's relations with the EU and other international organisations, troublesome relation between Croatia and its neighbouring countries, are only some of the important and very complex issues that will be on the agenda in the forthcoming year. Whoever takes up the vacated offices will certainly not have an easy task.
Sasa Cvijetic, 12 December 1999
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