ZAGREB, April 16, 2019 - Compared with the 2000-2001 school year, the number of children enrolled in Osijek-Baranja County elementary schools in 2019 is down by 10,000, heard a round-table debate held on Monday at the Faculty of Agriculture in the eastern Croatian town of Osijek where the national campaign aimed at stopping brain drain was presented.

The round debate was organised by the Večernji List and Poslovni Dnevnik dailies.

The event was also attended by Osijek-Baranja County Deputy Prefect Petar Lagator who voiced his concern over the departure of young people. He said that economic indicators in the county over the past year were somewhat better, adding that monthly salaries recorded an increase and the number of jobless was reduced, but that the demographic picture was nevertheless worrying.

The proof of that is that a total of 23,000 children were enrolled in Osijek-Baranja County elementary schools in the 2000-2001 school year, while this year there were slightly over 13,000 enrolled pupils.

He also presented figures released by the Employment Service according to which there are 105,000 people economically active in the county last year, of whom 87,500 were employed and 17,500 were seeking employment.

"This year, the number of the unemployed was reduced by 4,000, while the number of the employed increased by 2,500, which means that approximately 1,500 people have disappeared somewhere. It is hard to say whether they moved abroad or have resolved their status in another way," the deputy prefect said.

More news about Croatia’s demographic crisis can be found in the Politics section.

Comments of Croatians who have left Croatia and bleak forecasts about further mass emigration of people from Croatia should be a reason for alarm. Most people who have left Croatia do not want to return. Since independence, not much has been done to keep young people in the country. Asked about the reasons, most give a similar answer: “If you are young and live in Croatia, you have a big problem”, reports Slobodna Dalmacija on March 30, 2019.

Taking into account people who are likely to leave Croatia by 2026, the total number of emigrants could reach 800,000 people, with 300,000 already gone. In the next seven years, Croatia could lose virtually everybody who could emigrate, and then the emigration will stop.

These alarming figures have been published by Tado Jurić, who presented his book about the emigration of Croatians to Germany, which includes the results of the first scientific research on the causes and consequences of the recent emigration wave of Croats moving to Germany.

The survey was conducted in Germany among Croatian emigrants who left Croatia after it became EU member in 2013, on a sample of 1200 respondents. “The book represents the voice of the emigrants who have left Croatia in the last five years, and that is their message to the Croatian government. People living in Germany filled out a whole series of questionnaires, starting with how satisfied they are with life in Germany, why they would not return to Croatia, why they left,” said Jurić.

“No EU member state has ever witnessed an increase in emigration by 1000%, from 5,000 to 50,000 citizens annually, in just four years. Young people aged between 20 and 40 are leaving with their families because they have lost hope and security. Unfortunately, nothing suggests that there is a serious impulse in the society that things could change,” Jurić said and added that Prime Minister Andrej Plenković claims that people are returning to Croatia and that is true. About 15,000 people are returning every year, but these are old emigrants who are retiring, not the young people who have left, Jurić pointed out.

According to the perception of emigrants who have participated in the research, the main motives for emigration are not economic. The analysis of the positions of Croats in Germany has shown that Croatian emigrants believe that the values of work ethic and honesty have not been institutionalised in Croatia and they think that Croatian society has been morally broken.

The main factors leading to emigration are classified into several categories. “The main category is the weakness of the institutions and the immorality of the political elites, so we can say that Croats are emigrating due to injustice, not poverty. On the one hand, we do not reward the correct behaviour, and on the other hand, we do not punish incorrect behaviour. Judiciary is a major issue that our emigrants point out,” Jurić said.

Immoral political elites, legal insecurity, nepotism and corruption are certainly among the leading causes of emigration. If a job position is opened, they are mostly filled with people with the right connections or those who have the correct membership card. Such are the most often heard comments from the emigrants.

Most emigrants are people between the ages of 25 and 40, and they made up 58% of the respondents. Slightly less than 10 per cent of the respondents did not look for work before emigrating, about 39 per cent were unemployed and were actively looking for a job, while 55 per cent were employed.

About 25 per cent of respondents have an entirely negative attitude towards Croatia, and 70 per cent are satisfied with their jobs and lives in Germany. About 51% of them plan to stay in Germany, about 15% could return to Croatia, while the rest could move from Germany to another country. Although Ireland is often mentioned in the media, Germany is still the country where most emigrants move to.

