{"id":1886,"date":"2024-04-29T01:21:36","date_gmt":"2024-04-28T23:21:36","guid":{"rendered":"https:\/\/www.uaace.org\/?page_id=1886"},"modified":"2026-06-19T22:36:08","modified_gmt":"2026-06-19T20:36:08","slug":"module-6-harmonisation-of-the-ukrainian-legislation-with-the-eu-law-the-path-of-the-republic-of-croatia-and-experience-for-legal-reforms-in-ukraine","status":"publish","type":"page","link":"https:\/\/www.uaace.org\/?page_id=1886&lang=en","title":{"rendered":"Module 6. Harmonisation of the Ukrainian legislation with the EU law: the path of the Republic of Croatia and experience for legal reforms in Ukraine."},"content":{"rendered":"

\u041d\u0430\u0442\u0438\u0441\u043d\u0456\u0442\u044c \u0441\u044e\u0434\u0438, \u0449\u043e\u0431 \u043f\u0435\u0440\u0435\u0433\u043b\u044f\u043d\u0443\u0442\u0438 \u043c\u0430\u0442\u0435\u0440\u0456\u0430\u043b\u0438 \u0443\u043a\u0440\u0430\u0457\u043d\u0441\u044c\u043a\u043e\u044e \/<\/a>\r\nClick here to view the materials in Ukrainian\u00a0<\/a><\/span><\/span><\/p>\r\n\r\n

Croatia: Political Evolution and Relations with the EU<\/strong><\/span><\/h2>\r\n

Apart from negotiating its EU membership and being the frontrunner in South-Eastern Europe, Croatia has been a full member of the Union for the Mediterranean (UfM) since 2008. Its geographical position affords it possibilities to play a \u201cbridging\u201d role between Central, Eastern and South-Eastern Europe and the Mediterranean. Croatia welcomed the different components of the reformed Barcelona Process, particularly the opening up towards all coastal Mediterranean countries, including those on the Adriatic, the strengthening of the political relationship, the stronger \u201cownership\u201d of the process, the cooperation on equal footing and the greater visibility of the relationship through big regional and sub-regional projects. The pooling of efforts and resources will hopefully contribute to dealing with common problems and challenges in the Mediterranean region. In March 2009, the Croatian Parliament expressed its intention to join the Euro-Mediterranean Parliamentary Assembly (EMPA). Croatia already benefits from EU funds for transport, the environment and civil protection in the Mediterranean. The Croatian network for Euro-Mediterranean cooperation, coordinated by the National Foundation for Civil Society Development, is one of the fastest growing national networks in the Anna Lindh Foundation. Croatian academic society took part in developing the joint strategy \u201cMediterranean 2020.\u201d<\/span><\/p>\r\n

The year 2009 was supposed to be a crucial one for concluding Croatia\u2019s negotiations on EU membership. However, it was a year of internal political transformations, characterised by unexpected changes in the government, the impact of the economic recession, the fight against corruption, the continuation of negotiations with the EU and presidential elections.<\/span><\/p>\r\n

Europeanisation of Governance Practice<\/strong><\/span><\/p>\r\n

In Croatia the year 2009 was strongly marked by changes in the government. Croatia\u2019s Prime Minister Ivo Sanader, the former leader of the Croatian Democratic Union (HDZ), unexpectedly resigned on 1 July in the middle of his second term. He was first elected in 2003 and was re-elected in November 2007. Sanader\u2019s resignation came as a total surprise for the country and international observers, and he left questions about the reasons for his decision completely open. His work had previously been well-regarded in the EU, where he had good reputation, but in the final months of his political career, and particularly after his resignation, his name was linked to several corruption scandals in the country. The timing of his resignation was extremely bad \u2013 the economic situation in the country was unfavourable with clearly visible spill-over effects from the global crisis, while the negotiations with the EU were blocked. Having once been a political winner (his government began the accession negotiations with the EU in 2005 and led the country into NATO in early 2009), he become a political loser overnight.<\/span><\/p>\r\n

Sanader was succeeded as Prime Minister on 6 July by his former deputy Jadranka Kosor, also from the HDZ party. The new Prime Minister soon proved to be a strong leader, determined to maintain Croatia\u2019s commitment to EU accession and efficiently tackling corruption, the economic recession, relations with Slovenia and the ongoing negotiations with the EU. Kosor has deepened a series of reforms and launched investigations into state-owned firms. Sanader\u2019s resignation does not seem to have marked a definitive intention to withdraw from active politics. On the contrary, his come-back bid in early 2010, seen as an attempt to interfere with the government and leading party activities, resulted in his exclusion from the party, where he had held the position of honorary president since his resignation in July.<\/span><\/p>\r\n

The new Prime Minister Kosor has given impetus to the Europeanisation of governance practice, showing strong political will and support for the fight against corruption and organised crime. Investigations on high-level corruption have been initiated, and several highly positioned managers and officials have been detained. The Deputy Prime Minister in charge of economic policy has resigned, and the immunity of certain former politicians has been lifted. The total number of corruption cases investigated so far has increased and the legislative framework has been improved. Several cases with state-owned companies in particular, including Podravka, Croatian Motorways, INA (the national oil company) and others, could be mentioned as examples. However, much remains to be done to foster a culture of political accountability for corruption at all levels.<\/span><\/p>\r\n

It should be mentioned, by way of example, that according to the\u00a0Global Corruption Report 2009<\/em>\u00a0published by Transparency International, Croatia ranked 62 out of 180 countries, with a score of 4.1. The scores, ranging from 0 (totally corrupt) to 10 (no corruption), show how a country compares to others in the index and indicate the perceived level of public-sector corruption in a country. In 2009, Croatia scored lower than in 2008 (4.4), meaning there is a need for more efficient implementation of reforms in public administration (where public procurement remains the main source of actual and potential corruption) and the judiciary.<\/span><\/p>\r\n

The country is heavily indebted, with an external debt of more than 80% of GDP. However, in spite of these negative trends, its macroeconomic stability has been preserved. Croatian political analysts forecast that a slow economic recovery may begin at the end of the year<\/span><\/p>\r\n

