April the 22nd, 2023 - Croatian OECD entry could occur in the year 2025 at the very earliest, but important reforms must take place and the country must deal with its endemic problems surrounding nepotism and corruption.

As Poslovni Dnevnik/Ana Blaskovic writes, six full years after sending the letter of intent and one year since the opening of negotiations with the Organisation for Economic Cooperation and Development (OECD), Croatia could be admitted in 2025 at the earliest, Prime Minister Andrej Plenkovic said at the recently held conference "Croatia on the way to OECD: What does membership bring?"

For the head of the government, joining the prestigious club of 38 countries, of which 22 are EU members, is the third (remaining) strategic foreign policy goal after joining the Eurozone and the Schengen area.

State companies and banks

Unlike the situation with Eurozone accession, the Croatian OECD entry process has no deadline set, and the green light depends on the rigorous evaluation of more than 20 technical committees that assess whether the candidate country, in this case Croatia, has fulfilled the reforms and aligned itself with all of the rather stringent OECD standards, policies and practices. With this in mind, it isn't remotely surprising that the Prime Minister "retained some flexibility" regarding the entry date.

"Through the guidelines and programmes of the OECD, there will be an improvement in all those segments of Croatian society that we've already brought to a very high level with EU membership, and with OECD membership, we're going to be making it even better," Plenkovic believes. Next week, he announced, the government will revise the forecasts of GDP growth this year to 2 percent, but also announce a drop in the share of public debt in GDP to 68.4 percent and last year's budget surplus to 0.4 percent.

What the prime minister sees as a special added value, a system that will improve the corporate management of companies in (co)ownership of the state, is also one of the biggest obstacles facing Croatia at this moment in time. There is considerable apparent resentment for the fact that state-owned companies are very open to political infiltration, the serial production of corruption scandals and operate inefficiently.

Earlier, it was clearly stated that, although not mandatory, the recommendations on the centralisation of state ownership, the professionalisation of management and the tidying up of the regulatory framework, represent ''aqis'' for Croatian OECD entry.

"Through the accession process, Croatia will implement numerous reforms in the field of public administration, healthcare, trade, education, agriculture, transport and the management of state-owned companies,'' assured Goran Grlic-Radman.

OECD Secretary General Matthias Cormann said that Croatian OECD accession will be a positive transformative journey as it will lead to a rise in standards and bringing income and productivity closer to the OECD average. "These aren't just formalities but will provide tangible benefits to Croatia's residents," said Cormann during his very recent visit to Zagreb.

Government proposals coming soon

In the panel discussion that followed, Finance Minister Marko Primorac asserted that the Ministry of Finance is participating in the work of nine committees, and out of five OECD questionnaires, four have been completed. He announced that he will soon come out with proposals aimed at ownership policies, portfolio management, the equalisation of salaries, as well as certain "steps in the depoliticisation of Supervisory Boards and Management Boards".

"It's certain that Croatia's membership in the OECD and the reforms which need to be carried out in order to make that happen will further contribute to easing the business environment and creating a more productive, competitive and profitable Croatia," stated HUP (Croatian Employers' Association) director Irena Weber.

''For Croatia, the benefits of OECD membership include support for reforms through the sharing of best practices, participation in global debates and support for G7 and G20 policies. All of this increases the confidence of investors, often also the credit rating,'' said Gita Kothari, Deputy Director of the Directorate for Legal Affairs of the OECD.

For more, make sure to check out our dedicated news section.

ZAGREB, 10 April 2022 - Croatia has adopted the fewest relevant standards of the six current candidates for accession to the Organisation for Economic Cooperation and Development (OECD), and its chief negotiator Gordan Grlić Radman believes talks could be completed in two and a half to three years.

The OECD formally launched accession talks with six candidate countries on 25 January.

Croatia has adopted 29 legal instruments of a total of 253 required by the Paris-based club of industrially developed countries.

Brazil has adopted 105 instruments, Romania 56, Argentina 51, Peru 46 and Bulgaria 33, according to data from the OECD website.

Founded in 1961, the OECD is a forum of countries which call themselves democracies and market economies. It is financed by its member-states which discuss global problems and publish economic analyses.

"We have become a member of all relevant international organisations except for the OECD," Grlić Radman said in a video message to Croats attending a meeting of the diaspora in Paraguay a week ago.

Accession to the OECD is politically important to the Croatian government and it has therefore entrusted the Foreign Ministry with conducting the accession talks.

Brazil, who has made the most progress in accession talks, has entrusted that role to its Economy Ministry, led by Paulo Guedes.

In February 2022 the Croatian government formed a negotiating team for talks with the OECD, with Grlić Radman as the chief negotiator. A representative of the Economy Ministry was also appointed a member of the team.

On 16 March Grlić Radman met in Paris with OECD Secretary-General Mathias Cormann, saying in a Twitter post afterwards that he had an excellent meeting.

Croatia submitted an official request to join the OECD on 25 January 2017.