Translated from Slobodna Dalmacija (reported by Jakov Žarko).

More news about mass emigration from Croatia can be found in the Politics section.

ZAGREB, March 3, 2019 - Law professor Ivan Koprić, who has recently presented findings of a study about the capacities of Croatian municipalities and towns to accept migrants, has said that less than 5% of units of local self-government have immigrants who have arrived since 2015 in Croatia.

Commenting on the findings at a round table discussion on challenges of migrations organised by the Croatian Academy of Sciences and Arts (HAZU), Koprić, who is a professor at Zagreb Law School, said that the study, conducted by the Institute of Public Administration, involved 62 mayors of municipalities and towns with more than 10,000 residents.

"Less than 5% of those communities have immigrants who have arrived since 2015, while 90% communities had experiences with refugees and displaced people in the 1990s," he said.

Those local communities are willing to take in immigrant Croats from abroad, and then immigrants from western Europe, Scandinavia, Canada, the USA and Croatia's neighbouring countries.

As many as 77% of respondents reject the claim about unacceptable multiculturality, and 66% reject a claim about immigration not being welcome.

However, 68% of respondents believe that an influx of immigrants may cause social problems, and 60% say that the capacity of local institutions and utilities such as pre-school institutions, schools, healthcare centres are insufficient for the integration of migrants, and 70% of them will like to transfer this job to nongovernmental organisations, according to Koprić's presentation.

The professor says that the mayors covered by the poll have a realistic insight in the risks and potential advantages of immigration.

More news on the migration crisis can be found in the Politics section.

In mid-2018, Croatia had just 4.089 million inhabitants, according to the latest estimate by the Central Bureau of Statistics (DZS) published yesterday. According to the most recent census in 2011, the population of Croatia was 4.284 million, so Croatia has never had fewer inhabitants since gaining independence. Unofficial estimates of demographers show that the real number is actually below four million since many of the people who have moved abroad have not registered their new status with the authorities. The DZS estimates the number of inhabitants based on the number of births, deaths, immigrants and officially-registered emigrants, reports Večernji List on February 23, 2019.

The even worse news is the poor age structure. According to the estimate, there are only 590,600 children under the age of 14, while the number of people older than 65 is 833,300. This means that in just seven years the number of children younger than 14 years has been reduced by almost 60,000, while the number of older people has increased by 74,000.

“In my opinion, we have fewer than four million inhabitants, since a large number of emigrants did not register with the authorities. However, even worse is the poor age structure. This brings serious economic and social problems and consequences for the pension and health system. Based on the share of young people, we can expect many schools to close down, which is already taking place, particularly in rural settlements,” says demographer Anđelko Akrap, head of the Department of Demography at the Zagreb School of Economics.

Demographer Stjepan Šterc agrees with Akrap that Croatia has fewer than four million inhabitants. “These estimates on the number of residents in mid-2018 are quite optimistic. The latest data show that we are actually below four million people. The most accurate data is the number of children in elementary and secondary schools since schools annually provide official data on the number of pupils, so we can see that we have lost about 83,000 primary and secondary students in ten years. Approximately 65,000 children attending primary and secondary school have emigrated in the past ten years. When you add a natural decline of 150,000 people, in ten years we have had a population loss of more than 400,000 people,” says Šterc.

Demographer Marin Strmota shares the same opinion. “Unfortunately, these projections have been expected. The age structure is probably even worse due to the migration of people between 25 and 45 years of age, which is an additional burden for the country. Negative trends are continuing, so a few hundred more births last year can hardly mean anything,” says Strmota.

The DZS estimates show another absurdity: it is impossible for Croatia to have 4.089 million inhabitants and at the same time 3,774,548 registered voters, according to the voters’ registry run by the Ministry of Administration. Such a figure would only be possible if young children were allowed to vote.

Interestingly, according to the data from the Croatian Health Insurance Institute, there are 4,146,450 people with health insurance, which is again incompatible with everybody else’s numbers.

More demography news can be found in the Politics section.

Translated from Večernji List (reported by Dijana Jurasić).

ZAGREB, February 10, 2019 - The Assistant Minister of Demography, Family, Youth and Social Policy, Ivica Bošnjak, said on Saturday that one of the measures of the Strategy for Democratic Revitalisation was to increase the amount of the parental allowance for the second half of maternity leave, but did not confirm that it would be in the full amount of parents' monthly wages.