In late autumn Croatia was the scene of hard-fought presidential campaigns. The highly-educated, pro-Europe, Social Democrat law professor and classical music composer Ivo Josipovi\u0107 won the Croatian presidential elections on 10 January 2010. Josipovi\u0107 campaigned under the slogan \u201cJustice for Croatia,\u201d focused on the fight against corruption and won with the support of over 60% of the voters. The newly elected President Josipovi\u0107 is expected to forge an efficient alliance for reform with the Prime Minister, which could help to achieve the critical mass between the two strongest parties required to bridge their different interests. While most of the executive power, especially on economic issues, lies with the Prime Minister, the President has control over the armed forces and co-creates foreign policy with the government. He is moreover responsible for the overall functioning of the state governance system through coordination and oversight of the work of state authorities.<\/span><\/p>\r\n\r\n

Towards a Slow Economic Recovery<\/strong><\/span><\/p>\r\n

Initially, the country was not that strongly affected by the crisis, thanks to the wise policy of the Croatian National Bank, which aimed to curb loans and foreign debt. In March, the magazine\u00a0The Banker<\/em>\u00a0named Governor \u017deljko Rohatinski both Best Central Bank Governor in Europe and Best Central Bank Governor in the World in 2008. The measures undertaken by the National Bank helped the economy ride out the first wave of the crisis more easily. However, in the first nine months of 2009 GDP dropped by almost 7%, as compared to the previous year when the Croatian economy grew at an annual rate of 5.5%. This came on the heels of seven years of continuous growth. The fall could partly be attributed to spill-over from the global crisis, but at the same time it was the result of economic weaknesses in the country accumulated in previous years. Public consumption and investment were down, in contrast to public spending, which remained high, accounting for some 48% of GDP. The country is heavily indebted, with an external debt of more than 80% of GDP. However, in spite of these negative trends, its macroeconomic stability has been preserved. Croatian political analysts forecast that a slow economic recovery may begin at the end of the year.<\/span><\/p>\r\n

The National Bank has warned that the recession will not be resolved if it is understood merely as a \u201ctemporary halt\u201d to positive long-term trends in economic growth and development. On the contrary, it must primarily be regarded as a warning of the consequences of neglecting the sustainability of economic growth. Dealing with problems in an efficient and targeted way and speeding up reforms are seen as a much better solution than relying on the IMF (Rohatinski, 2009). The government\u2019s first, highly unpopular response to the economic crisis was to cut public-sector wages. This was followed by three budget adjustments, which were too small to close the gap. Heavier budget cuts, increasing budgetary revenue and sound fiscal policy will be crucial in the coming period. The key challenges remain deeper and faster structural reforms that reduce state interventions in the economy, stimulate employment and remove administrative barriers from the economy.<\/span><\/p>\r\n

The problems seem to have evolved from \u201cover-accelerated growth\u201d to \u201chard lending.\u201d Key policy players are focussing on how to mitigate the effects of the spill-over from the global crisis on the country and reduce deficits and imbalances. However, the National Competitiveness Council has warned that decisiveness and speed in implementing structural reforms, further market liberalisation and developing a business-friendly environment are crucial to increasing economic competitiveness. In this regard, Croatia\u2019s global competitiveness has stagnated or even fallen since 2006. In its\u00a0Global Competitiveness Report 2008-2009<\/em>, the World Economic Forum ranked Croatia 61 out of 134 countries (as compared to 57 in its previous report).<\/span><\/p>\r\n

Nevertheless, in spite of these economic problems, Croatia remains the best performing country from South-Eastern Europe engaged in the EU accession process and a regional success story, playing the role of anchor for political stability in the region.<\/span><\/p>\r\n

The End of Negotiations with the EU in Sight<\/strong><\/span><\/p>\r\n

The accession negotiations with the EU, which started in 2004, fell behind schedule in 2009 when they were blocked by neighbouring Slovenia for nine months beginning in December 2008. The reason for this was a bilateral border dispute regarding Piran Bay. The European Commission\u2019s indicative Road Map for concluding the technical negotiations by the end of 2009 therefore could not be met, and its attempts to find a solution bore few results. The two countries were expected to find their own way out. The Croatian view that bilateral issues should be dealt with separately from the negotiations was not accepted. Bilateral negotiations between the Prime Ministers of Croatia and Slovenia (Kosor and Pahor) led to an agreement on 11 September 2009 on the means for resolving the bilateral border dispute. The Croatian-Slovenian arbitration agreement, signed on 4 November, laid the foundations for fully resolving the border dispute once the ratification procedure had been completed by both countries\u2019 Parliaments. This marked the re-opening of the negotiations on Croatia\u2019s EU membership.<\/span><\/p>\r\n

By the end of 2009, Croatia had opened 28 of the 35 negotiating chapters, and 17 of them had been provisionally closed. The five remaining chapters are competition policy, fisheries, judiciary and fundamental rights, the environment and Common Foreign and Security Policy (CFSP). Three of these are still being blocked by Slovenia. The most difficult chapter seems to be that on judiciary and fundamental rights, including the fight against corruption and organised crime. The promotion of minority rights, including refugee return, the holding of war crime trials and the provision of access to documents for use by the International Criminal Tribunal for the former Yugoslavia (ICTY) are high on the agenda. Another important issue is public administration reform, which means strengthening the procedures and administrative capacities of relevant institutions, strengthening the civil service and depoliticising the public administration. Competition policy is likewise an important area, where the restructuring and privatisation of shipyards is slowly approaching the final stage.<\/span><\/p>\r\n

Croatia remains the best performing country from South-Eastern Europe engaged in the EU accession process and a regional success story, playing the role of anchor for political stability in the region<\/span><\/p>\r\n