"However, due to objective circumstances and inability to participate in OECD working bodies, our progress on that path has been slowed down for most of the time since the submission of the membership request," the Foreign Ministry said in a reply to Hina, without specifying the objective circumstances.

"In 2021 our cooperation with the OECD intensified more significantly and we were given the opportunity to join more working bodies, which eventually led to the opening of talks on 25 January 2022," the ministry said.

It noted that work was underway with the OECD on implementing "demanding reforms" in areas such as state administration, digitalisation, green policy, labour market and justice.

In June 2021 the OECD said that Croatia had to improve corporate governance in state-owned companies.

It recommended that Croatia establish a body in charge of ownership coordination, requesting greater transparency and public announcements for those companies, as well as stronger autonomy and independence of supervisory boards in state-owned companies.

The Foreign Ministry said a steering board was formed by the Physical Planning, Construction and State Assets Ministry, with representatives of state administration bodies participating in it, which adopted an action plan for the implementation of OECD recommendations.

The process of meeting the conditions from the action plan is proceeding as planned and the reform of corporate governance is expected to be completed by 2024, the Foreign Ministry said.

OECD technical committees, consisting of representatives of member-countries, oversee the adoption of legal instruments, an OECD spokesperson has said.

At the end of the process, the OECD carries out a full review to make sure the countries have really done what they were asked to do, the spokesperson says.

After that, the OECD Council, the main steering body of the organisation, decides on a country's accession.

According to preliminary estimates by the OECD, Croatia's accession talks would not last longer than two and a half to three years, officials at the Croatian Foreign Ministry said.

For more, check out our politics section.

ZAGREB, January 17, 2020 - Croatian Foreign and European Affairs Minister Gordan Grlić Radman met with the Secretary-General of the Organisation for Economic Cooperation and Development (OECD), Angel Gurria, in Paris on Thursday, for talks on Croatia's accession to that organisation, the Foreign and European Affairs Ministry said.

Croatia's accession is being blocked by Slovenia because Zagreb is refusing to implement an international arbitration ruling on the two countries' border.

Until recently, the country's accession was blocked by Hungary which claimed that Zagreb was not honouring a decision by an international arbitral tribunal in the INA-MOL case. Budapest has in the meantime lifted its blockade.

Also, members have still not agreed on further enlargement, and decisions on further enlargement are made by consensus.

Gurria commended Croatia's commitment to drawing closer to OECD membership by intensifying its participation in various working bodies and accessing OECD instruments.

"Croatia has been working with commitment to meeting the criteria for membership, which is very useful for development and reform implementation, and that is one of our most important national priorities," said Grlić Radman.

After the meeting with Gurria, Grlić Radman also took part in a forum on migrations and integration challenges.

The OECD is an international economic organisation that brings together 36 more developed countries.

More news about Croatia and the OECD can be found in the Politics section.

ZAGREB, March 12, 2019 - The US government did not block Croatia's bid to join the Organisation for Economic Cooperation and Development (OECD), US Ambassador Robert Kohorst said at a business lunch organised by the American Chamber of Commerce (AmCham) in Zagreb on Tuesday.

Jutarnji List newspaper said last week that Washington was opposed to Croatia's OECD membership bid, possibly because of problems with the restitution of Jewish and Serb Orthodox Church property, government reactions to Holocaust denial and Ustasha symbols, corruption and discrimination against LGBT people and other minorities.

"Membership is cooperative discussion among all the members and is done in confidence. I don't know the process, but America is not blocking anything," Kohorst told reporters, declining to say whether Croatia was ready to join.

Croatia formally applied for OECD membership three years ago. Bulgaria, Romania, Peru, Argentina and Brazil are also waiting for accession negotiations to begin.

Croatia's bid has been blocked by Slovenia over Zagreb's refusal to implement the border arbitration ruling. Hungary has recently withdrawn its blockade.

Founded in 1961 and based in Paris, the OECD is an intergovernmental economic organisation aimed at boosting the economic growth of the member states and increasing living standards.

More news about Croatia and the OECD can be found in the Politics section.

After Hungary withdrew its opposition to Croatia's entry into the Organization for Economic Co-operation and Development (OECD), the organisation of 36 most-developed countries of the world, Slovenia has remained alone in its position to continue blocking Croatia's membership. However, according to the latest information, the United States is also opposed to Croatia's accession to the OECD, reports Jutarnji List on March 8, 2019.

Asked whether the information that the US is blocking Croatia's OECD membership is correct, the US embassy in Zagreb said that "the OECD is an organisation based on consensual decision-making and that any decision on the beginning of the process of admitting another country requires the consent of all 36 OECD members.”

The very fact that the embassy did not deny blocking Croatia's entry into the OECD seems to indicate that there are issues. The Croatian Ministry of Foreign Affairs acknowledges that the United States opposes Croatia's accession to the OECD, but argues that there is no specific problem between the US and Croatia.

“In addition to Croatia, five more countries are awaiting an invitation to start accession negotiations with the OECD (Bulgaria, Romania, Peru, Argentina and Brazil). The USA does not generally oppose the OECD's enlargement to new members but believes that sufficient capacity has not yet been built within the OECD to admit so many countries. Therefore, it demands from the OECD Secretariat and all current members to implement certain reforms to create the preconditions for better functioning of the organisation,” said the Ministry.