Speaking to the press after the Jutarnji List daily of Saturday wrote that the Strategy for Democratic Revitalisation, which is under preparation, envisaged a higher parental allowance and that it would be paid in the full amount for the other six months as well, Bošnjak said that the Strategy would be finalised in April and that it was likely be put to public consultation in May or June.

"We are dedicated to improving the conditions, we are going in that direction," he said when asked by a reporter if the parental allowance would be paid in the full amount of the parents' wages for all 12 months. Currently it is paid in full only for the first six months of maternity leave.

Bošnjak dismissed the speculation that this measure was planned for next year because it was an election year, recalling that parental allowances had been increased by 50 percent in mid-2017 after a full nine years and children's allowances after a full eleven years.

He noted that the new Strategy was being drawn up after 13 years and that considerable investments had been made in kindergartens this year and last for the first time in 18 years. "Never before has central government made such investments. This is considerable progress and this measure is just one in a set of measures that will help improve the family environment."

Bošnjak said that Croatia would implement the EU directive that requires the introduction of paid paternity leave of 10 days after the birth of a child. He added that it was yet to be seen whether the implementation would start next year or after 2020 and whether such leave would be paid by the employer or the government.

More news on the demographic policies can be found in the Politics section.

ZAGREB, February 9, 2019 - Prime Minister Andrej Plenković said in Šibenik on Friday there was no strategic goal the government had not fulfilled, yet that there remained a lot to do and that Croatian demographic revival was one of the main tasks.

"There is no strategic goal we haven't fulfilled. We are in the club of the most developed world countries as a member of the EU, but we still have a lot to take care of. We are faced with population ageing. In Croatia, more people die than are born annually... and our fundamental task is to try to... change those trends, and we are working on that," Plenković said at a ceremony marking the 29th anniversary of his HDZ party's Šibenik county and city branches.

He said the population policy had started showing signs of success and that last year nearly 900 more children were born than in 2017.

He said the present generation was privileged because it lived in an independent and internationally recognised Croatia. "The recognition was not easy and didn't happen overnight," he said, highlighting Croatia's accession to NATO and the European Union.

The prime minister said the economy was growing and that it was important for growth not to be based on new borrowing. "We have relieved businesses by reducing administrative barriers. Counties now have more money and the merging of state administration offices will give them also greater powers," he said, adding that the government wanted "all parts of Croatia to develop."

Plenković said the government would continue to reform the justice and pension systems and provide for higher pensions. "We are also working on making Croatia attractive for investment."

He said the HDZ would run "in the next European elections to present a successful Croatia in Europe," voicing confidence that the party would "triumph in the May 26 elections."

More news on the demographic issues in Croatia can be found in the Politics section.

43,219 foreigners moved to Croatia in 2018 and were granted temporary residence, which is almost three times more than in 2016. About 31,000 immigrants came from the countries of the former Yugoslavia, mainly Bosnia and Herzegovina, Serbia, Macedonia and Kosovo, which is to be expected because it is difficult to imagine that immigrants from more developed countries would decide to move to Croatia, reports Večernji List on February 4, 2019.

Croatia mostly attracts less educated people. Of the 43,219 foreigners who were granted temporary residence last year, just 2,064 had a university degree. The majority of immigrants had a high school diploma, while for almost 9,000 the education level was unknown. About 2,690 had managed to graduate just from an elementary school. These numbers come from the Interior Ministry’s data.

As far as temporary immigrants are concerned, 28,000 of them are under the age of 39. The figures do not include asylum seekers accepted by Croatia because they are covered by separate legislation.

The demographer Stjepan Šterc says that the number of foreigners who have been granted temporary residence in Croatia is not an indication of the number of refugees who came here. “The largest number of immigrants are seasonal workers, who came here due to the needs of the labour market and the economy, which is also evident by the fact that most of them are under the age of 40. Agriculture, tourism and construction that the main sector in Croatia which are looking for less educated workers. It is clear that most immigrants to Croatia are less educated, while those with university diplomas mostly come to work in foreign-owned companies. It is also to be expected that most workers would come from neighbouring countries,” says Šterc.