The financial package for Croatia\u2019s first two years of EU membership was adopted in December, based on the \u201cworking hypothesis\u201d that Croatia will join the EU in January 2012. Similar packages were prepared for the countries that joined the EU in its fifth enlargement. The package covers the first two years of eventual EU membership, namely 2012 and 2013, which are also the last two years of the current seven-year EU Financial Perspective. Around \u20ac3.5 billion of EU budgetary funds will be allocated to Croatia. This is significantly higher than the current level of pre-accession support, and the absorption capacity in public administration should thus be raised. Croatia will be able to access most of the resources through the Cohesion and Structural Funds, as well as through direct payments to farmers and funds for rural development and fisheries. Finally, according to Commission estimates, Croatia is expected to pay \u20ac609 million into the EU budget in its first year of EU membership and \u20ac647 million in 2013. The work on drafting the Accession Treaty began in December 2009.<\/span><\/p>\r\n

The recession seems not to have strongly affected the attractiveness of EU membership in Croatia, bearing in mind that support for accession was never very high even before it hit. Support for membership among Croatian citizens is rather low and varies according to different public opinion surveys. The Autumn 2009 Eurobarometer Survey showed only 24% of Croatian citizens supporting EU membership. Lower support was found only in some of the new EU Member States most strongly hit by the crisis (e.g., Latvia 23%). Some Croatian public opinion polls have shown a more optimistic attitude towards EU membership, albeit still not much higher than 50%. However, the government will have to make an additional effort to communicate with citizens regarding EU accession and focus on elaborating the benefits of future EU membership. According to current provisions of the Croatian Constitution (Article 141), accession to the EU must be confirmed in a referendum by a majority of the total number of electors in the country, which would be very difficult to achieve in current circumstances. Together with other necessary amendments to be made to the Constitution due to the requirements of different negotiation chapters, this issue is also being debated in the country. The work on Constitutional amendments began in October 2009, and the result is expected to establish similar requirements regarding the referendum on EU membership to those found in other acceding countries.<\/span><\/p>\r\n

The recession seems not to have strongly affected the attractiveness of EU membership in Croatia, bearing in mind that support for accession was never very high even before it hit<\/span><\/p>\r\n

In 2009, public attention was focused on two key issues affecting Croatian accession to the EU. The first was the EU\u2019s ability (or inability) to act as a soft power in finding solutions to bilateral disputes between EU Member States and acceding countries that hamper the negotiation process (such as Croatia and Slovenia, Turkey and Cyprus, or Macedonia and Greece). The second was EU institutional transformation and ratification of the Lisbon Treaty. The Treaty\u2019s entry into force paved the way for Croatia\u2019s and other accessions to the EU. Being the first country in the queue for EU membership, Croatia followed the ratification process primarily from the vantage point of its potential impact on enlargement.<\/span><\/p>\r\n

The forecasts regarding the conclusion of negotiations with the EU are optimistic. Croatia may be able to conclude all the chapters by the end of 2010, if the speed of the reform process allows it to meet all the remaining benchmarks. How fast the Accession Treaty is ratified will be another key factor in defining the date of accession, which is unlikely to be earlier than 2012 or early 2013. However, the success of the accession process will ultimately depend on how effectively Croatia implements the reforms.<\/span><\/p>\r\n

References<\/strong><\/span><\/p>\r\n

Commission of the European Communities.\u00a0Croatia 2009 Progress Report 2009<\/em>. Brussels, 14 October 2009. SEC(2009) 1333.<\/span><\/p>\r\n

Rohatinski, \u017deljko.\u00a0Economic Crisis and Monetary Policy<\/em>. Croatian National Bank, 2009. Available at:\u00a0www.hnb.hr\/govori-intervjui\/govori\/egovor-rohatinski-7-7-2009.pdf<\/a><\/span>.<\/span><\/p>\r\n

Transparency International.\u00a0Global Corruption Report 2009. Corruption and the Private Sector<\/em>. Cambridge: Cambridge University Press, 2009.<\/span><\/p>\r\n

World Economic Forum.\u00a0The Global Competitiveness Report 2008-2009<\/em>, 2009.<\/span><\/p>\r\n

The fading star pupil: ten years of Croatia\u2019s membership in the European Union<\/strong><\/span><\/p>\r\n

A decade ago, on 1 July 2013, the Republic of Croatia became a member of the European Union. Despite being the newest EU member, it is one of the countries in Southeastern Europe that have made the most headway in the integration process.<\/span><\/p>\r\n\"\"\r\n

In 2023, it was admitted to both the Schengen area and the eurozone, a feat that has eluded both Bulgaria and Romania, even though they joined the EU a few years earlier. Membership in the EU has brought some economic benefits to Croatia, such as stable economic growth, a gradual rise in living standards and a drop in unemployment, but its poor absorption of EU funds, the inefficiency of its state institutions and structural problems in its national economy have prevented it from taking full advantage of these opportunities. Moreover, the free movement of people has exacerbated negative demographic processes. Nevertheless, Croatia has to some extent benefited from its membership in the EU. Thanks to the EU-funded LNG terminal on the island of Krk, it has an opportunity to become an important player in ensuring energy diversification in the region. Croatian officials have successfully used their presence in the EU institutions to raise the issue of their compatriots who live in Bosnia and Herzegovina to the level of transnational debate. However, it appears that Croatia has failed to take full advantage of its leverage in the Western Balkans.<\/span><\/p>\r\n

From Eurosceptics to moderate\u00a0Euro-optimists<\/strong><\/span><\/p>\r\n

Croatia\u2019s integration with the EU began a decade after it gained independence in 1991. To reach this milestone, it was necessary to democratise the country. This process picked up speed after 1999, following the death of President Franjo Tu\u0111man, the father of the country\u2019s independence but also a politician with authoritarian tendencies. Initially, public attitudes towards the country\u2019s potential membership in the EU were rather negative. At the heart of this Euroscepticism was the reluctance to cede the competences of a newly established state. Opponents of accession to the EU also believed that Croatia was too small to have real clout on the European arena. In addition, the issue of cooperation with the International Criminal Tribunal for the former Yugoslavia (ICTY), one of the political conditions for closer ties with the EU, was highly controversial. The capture and The Hague tribunal\u2019s 2011 conviction of retired generals Ante Gotovina and Mladen Marka\u010d heightened discontent among the public, which saw them as national heroes rather than war criminals. In that year, only 23% of Croatian people expressed support for the country\u2019s EU integration.<\/span><\/a>[1]<\/sup><\/a>\u00a0In 2012, these two men were acquitted.<\/span><\/p>\r\n