Hungary had for a full year blocked Croatia's entry into the OECD, claiming that Zagreb did not respect the decisions of the UN tribunal (UNCITRAL), which stated that there was insufficient evidence that the 2009 contracts concerning INA and MOL oil companies were a result of corruptive activities. In late November last year, Foreign Minister Marija Pejčinović Burić said that Hungary had withdrawn its blockade, but did not provide any explanation. Slovenia is still blocking Croatia's entry into the OECD because of Croatia’s rejection of the border arbitration ruling.

While the reporters were unable to receive any official explanation from the embassy about reasons for stopping Croatia with regard to the OECD membership, some specific complaints can be found in the State Department report for 2016 (published in 2017). This primarily concerns the issue of property restitution. “The restitution of property remains a problem for the Serbian Orthodox Church and the Coordination of Jewish Communities in Croatia, an umbrella organisation representing Jewish communities from across the country, especially the Jewish Municipality of Zagreb. Since 2014, there has been no return of Jewish community property, although there are several requests in the process. Jewish organisations have reported significant problems with the process of recovering private property seized during and after the Second World War,” the report said.

Furthermore, the report also notes that "the Jewish community leaders have put forward evidence of denial of the Holocaust and publicly expressed dissatisfaction with the response of the state to the installation of a memorial plaque with Ustasha greeting from World War II, which a group of war veterans put in 2016 near the Jasenovac concentration camp site." It also states that "there was discrimination of ethnic Serbs and Roma".

Additionally, when it comes to the judiciary, it is highlighted "that the convictions in high profile corruption have often been abolished after an appeal." "Corruption remains a problem, and a significant number of corruption cases is ongoing. Media problems were also mentioned, especially the "lack of transparency about media ownership," especially in local media. The State Department also stressed that "LGBT activists stated that members of their community had limited access to justice, many of whom were reluctant to report violations of their rights due to concerns about the ineffective justice system and fear of further victimisation during court proceedings."

Translated from Jutarnji List (reported by Frenki Laušić).

More news about the OECD membership can be found in the Business section.

ZAGREB, November 17, 2018 - Hungary supports Croatia's accession to the Organisation for European Cooperation and Development (OECD), Foreign and European Affairs Minister Marija Pejčinović Burić has said in an interview with the Večernji List daily, which means that Slovenia remains the only country blocking Croatia's entry into the club of the world's most developed countries.

"Hungary is our neighbouring and friendly country with which we share many historical, cultural and other ties, but surely the ties between our people are the strongest, and they are firm and close. Hungary supports our accession to the OECD," the minister said in the interview with the Večernji List issue of Saturday.

She did not speak about any details, but Hina has been told that Hungary no longer opposes Croatia's accession to the 36-member organisation.

Over the past year, Hungary was blocking Croatia's accession to the OECD, claiming that Zagreb does not respect decisions of the United Nations Commission on International Trade Law (UNCITRAL), which has ruled that there is insufficient evidence to prove that agreements signed in 2009 by the Croatian government and the Hungarian oil company MOL regarding management rights in the Croatian oil company INA were a result of corruption.

Slovenia is still blocking Croatia's accession due to Croatia's refusal to recognise a ruling by an international arbitral tribunal on the two countries' border dispute.

Hungarian Prime Minister Viktor Orban said in Budapest on Friday that he would pay an official visit to Croatia in early December, the MTI news agency reported.

Speaking of relations with Croatia, Orban said that the Hungarian government believed the dispute regarding MOL should be dealt with within the company and not through talks between the two governments.

I have tried to explain that raising the dispute regarding MOL to the government level would result in a stronger response from Hungary, which can be very harmful for bilateral relations, said Orban. International courts must decide on the legal aspects of relations between the two companies and Hungary will honour their decisions, he said.

For more on the INA-MOL affair, click here.

ZAGREB, April 22, 2018 - Croatian Foreign and European Affairs Minister Marija Pejčinović Burić held talks in Toronto on Saturday with her Canadian counterpart Chrystia Freeland, who expressed Canada's full support to Croatia's joining the Organisation for Economic Cooperation and Development (OECD).

ZAGREB, February 19, 2018 - As a member of the Organisation for Economic Cooperation and Development (OECD) and the Schengen area of passport-free movement, Slovakia wants to see Croatia join the two organisations, Slovak Foreign Minister Ivan Korčok said on Monday in Zagreb, where he arrived to share his country's experience in the presidency of the EU.

ZAGREB, January 18, 2018 - Italy supports Croatia in its efforts to join the Schengen Area and the Organisation for Economic Cooperation and Development (OECD), Foreign Minister Angelino Alfano said in Rome on Thursday, adding that Croatia and Slovenia should resolve their border dispute through cooperation to their mutual satisfaction.

The Prime Minister is in Paris where he is lobbying for membership in the OECD.