The majority of people who have been granted temporary residence have the citizenship of Bosnia and Herzegovina (19,560), which means that Croats from Bosnia are not included in this number because they have Croatian citizenship. The second place belongs to the citizens of Serbia (6,354). The number of EU immigrants who were last year granted temporary residence in Croatia is negligible, but most of them came from Slovenia, Germany, Italy, Poland, Britain, France, Austria, Spain, Hungary and the Czech Republic. When it comes to foreigners from non-European countries, the highest number of temporary residence permits was granted to people coming from China (574), USA (497), Russia (413), India (220), followed by the Philippines (156), Mexico (143), Korea (135), Thailand (132), Brazil (126).

Permanent residency was last year granted to 1,448 foreigners, mostly from Germany, Bosnia and Herzegovina, Slovenia, Serbia, Italy, Russia, Britain and Macedonia. Šterc estimates that these are mostly people who own real estate or companies in Croatia.

Since Croatia has not found a way to stop the emigration of its young population and did not address the issue more seriously, further increase in the immigration of foreign workers is expected. For comparison, in 2018 there were twice as many foreigners with temporary residence approved than in 2017. “We have the emigration of young people from Croatia and the immigration of mostly poorly educated foreigners. We are approaching the point when the number of foreigners moving in will almost equalise the number of our people moving out. This is a serious process, and if it is intensively pursued over the next ten years, there will be ‘the population exchange’,” says Šterc.

The number of descendants of Croatian emigrants who have been granted Croatian citizenship has also increased. There were 1,005 of them last year, and most of them came from South America, Australia and the USA.

More news on the demographic trends in Croatia can be found in the Politics section.

Translated from Večernji List (reported by Dijana Jurasić).

ZAGREB, February 1, 2019 - Croatia's labour market is recovering unevenly by region but the number of the jobless is decreasing faster than the number of people with jobs is increasing, which is a reflection of emigration and demographic trends, according to a Chamber of Commerce (HGK) labour market analysis.

The jobless are more inclined towards emigration, and lower birth-rates result in smaller pressure on the employment office and this impacts the population, which is decreasing in nearly every county, the analysis shows.

As with other macroeconomic indicators, the labour market is different when broken down by region, as are the speed and duration of recovery after the economic crisis which lasted several years in every county, the HGK says.

The year 2017 saw a labour market recovery both at national and county levels. That year 11 counties recorded lower unemployment than in 2008, the year before the crisis.

Although in 20 counties there were fewer jobless than in 2008, only four counties recorded a simultaneous rise in the number of persons employed. This means that the decrease of unemployment was faster than the growth of employment, which was related to demographic and emigration trends, the HGK says.

Favourable trends in unemployment began sooner than in employment, so the continuous decrease of unemployment began in most counties four years ago and every county recorded a decrease over the past three years.

Bjelovar-Bilogora, Dubrovnik-Neretva, Osijek-Baranja and Lika-Senj were the counties in which recovery began in 2015. In 2017, annual drops in unemployment exceeded 20% in ten counties, the largest were recorded in the counties of Krapina-Zagorje (-28.6%), Varaždin (-28.3%) and Koprivnica-Križevci (-27.6%).

Those three counties recorded the largest unemployment drops in the past three years as well, above 50%. The slowest decreases were recorded in the counties of Lika-Senj (-28.1%), Dubrovnik-Neretva (-28.7%) and Šibenik-Knin (-29.4%). Dubrovnik-Neretva was the only county which had more jobless in 2017 than in 2008.

In 2017, 11 counties had lower unemployment rates than in 2008, with Karlovac and Zadar counties recording the biggest differences.

More news on the emigration from Croatia can be found in the Politics section.

In recent days, many users of Facebook and other social networks have been sharing their photos from 10 years ago and nowadays, comparing what has changed in the meantime. Journalists have decided to do the 10 Year Challenge for Croatia as well and see what has happened in and with Croatia in the meantime, reports Index.hr on January 19, 2019.

Ten years ago, in 2009, Croatian Prime Minister was Ivo Sanader (tried for several cases of corruption; spent time in prison), while President was Stjepan Mesić (still alive and well; in political retirement). That was a turbulent political year, in which Sanader suddenly resigned, without giving a convincing explanation, with his deputy Jadranka Kosor (lost elections in 2011; removed as HDZ president soon after that; now a retiree and prolific Tweeter user) taking over the government on 1 July 2009.