The escalating territorial dispute with Slovenia added to the Eurosceptic sentiment. Slovenia made its agreement to Croatia\u2019s further progress in European integration conditional on a favourable delimitation of the two countries\u2019 maritime border in the Bay of Piran. Fearing the outcome of the accession referendum, the Croatian government abolished the requirement for a 50-percent turnout. Although 66% of citizens eventually voted in 2012 in favour of joining the EU, the scant enthusiasm for accession was reflected in the low turnout of only 43% \u2013 one of the lowest in the EU\u2019s history. However, the Croatian people have gradually gained confidence in the EU and its institutions, mainly due to the disillusionment with their own political class. According to a survey conducted in 2013, the year of the country\u2019s EU accession, 36% of them trusted EU institutions, while confidence in their own government and in the unicameral parliament, the Sabor, stood at just 16% and 12% respectively.<\/span><\/a>[2]<\/sup><\/a>\u00a0In the same survey conducted a decade later, 52% expressed trust in the EU while only 23% had confidence in both the government and the national parliament.<\/span><\/a>[3]<\/sup><\/a><\/span><\/p>\r\n

Tourism-dependent economy<\/strong><\/span><\/p>\r\n

A good economic performance in the post-accession period, popular EU-funded projects and the success in joining the Eurozone and the Schengen area (especially when compared to Romania and Bulgaria, which remain outside these integration circles) have likely contributed to the positive assessment of the country\u2019s EU membership. However, Croatia has so far failed to use its accession as an impetus to overcome the main challenges facing the country, such as low productivity, pervasive corruption (the country ranks fourth from the bottom in the EU in terms of perceived corruption)<\/span><\/a>[4]<\/sup><\/a>, a shortage of educated workforce and emigration.<\/span><\/p>\r\n\"\"\r\n

Chart 1. Dynamics of Croatia\u2019s economic growth compared to the countries of the region<\/span><\/p>\r\n

Source: author\u2019s own compilation based on data from Eurostat.<\/span><\/p>\r\n

Croatia entered the EU while still suffering the consequences of the 2008 global financial crisis in the form of a prolonged recession. Access to the single market and EU funds allowed it to return to the path of stable (albeit not very high) growth, which averaged 2\u20133% of GDP between 2015 and 2020. This, in turn, led to an increase in GDP per capita in purchasing power parity relative to the EU average \u2013 from 61% in 2013 to 73% in 2022. However, Croatia started from a higher level than\u00a0many other countries in the region: when it joined the EU, it already had a higher GDP per capita (around \u20ac10,500) than the EU member states from the region (including Hungary, Poland, Romania and Bulgaria); in 2022, it stood at \u20ac14,500, slightly lower than Poland\u2019s. The country grew more slowly than neighbouring Hungary and Poland, but at a comparable rate to non-EU Serbia<\/span><\/a>[5]<\/sup><\/a>\u00a0(see Chart 1). The most visible success in this period was the decrease in the number of the unemployed. In 2013, the unemployment rate was 17.25%, before falling to only 6.75% in 2022 (one of the best results in the history of independent Croatia; see Chart 2). However, the 10-point decrease over that decade is not only attributable to the good economic situation, but also to negative demographic trends and the emigration of the workforce.<\/span><\/p>\r\n\"\"\r\n

Chart 2. Unemployment rate in Croatia in 2008\u20132022<\/span><\/p>\r\n

Source: author\u2019s own compilation based on data from Statista.<\/span><\/p>\r\n

\"\"<\/p>\r\n

Map 1. The share of tourism in the GDP of EU countries in 2019<\/span><\/p>\r\n

Source: author\u2019s own compilation based on data from Landgeist, landgeist.com.<\/span><\/p>\r\n

The service sector has been the backbone of the Croatian economy for a decade: its share of the country\u2019s GDP is as high as 74%. Industry (including construction) accounts for 23% of GDP, and agriculture makes up 3%. The main problem is the country\u2019s continued dependence on tourism, which generates 25% of its GDP (see Map 1).<\/span><\/a>[6]<\/sup><\/a>\u00a0This makes it extremely vulnerable to external shocks. As an example, Croatia\u2019s GDP fell by 8.5% in 2020 during the COVID-19 pandemic. This is the Croatian variant of the so-called \u2018Dutch disease\u2019 \u2013 an economy\u2019s heavy dependence on one fast-growing industry. The dependence of Croatia\u2019s GDP on this sector is much higher than in the case of European tourism giants such as Spain and Italy. Moreover, this exacerbates the disparities in development, unemployment rates and living standards between the country\u2019s coastal and mainland parts, which the redistribution of budgetary resources has only marginally reduced. Such a heavy emphasis on the development of tourism also contributes to the neglect of the other sectors of the economy and to the deepening deindustrialisation of the country, which has led to a negative foreign trade balance (-\u20ac11 billion in 2021).<\/span><\/p>\r\n\"\"\r\n

Map 2. GDP per capita of Croatia\u2019s individual regions in 2020<\/span><\/p>\r\n

Source: Croatian Bureau of Statistics, dzs.gov.hr.<\/span><\/p>\r\n\r\n

Problems in the labour market and regional differences<\/strong><\/span><\/p>\r\n

According to the Ministry of Tourism and Sport, the shortage of qualified staff is becoming the most important problem in this industry.<\/span><\/a>[7]<\/sup><\/a>\u00a0This is mainly due to mass emigration and low birth rates. According to the latest census from 2021, Croatia has 3.9 million citizens, 10% less than in 2011.<\/span><\/a>[8]<\/sup><\/a>\u00a0Demographic trends look even worse than during the war-torn 1990s, when 7% of the population left the country. The possibility of working legally in countries with higher standards of living (mainly Germany, Austria and Ireland) is one of the primary reasons for the mass exodus to the EU, in addition to excessive state bureaucracy, a weak and inefficient judiciary, corruption and the incompetence of the political elite.<\/span><\/a>[9]<\/sup><\/a><\/span><\/p>\r\n\"\"\r\n