It is nice to remember some of the better-known politicians who were ministers at the time. Some have since disappeared from politics, some have been convicted of various corruption crimes, and some are still active today. For example, in the Sanader government, the regional development minister was Petar Čobanković (convicted of corruption, instead of going to prison he spent some time peeling potatoes as community service). Interior Minister was Tomislav Karamarko (elected as HDZ president; became deputy prime minister; resigned due to a scandal; thinking about returning to politics), transportation minister was Božidar Kalmeta (tried for corruption), while today's Speaker of Parliament Gordan Jandroković was foreign minister. Darko Milinović, recently thrown out of HDZ, was health minister. Croatia was not yet a member of the European Union but was admitted to NATO that year.

In the last ten years, Croatia has lost many of its inhabitants. The six-year recession has left a profound mark on the economy, and it has also created a sense of doom, prompting a wave of emigration. The scale of the population decline is best seen by the fact that in the 2018/2019 school year there are six schools which have been closed because they were left with no students, while 117 schools saw not a single new student being enrolled.

The estimates of the State Bureau for Statistics for 2017 give a figure of 4.1 million inhabitants, which is about 200,000 less than in 2007 when 4.3 million people lived in Croatia. Given that there is no data for the current year, and the latest official data is for 2017, for comparison purposes the journalists have analysed the decade from 2007 to 2017.

In addition to the number of inhabitants, the number of employed fell from 1.517 million in 2007 to 1.407 million in 2017. It was even less at various points in the last ten years. As the number of employees fell, the number of pensioners rose, which jeopardises the retirement system because salary contributions of current workers fund the pensions of existing retirees. Thus, in 2007, the number of retirees was 1.11 million, while in 2017 the number rose to 1.23 million.

As for the public debt, in 2007 it amounted to 120 billion kuna, while by the end of 2017 it had exploded to 283.3 billion kuna.

There was also a rise in public spending. If we add to the state budget the expenditures of the Croatian Health Insurance Institute, public spending amounted to 111.1 billion kuna in 2007 and reached 146.1 billion kuna billion in 2017.

Basically, in ten years almost everything that was supposed to grow fell, and all that was supposed to drop increased instead.

More news on Croatian politics can be found in our special section.

Translated from Index.hr.

Years pass, but some things never change in Croatian politics. The year which is about to end has again been full of drama and scandals, and just occasional good news. Remarkably, many of the same issues which you will read about here have featured prominently in our reviews for 2016 and 2017 as well, which just shows that most problems in Croatia are just swept under the rug and never solved. What follows is Croatian Politics 2018, a review of events which will be remembered from the past year, as reported by TCN.

The year began with tensions in the Bay of Piran, part of the Adriatic Sea which Croatia and Slovenia both claim. In late 2017, Slovenia decided to implement the decision by arbitration tribunal which awarded Slovenia most of the bay. However, Croatia has refused to accept the decision, saying that the arbitration process was compromised by Slovenian government representatives who were in collusion with a supposedly independent arbitrator. The tensions raged for a few weeks, with MEPs proposing military solutions and war veterans talking about organising a rather provocative regatta. Eventually, reason prevailed, and the tensions died down. However, the issue is still unresolved, despite assurances to the opposite, with Croatia calling for negotiations and Slovenia insisting on the implementation of the arbitration decision. You are sure to read about this dispute in our 2019 review as well, particularly given Slovenia’s decision to file a lawsuit against Croatia.

Relations with Serbia are always in the focus of interest, and this year was no exception. In January, the government was surprised to hear that President Kolinda Grabar-Kitarović had invited Serbian President Aleksandar Vučić to visit Croatia officially. After a short argument over who is really leading Croatia’s foreign policy, Vučić arrived in Zagreb. While the visit mostly went well, the relations between the two countries deteriorated steadily throughout the year and the debate about whether Vučić should have been invited at all continued. Another turn for the worse took place in April when a Croatian parliamentary delegation’s visit to Belgrade was cut short after an incident in the Serbian parliament caused by a notorious Serbian MP and war criminal Vojislav Šešelj. Tension rose again in August when the anniversary of Operation Storm is traditionally celebrated, marking Croatia’s liberation of previously occupied territories in 1995. Serbian President Vučić gave a series of provocative statements, including comparing Croatia to Hitler.