Map 3. Population change in Croatia based on the 2011 and 2021 censuses<\/span><\/p>\r\n

Source: Croatian Bureau of Statistics, dzs.gov.hr.<\/span><\/p>\r\n

Data published by the Croatian Bureau of Statistics shows that the process of depopulation is not evenly spread. It has mainly affected\u00a0Slavonia, the flatland part of Croatia located far from the sea (one in five of its inhabitants has left), and to a lesser extent the more affluent parts along the Adriatic and Zagreb (see Maps 2 and 3). Even in the coastal\u00a0\u017eupanias<\/em>\u00a0(counties), development is concentrated on the coast, while the interior remains largely neglected; this is another factor that encourages emigration.<\/span><\/p>\r\n

Investments: eye-catching or efficient?<\/strong><\/span><\/p>\r\n

The low absorption of EU funds is one of Croatia\u2019s main problems and barriers that prevent it from taking full advantage of its EU membership. From 2013 to 2022, the country was supposed to receive up to \u20ac10.7 billion from European structural and investment funds, but failed to make use of as much as 46% of the approved money.<\/span><\/a>[10]<\/sup><\/a>\u00a0<\/sup>According to a report by the European Court of Auditors, Croatia was the country that absorbed the least resources from ESI funds for 2014\u20132022.<\/span><\/a>[11]<\/sup><\/a>\u00a0The reasons for this financial mismanagement include the inefficient state administration, inadequate cooperation between the public and private sectors, corruption, and irregularities related to public procurement. Croatia began to perform slightly better after 2019, when Gabrijela \u017dalac, who was accused of involvement in corruption scandals, stepped down as minister of regional development and European funds.<\/span><\/a>[12]<\/sup><\/a>\u00a0Over the past two years, the country has achieved significant progress in the use of EU funds: it now absorbs up to 72% of those allocated.<\/span><\/a>[13]<\/sup><\/a><\/span><\/p>\r\n

Croatia\u2019s EU-funded investment successes include the region\u2019s flagship energy diversification project and LNG infrastructure. Following Russia\u2019s aggression against Ukraine, a floating terminal on the island of Krk has proven to be one of the most important projects for securing an alternative to Russian gas supplies to the region. The plan to build the facility in Omi\u0161alj on Krk was conceived long before Croatia joined the EU, but it took pressure from Brussels and Washington to ensure it was constructed. <\/span><\/p>\r\n\"\"\r\n

Russian influence in the country and the difficulties of implementing such a major project in an uncertain economic climate were the main reasons why it was delayed by nearly a decade. The government was also reluctant to foot the bill for the project since it could obtain gas from the existing source (until 2021, most of the imported gas indeed came from Russia). Construction began in 2019 and cost a total of \u20ac234 million, including more than 43% from the EU\u2019s Connecting Europe Facility. The floating LNG terminal finally became operational in January 2021. In its current form, its regasification capacity is 2.9 bcm per year, but talks are underway to increase it to 6.1 bcm by 2025, which would significantly enhance Croatia\u2019s role as the region\u2019s energy hub. The terminal\u2019s expansion is important not only in the context of shifting away from Russian crude \u2013 the government also wants to use this facility to pursue its interests in Bosnia and Herzegovina. The Southern Gas Interconnection project envisages the creation of the first gas pipeline link between the two countries with a capacity of 1.5 bcm. This presents Sarajevo with an opportunity to reduce its dependence on Russian gas while Croatia gains an important instrument with which to influence its neighbour.<\/span><\/p>\r\n\"\"\r\n

The construction of the 2.4 km long bridge to the Pelje\u0161ac Peninsula is a much more debatable venture in terms of its economic benefits. This was co-funded by the EU and put into operation in July 2022 (see Map 4). It connects the enclave around Dubrovnik (this is separated by a strip of Bosnian coastline) with the rest of the country. The bridge is the largest Croatian infrastructure project to which the EU has contributed: its total construction cost was \u20ac526 million, \u20ac357 million of which was provided by the EU. The government in Sarajevo sharply criticised the first plans to erect the bridge when they were announced in 2005, claiming that it would cut off Bosnia\u2019s only coastal town, Neum, from the open sea.<\/span><\/a>[14]<\/sup><\/a>\u00a0The location of the bridge was changed, but the implementation of the project was put on hold due to the economic crisis; in 2012, the social democratic government of Prime Minister Zoran Milanovi\u0107 (who is the current president of Croatia) decided to scrap it altogether.\u00a0It was not until Croatia became a member of the EU that the investment,\u00a0which has been dubbed a \u2018generational project\u2019, was given a new lease of life. The bridge is an example of a development that is both extremely costly and symbolically important, as it provides a direct link between two previously separated parts of the country. At the same time, it does little to address the most pressing needs of Croatia\u2019s infrastructure network and makes a negligible contribution to the country\u2019s economic development. While it certainly allows for faster access to Dubrovnik, this city of just over 40,000 inhabitants is more a tourist attraction than a centre of industry and innovation. In practice, therefore, the project further deepens the country\u2019s dependence on tourism. The rationale for the construction of this link has also been undermined by the actions taken by local politicians who have been seeking to restrict tourist traffic to the \u2018pearl of the Adriatic\u2019.<\/span><\/p>\r\n\"\"\r\n

Map 4. Major EU investments: the LNG terminal and the Pelje\u0161ac bridge<\/span><\/p>\r\n

Source: author\u2019s own compilation.<\/span><\/p>\r\n\r\n

Top performer in EU integration<\/strong><\/span><\/p>\r\n

Croatia\u2019s entry into the Eurozone and the Schengen area was an undeniable success for the EU\u2019s youngest member state. The adoption of the European currency was a priority for the current Prime Minister Andrej Plenkovi\u0107 and the governor of Croatia\u2019s central bank, Boris Vuj\u010di\u0107, who lauded its benefits to the public.\u00a0This milestone event took place\u00a0on 1 January 2023. <\/span><\/p>\r\n\"\"\r\n

The transition from the kuna to the euro was relatively smooth as Croats had already been using the single currency (and previously the German mark) in their day-to-day lives, and had kept their savings and taken out loans in it even before their country officially joined the monetary union. About two-thirds of the country\u2019s public debt was denominated in euros.<\/span><\/a>[15]<\/sup><\/a>\u00a0In 2021, EU countries, mainly from the Eurozone, such as Germany, Italy and Slovenia, accounted for more than 70% of Croatia\u2019s trade. By adopting the single currency, the country has gained greater price stability and reduced the exchange rate risk in trade transactions. Another positive consequence of this step is the rising value of foreign investments, which have been flowing in mainly from EU member states: Austria, the Netherlands, Germany, Italy and Luxembourg. The most important branch of the economy has also benefited, as more than half of all tourists come from Eurozone countries. The government in Zagreb hopes that Croatia\u2019s accession to the Eurozone will raise its political standing in the community, thus bringing it into the mainstream of integration.<\/span><\/p>\r\n

To Sarajevo via Berlin<\/strong><\/span><\/p>\r\n

After the overarching foreign policy goals from the beginning of this century were achieved with the accession to NATO (2009) and the EU (2013), over the last decade Bosnia and Herzegovina has become one of the most important fields of activity for Croatian diplomacy, which has focused on defending the interests of the Croats who live there. All the governments in Zagreb to date have emphasised the importance of this issue. The Croats, who live mainly in the southwestern part of Bosnia and Herzegovina, do not have their own entity within this federal state.<\/span><\/a>[16]<\/sup><\/a>\u00a0Croatian governments have claimed that this means they are not treated on equal terms with the other peoples of Bosnia and Herzegovina (however, they make up only 15% of its population).<\/span><\/a>[17]<\/sup><\/a>\u00a0Accession to the European Union in 2013 gave Croatia the opportunity to play a greater role in the Western Balkans, with special emphasis on Bosnia and Herzegovina. The strength of Croatian political influence can be seen in the fact that the Bosnian Croats have long been represented by the Croatian Democratic Community of Bosnia and Herzegovina (HDZ BiH), an affiliate of the HDZ, which has been in power in Croatia for years.<\/span><\/p>\r\n

Croatia has been building its status in the EU primarily on the basis of its close relations with Germany, which explicitly supported its statehood on the eve of Yugoslavia\u2019s break-up. The HDZ\u2019s relations with Germany\u2019s Christian Democrats and cooperation with them in the European People\u2019s Party are of particular importance in this regard. One of the Christian Democrats in the European Parliament is the current High Representative for Bosnia and Herzegovina, Christian Schmidt (he has held this position since 1 August 2021). He was previously the German federal minister for food and agriculture and has had close ties with the government in Zagreb for years.<\/span><\/a>[18]<\/sup><\/a>\u00a0Schmidt\u2019s acceptance of the Order of Ante Star\u010devi\u0107 (a high state award) from Croatia\u2019s prime minister in 2020 caused significant controversy on the Bosnian political scene. The outrage of the Bosnian leaders was compounded by the fact that this order had previously been awarded to convicted war criminals. The High Representative, who has extensive powers in Bosnia and Herzegovina, has also triggered disputes by introducing a number of changes in favour of the Croats.<\/span><\/a>[19]<\/sup><\/a>\u00a0In the view of the government in Zagreb, Schmidt\u2019s actions have been appropriate and placed the Bosnian Croats on a more equal political footing. At the same time, his steps have strengthened the\u00a0centrifugal forces\u00a0in Bosnia and Herzegovina, and have contributed to the current institutional crisis that poses a challenge for Croatia regarding the stability of its neighbour.<\/span><\/p>\r\n

Assessment and outlook: cohesion above all<\/strong><\/span><\/p>\r\n

The first decade of Croatia\u2019s membership in the EU has been a time of moderate but noticeable economic development. For internal reasons, such as corruption, institutional weakness and the overreliance on one sector of the economy, Croatia has failed to meet the full potential of its accession. The free movement of people within the EU has become the cause of one of Croatia\u2019s biggest problems: emigration and the gradual decrease in its population. Although there is a visible convergence in the level of development between Croatia and the \u2018old\u2019 EU member states, disparities have been growing within Croatia itself: between the more prosperous coast and the capital city on the one hand and the inland (mainly northeastern) part of the country on the other. Negative demographic trends have also been generating challenges for tourism, as until now, the residents of the interior (mainly Slavonia) have been catering to the throngs of visitors from other countries during the summer seasons. In 2022, a record 18.9 million tourists arrived in Croatia \u2013 five times the country\u2019s entire population.<\/span><\/p>\r\n

EU membership increases Croatia\u2019s chances of becoming a regional energy hub. EU support has made it possible to build the floating LNG terminal, whose importance has increased especially in the context of the war in Ukraine and the shift away from Russian resources. In addition, EU funds will underpin the plans to increase its current import capacity and building a new gas pipeline with Slovenia. Gas from the Croatian terminal will help diversify supplies to Austria, Bosnia and Herzegovina, Germany, Slovenia and Hungary, thus strengthening Croatia\u2019s position in the region. Croatia has also been raising its profile in Europe by participating in various formats of regional cooperation, although this involvement has thus far been inconsistent. The Three Seas Initiative was launched in 2015 on the initiative of the presidents of Poland and Croatia, but the latter\u2019s activity in this project was significantly reduced when Zoran Milanovi\u0107 replaced Kolinda Grabar-Kitarovi\u0107 as president. The current president views this initiative with scepticism out of fear that Croatia\u2019s membership in it could lead to a serious deterioration in its relations with Germany.<\/span><\/p>\r\n