As for the economy, January brought the first worrying signs about the future of Croatian shipyards, a low number of new orders, and about the government’s apparent unwillingness to continue to cover shipyards’ losses. Later in the year, the crisis in the Uljanik shipyard in Pula and its 3. Maj branch in Rijeka would feature prominently in our reporting. Workers spent months striking due to unpaid wages. As the year ends, the situation is still dire and “strategic partners” which the government hopes to find are nowhere to be seen.

“Reforms” is one of the most popular words of Croatian politicians. Every year in January we can hear officials saying that the year ahead is “the year of reforms” which will make Croatia much more prosperous. Needless to say, these promises are never fulfilled, and 2018 did not disappoint. The issue served the president well since she was able to attack the government for lack of reform efforts whenever it suited her.

Ideological debates and historical revisionism attempts continued in 2018 as well. In February, the government-appointed historical commission published its recommendations on issues related to the authoritarian regimes from Croatia’s past, but the conclusions did not satisfy anyone, except for the prime minister, who likes to pretend that the recommendations have solved the problem.

The year which is about to end has again brought us the problem of censorship, questions about media freedoms, warnings about the rise of the far right, separate commemorations held in Jasenovac, the parliament refusing to sponsor anti-fascism events, people destroying flower beds because they reminded them of communism, historical revisionism on the public television, assaults on journalists, satirists receiving death threats, “suspect” politicians being assaulted, photos of Tito slipping from under Croatia’s coat of arms, former prime ministers being sentenced for corruption, and media regulators receiving death threats.

The Catholic Church is undoubtedly part of the political life in Croatia, so it is no wonder that rumours about changes coming to its leadership draw considerable attention. While nothing has been confirmed, it is expected that the Archbishop of Zagreb, Cardinal Josip Bozanić, could be replaced in the new year. In the meantime, the church has continued to receive vast amounts of money from the state budget, meddle in politics, as well as advise the government on the new abortion law, 

The demographic crisis continued, with high emigration and low birth rates bringing down the number of inhabitants. The president and the government argued about who and what was to blame. The president even presented her measures to solve the problem, which were soon forgotten, and demanded a special session of the government, which never took place. Proposals were presented on how to convince people not to move, as many sectors faced a lack of workers, while many schools started closing down. The extent of the crisis was such that even Serbian President Vučić became "worried." The only “good news” came at the end of the year when reports claimed that the emigration wave was calming down because everybody who wanted and could have left already did.

One of the issues we write regularly in these annual reviews is the construction of Pelješac Bridge, which will connect the Dubrovnik area with the rest of Croatia without the need for travellers to pass through a short stretch of Bosnian territory. After many years of delays, the project has finally moved into the implementation phase. Early in the year, a decision was made to award the tender for the construction to a Chinese consortium, despite protests made by Bosnia and Herzegovina that the bridge could not be constructed before the border between the two countries in the area is defined. The decision to award the contract to a Chinese bidder also brought about a marked change in relations between Croatia and China, which were later further improved by high-level meetings and visits.

Another perennial issue is the future of INA, Croatia’s national oil company, which is owned jointly by the Croatian government and MOL, Hungarian national oil company. In 2016, the prime minister announced that Croatia would buy back MOL’s share of INA. Two years later, nothing has changed. Earlier this year, the government selected financial advisors for the buyback, but the contract with them was never signed. One of the main issues is the future of the INA refinery in Sisak. While in January the relevant minister said he was optimistic about the refinery’s future, by the end of the year he apparently changed his opinion. Another issue is Croatia’s arrest warrant for MOL’s CEO, which Hungary does not want to implement.

Another year has passed, and the supposedly “strategic” project of an LNG terminal on the island of Krk has again gone nowhere. Multi-year delays have continued. The government announced two tenders trying to find out who would be interested in using the terminal once it is built (if that ever happens), but the results were dismal. Just two government-owned companies applied, presumably after receiving a nudge from officials to send their applications and help the government avoid a total disaster. While the project receives verbal support from foreign governments, no one seems to be interested in sending binding offers to use its capacity.