Croatia has successfully used its membership in the EU to pursue its own foreign policy objectives: the government has managed to put the issue of the Croats who live in Bosnia and Herzegovina on the agenda of the European debate. For Croatia, EU integration also offers advantages from the perspective of the enlargement process to include the Western Balkan countries. Indeed, three countries located in the immediate vicinity of Croatia have been seeking to join the EU community: Bosnia and Herzegovina, Montenegro and Serbia. The dispute with Slovenia has shown that the negotiating position of a country that is already in the EU is much stronger. This issue could prove crucial as Croatia still has to deal with unresolved border disputes, settlements relating to the wars of the 1990s and the struggles over the status of the Croatian minority in these countries. Nevertheless, any attempts to force concessions by threatening to block their accession process could undermine Croatia\u2019s status in the region once these countries join the EU.<\/span><\/p>\r\n\r\n

<\/a>[1]<\/span><\/sup><\/a>\u00a0<\/sup>The survey was carried out by the Mediana agency.\u00a0See D. Butkovi\u0107,\u00a0\u2018<\/span><\/sup>Samo 23% Hrvata za ulazak u EU! \u010cak 95% smatra presudu nepravednom<\/sup><\/a><\/span>\u2019<\/span>, Jutarnji, 16 April 2011, jutarnji.hr.<\/sup><\/span><\/p>\r\n

<\/a>[2]<\/sup><\/a>\u00a0\u2018<\/sup>Standard Eurobarometer 80 \u2013 Autumn 2013<\/sup><\/a><\/span>\u2019<\/span>, The European Commission, December 2013, europa.eu.<\/sup><\/span><\/p>\r\n

<\/a>[3]<\/sup><\/a>\u00a0\u2018<\/sup>Standard Eurobarometer 98 \u2013 Winter 2022\u20132023<\/sup><\/a><\/span>\u2019<\/span>, The European Commission, February 2023, europa.eu.<\/sup><\/span><\/p>\r\n

<\/a>[4]<\/sup><\/a>\u00a0\u2018<\/sup><\/span>Corruption Perceptions Index \u2013 Croatia<\/span><\/sup><\/a>, Transparency International, transparency.org.<\/sup><\/span><\/p>\r\n

<\/a>[5]<\/span><\/sup><\/a>\u00a0See<\/sup>\u00a0\u2018<\/span><\/sup>Real GDP per capita<\/sup><\/a><\/span>\u2019<\/span>, ec.europa.eu\/eurostat.<\/sup><\/span><\/p>\r\n

<\/a>[6]<\/sup><\/a>\u00a0<\/sup><\/span>Data from:\u00a0\u2018<\/span><\/sup>Share of travel and tourism\u2019s total contribution to GDP in European Union member countries (EU 27) and the United Kingdom (UK) in 2019 and 2022<\/sup><\/a><\/span>\u2019<\/span>, Statista, 2023, statista.com.<\/sup><\/span><\/p>\r\n

<\/a>[7]<\/sup><\/a>\u00a0\u2018<\/sup>Turizam je vi\u0161e od aktivnosti u\u00a0slobodno vrijeme i\u00a0zahtijeva stru\u010dnu i\u00a0kvalificiranu radnu snagu<\/sup><\/a><\/span>\u2019, The Ministry of Tourism and Sport of Croatia, 29 May 2023,\u00a0<\/em>mint.gov.hr.<\/sup><\/span><\/p>\r\n

<\/a>[8]<\/sup><\/a>\u00a0\u2018<\/sup>Popis 2021<\/sup><\/a><\/span>\u2019<\/span>,\u00a0Croatian Bureau of Statistics, dzs.gov.hr.<\/sup><\/span><\/p>\r\n

<\/a>[9]<\/sup><\/a><\/span>\u00a0<\/sup>Z.\u00a0Gali\u0107,\u00a0\u2018<\/span><\/sup>Iseljavanje visokoobrazovanih: prihodi, ali i\u00a0korupcija, op\u0107i osje\u0107aj netrpeljivosti u\u00a0dru\u0161tvu\u2026<\/sup><\/a><\/span>\u2019<\/span>, Ideje.hr, 14 November 2019, ideje.hr.<\/sup><\/span><\/p>\r\n

<\/a>[10]<\/sup><\/a>\u00a0<\/sup><\/span>Izvje\u0161\u0107e o\u00a0kori\u0161tenju Europskih i\u00a0strukturnih fondova<\/span><\/sup><\/em><\/a>, The Croatian Parliament, April 2021, per: strukturnifondovi.hr.<\/sup><\/span><\/p>\r\n

<\/a>[11]<\/sup><\/a>\u00a0<\/sup><\/span>Introducing the 2021 annual reports of the European Court of Auditors<\/span><\/sup><\/em><\/a>, ETO, eca.europa.eu.<\/sup><\/span><\/p>\r\n

<\/a>[12]<\/span><\/sup><\/a>\u00a0<\/sup>The European Public Prosecutor’s Office (EPPO) accused the former minister of defrauding the national and EU budgets by purchasing software at an inflated price.\u00a0See\u00a0\u2018<\/span><\/sup>Four arrested for suspected fraud at Croatian Ministry of Regional Development and EU Funds<\/sup><\/a><\/span>\u2019<\/span>, 10 November 2021, eppo.europa.eu.<\/sup><\/span><\/p>\r\n

<\/a>[13]<\/sup><\/a>\u00a0\u2018<\/sup>Hrvatska ubrzala iskori\u0161tenost sredstava kohezijskih fondova Europske unije, iza Hrvatske 12 dr\u017eava Europske unije<\/sup><\/a><\/span>\u2019<\/span>,<\/sup>\r\n<\/sup>The Ministry for Regional Development and EU Funds, 3 November 2022, razvoj.gov.hr.<\/sup><\/span><\/p>\r\n

<\/a>[14]<\/sup><\/a>\u00a0<\/sup><\/span>Under the 1699 Treaty of Karlowitz, the Republic of Dubrovnik ceded a slice of the Adriatic coast including Neum to the Ottoman Empire to separate itself from the Republic of Venice. The area later became part of Bosnia and Herzegovina.<\/sup><\/span><\/p>\r\n

<\/a>[15]<\/sup><\/a>\u00a0<\/sup><\/span>Program konvergencije Republike Hrvatske za razdoblje 2023.\u00a0\u2013 2025<\/span><\/sup><\/em><\/a>, The Ministry of Finance of Croatia, April 2022, per: commission.europa.eu.<\/sup><\/span><\/p>\r\n

<\/a>[16]<\/sup><\/a>\u00a0<\/sup><\/span>Bosnia and Herzegovina is a federal state that consists of two entities: Republika Srpska and the Federation of Bosnia and Herzegovina. The latter is mainly populated by Croats and Muslims.<\/sup><\/span><\/p>\r\n

<\/a>[17]<\/sup><\/a>\u00a0<\/sup><\/span>Bosnia and Herzegovina’s last population census took place in 2013, so the country’s current ethnic composition may differ significantly from the one presented in this paper.<\/sup><\/span><\/p>\r\n

<\/a>[18]<\/sup><\/a><\/span>\u00a0<\/sup>The office was established under the Dayton Agreement. The High Representative for Bosnia and Herzegovina has extensive legislative authority and the power to remove politicians from their positions in both of the constituent parts of the country.<\/sup><\/span><\/p>\r\n

<\/a>[19]<\/sup><\/a>\u00a0<\/sup><\/span>For example, Schmidt used his prerogatives on election night in October 2022, when he pushed through an amendment regarding the composition of the upper house of parliament of the Federation of Bosnia and Herzegovina. The change gave a privileged position in this entity to politicians from HDZ BiH, the main party of the Bosnian Croats.<\/sup><\/span><\/p>\r\n\r\n

USEFULL LINKS<\/span><\/p>\r\nCroation\u2019s EU Profile<\/span>\r\nhttps:\/\/european-union.europa.eu\/principles-countries-history\/country-profiles\/croatia_en<\/span><\/a><\/span>\r\n\r\nCroatia joins the Schengen and Eurozone<\/span>\r\nhttps:\/\/www.orfonline.org\/expert-speak\/croatia-joins-the-schengen-and-eurozone<\/span><\/a>\r\n\r\nResolution on the Accession of the Republic of Croatia to the European Union (18 December 2002)<\/span>\r\nhttps:\/\/www.sabor.hr\/en\/european-union\/resolution-accession-republic-croatia-european-union-18-december-2002<\/span><\/a>\r\n\r\nStatement by the Croatian Parliament and the Government of the Republic of Croatia on Joint Actions in the Process of Negotiations on Membership of the European Union (19 January 2005)<\/span>\r\nhttps:\/\/www.sabor.hr\/en\/european-union\/statement-croatian-parliament-and-government-republic-croatia-joint-actions-process<\/span><\/a>\r\nCroatia’s Preparation for EU Accession<\/span>\r\nhttps:\/\/www.econstor.eu\/bitstream\/10419\/226070\/1\/wiiw-bo-wp-032.pdf<\/span><\/a><\/span>\r\n

Commission Communication to the Council and European Parliament on the Stabilization and Association Process for countries of South-Eastern Europe. COM(99) 235. Brussels, 26.05.99.<\/span><\/p>\r\n

https:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/HTML\/?uri=LEGISSUM:r18003<\/a><\/span><\/p>\r\n

CARDS programme – preliminary assessment and perspectives of introducing elements of pre-accession strategy for Croatia. Institute for International Relations. Zagreb, May 2003.<\/span><\/p>\r\n

https:\/\/neighbourhood-enlargement.ec.europa.eu\/system\/files\/2018-12\/croatia_strategy_paper_en.pdf<\/a><\/span><\/p>\r\n

Communication from the Commission \u2013 Opinion on Croatia’s Application for Membership of the EU (2004)<\/span><\/p>\r\n

https:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/HTML\/?uri=CELEX%3A52004DC0257<\/a><\/span><\/p>\r\n

Commission Staff Working Paper. Croatia. Stabilization and Association Report 2003. COM(2003)139 final.<\/span><\/p>\r\n

https:\/\/eur-lex.europa.eu\/LexUriServ\/LexUriServ.do?uri=COM:2003:0139:FIN:EN:PDF<\/a><\/span><\/p>\r\n

Croatian Competitiveness Challenge. Annual Report on Croatian Competitiveness 2002. National Competitiveness Council, June 2003.<\/span><\/p>\r\n

https:\/\/wbc-rti.info\/object\/document\/7280\/attach\/0781_GIK_2004_ENG.pdf<\/a><\/span><\/p>\r\n

https:\/\/www.oecd.org\/countries\/croatia\/35313317.pdf<\/a><\/span><\/p>\r\n

European Bank for Reconstruction and Development EBRD, (2003). Transition Report 2003. Integration and regional cooperation. London European Commission. DG ECFIN, (2003).<\/span><\/p>\r\n

https:\/\/www.ebrd.com\/downloads\/research\/transition\/TR03.pdf<\/a><\/span><\/p>\r\n

Proposal for a Council Decision Concerning the Signature of the Stabilization and Association Agreement between the European Communities and its Member States and Republic of Croatia on behalf of the European Community. COM(2001) 371 final. Brussels, 09.07. 2001.<\/span><\/p>\r\n

https:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/PDF\/?uri=CELEX:52001PC0371(01)<\/a><\/span><\/p>\r\n

World Bank. Croatia: Country Economic Memorandum. A Strategy for Growth through European Integration. July 2003.<\/span><\/p>\r\n

https:\/\/documents1.worldbank.org\/curated\/en\/172021468770685773\/text\/254341HR0vol01.txt<\/a><\/span><\/p>\r\n

“The Thessaloniki agenda for the Western Balkans: Moving Towards European Integration”<\/span><\/p>\r\n

https:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/HTML\/?uri=CELEX%3A52003PC0684<\/a><\/span><\/p>\r\n\r\n\r\n \r\n\r\n\r\n