One piece of good business news was the apparently successful conclusion to the worst part of the crisis in Agrokor, one of Croatia’s largest and most important companies. The agreement between creditors was concluded, thanks mostly to Russian banks, although not without an accompanying scandal about high fees paid to consultants, some of whom actually took part in the secretive process of writing the special law which the government adopted to save the company from collapse. The scandal took out Deputy Prime Minister Martina Dalić and government-appointed commissioner Ante Ramljak, who had to resign under pressure. E-mails were published which showed that the prime minister knew more about the dealings than he initially admitted, but he managed to escape more or less unharmed. Agrokor’s former owner Ivica Todorić, who fled earlier to London to avoid arrest, was extradited to Croatia late in the year, after multiple delays and court proceedings. Even Tony Blair’s wife could not help him. He has since been released on bail and is currently awaiting possible indictment. The legal proceedings are expected to last for many years.

Good economic news brought us the first upgrade in Croatia’s credit rating since 2004. Unemployment numbers were also down, although more due to mass emigration than to economic revival. Good tourism results, especially in the pre-season and post-season, helped Croatia achieve planned economic growth for 2018 (still among the lowest in the EU). Slightly more moderate growth is expected in 2019, with the lack of reforms being the main culprit. The budget recorded another good year, with spending and revenues being more or less balanced, while the public debt has continued to decline. The year ended with another round of tax cuts and pension reform. Croatia has also announced plans that it will adopt the euro as its currency. The process is expected to last many years.

The ratification of the convention on preventing violence against women, the so-called Istanbul Convention, somewhat unexpectedly turned into a crisis for the government in April when a large group of HDZ MPs decided to vote against the proposal, despite prime minister’s insistence that it should be ratified. While the convention was easily adopted thanks to opposition support, it turned into another attempt by HDZ’s right wing to weaken or possibly topple Plenković as party leader and prime minister. Just like several other similar attempts, it did not succeed.

A national security issue which has drawn a lot of media attention throughout the year is the acquisition of military fighter jets. The decision was first delayed for years, then it was supposed to be made in 2017, but again delayed first to early 2018, and then beyond. After much lobbying, the government finally decided to buy 12 F-16s from Israel. The questions about the deal persisted, with many asking why Croatia was “rejuvenating” its air force with ancient aircraft. By the end of the year, the contract for the deal has not yet been signed, amid disputes between the United States and Israel about what equipment Israel can legally sell to Croatia. Grand plans about “strategic cooperation” with Israel also appear to be on hold. Defence Minister Damir Krstičević has invested a great deal of personal effort in the deal, but the acquisition is still in question, and its final fate is yet to be determined.

As expected, the political circus took a break in June due to the World Cup in Russia. While the break was initially expected to last just a couple of weeks, until the Croatian national team is eliminated in the first phase of the competition as usual, its spectacular success extended the political break to a full month and more. Of course, leading politicians did not miss this opportunity to travel to Russia and have their picture taken with footballers and fans. Needless to say, even this occasion, which was supposed to unite the country, brought divisions, primarily due to an appearance by a controversial singer at the homecoming ceremony, which was attended by hundreds of thousands of people.

The Istanbul Convention ratification prompted one of this year’s two referendum initiatives to be launched. The other effort involved proposed changes to the election laws, which would substantially reduce the rights of national minorities to elect their MPs. The government was against the referendums, while the president seemed to be of a different opinion. While both initiatives claimed they had gathered enough signatures for the referendums to be held, the government checked the signatures and conveniently found enough irregularities to lower the number of accepted signatures below the required threshold. This was just one of several attempts to pressure the government from the right.

One of the rare reforms which have begun, at least nominally, is the reform of Croatia’s education system, the so-called “curricular reform.” The issue has caused conflicts between coalition partners, with HNS repeatedly threatening to leave the government if their proposals are not accepted. Their threats were not taken seriously by anyone since it is clear that early parliamentary elections would probably bring about an end for the party.

A scandal broke in September whose consequences are still unclear at this time. A ministerial driver was arrested under suspicion that he had informed a suspect about a police investigation against him. Interestingly, the driver is a close friend of Milijan Brkić, HDZ deputy president and Prime Minister Plenković’s chief intraparty nemesis. While Brkić has denied having any role in the scandal or leaking the information about the investigation, he has been conspicuously absent from public affairs in recent months. Other scandals involving Brkić have also resurfaced, prompting allegations that his opponents were trying to eliminate him politically. On the other hand, some potentially embarrassing documents about him suddenly disappeared. The scandal has even reached the president’s office, with the national security advisor resigning in December under still unclear circumstances.

Relations between Croatia and Bosnia and Herzegovina, as well as the connected issue of the status of Croats in the neighbouring country, were at the forefront of Croatia’s foreign policy efforts in 2018. With October elections looming, the year began with Bosnian Croats warning that the election law was unfair and that it could lead to a Croat representative in the Bosnian presidency being elected by more numerous Bosniaks. That is precisely what happened, with candidate Željko Komšić winning the post, although he apparently did not have the support of the majority of Bosnian Croats. This prompted Croatia’s government to launch a campaign within the EU to pressure Bosnia into changing its election law, which then brought accusations about meddling in internal affairs of the neighbouring country.

One of the potentially most explosive events of this year was a war veterans’ protest held in Vukovar in October. The veterans complained about the lack of prosecution of persons suspected of committing war crimes against Croats in the Vukovar area in 1991, which was a problem which they discussed earlier in the year as well. However, many believed that the protest was actually just a guise for a right-wing attempt to bring down the government led by moderate Prime Minister Andrej Plenković and replace him as HDZ president with a more extremist candidate. Plenković and his team appeared at first worried that the attempt might succeed, but with time they managed to limit its consequences. Once held, the protest passed without incident and has been more or less forgotten, except when occasional arrests in the area do happen, which then draw condemnation from local Serbs who say the police is arresting then just to satisfy the Croat war veterans. In the meantime, tensions in the town continue.

Throughout the year, rumours about impending ruling coalition reshuffle and/or early parliamentary elections continued. However, unlike in 2017, which brought about a change in the ruling coalition composition, with MOST being replaced by HNS, this year the government was more or less stable. One potential candidate for another reshuffle was Zagreb Mayor Milan Bandić, whose parliamentary group somehow manages to “convince” previously opposition MPs to switch parties and cross to his side. Numerous legal proceedings against him have not made him any less desirable patron. The substantial Zagreb city budget which he controls probably has something to do with it. In two years, he has managed to increase the number of his MPs from 1 to 12, with additional expansion of his parliamentary group expected early in the new year. The fact that people did not vote for his party did not discourage him at all. There are rumours that Bandić will use the increase in the number of his MPs, who are crucial for the parliamentary majority, to demand several ministerial posts in the new year.

As for the opposition, turmoil in SDP continued, with several attempts being made to topple the party president and “the leader of the opposition” Davor Bernardić. Fortunately for SDP opponents, these attempts have been unsuccessful, so Bernardić remains in his seat while his party’s popularity continues to plummet, with the latest polls showing it dropping to the third position, behind HDZ and Živi Zid. An increasing number of SDP MPs are leaving the party, with some of them joining the government ranks.

The migrant crisis continued, particularly on the border with Bosnia and Herzegovina, with the police employing ever harsher measures to control the borders and NGOs publishing increasingly critical reports about the alleged police violence and irregularities. The police have repeatedly denied any wrongdoing, despite video evidence to the contrary.

The migration issue also brought us another controversy, this time with the signing of the Global Compact for Migration in December. President Kolinda Grabar-Kitarović, who this year marked three years in office, initially supported the agreement, but then suddenly changed her mind, announcing she would not travel to Marrakesh where the UN conference was held. The government immediately said that Croatia would support the declaration nevertheless, which caused protests from right-wing circles. In the end, the non-binding resolution was supported by Croatia, but no-one really expects it will be implemented.

The final few days of the year brought us another major scandal, whose consequences will become clear in the following months. The president decided to dismiss her domestic policy adviser Mate Radeljić, who many believed had influenced the president to take a more critical position towards the government. After he was dismissed, Radeljić said he was threatened by a Security-Intelligence Agency (SOA) official not to try to damage the president politically after being dismissed. He was allegedly told that the agency was ready to run into him with a car if necessary. The president’s office and the SOA issued statements saying they had acted legally, but interestingly they did not outright deny all of Radeljić’s claims. It is expected that Radeljić’s dismissal will result in better relations between the president on the one side and the government and HDZ leadership on the other, just in time for the presidential elections next year.

Another exciting political year is ahead of us. It will include at least two elections (for European Parliament in May, and for president probably in December), and there is always a possibility the early parliamentary elections might take place. Stay with TCN for all the latest political and business news.