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.

ZAGREB, December 22, 2018 - Following claims by former presidential adviser Mate Radeljić that the Security and Intelligence Agency (SOA) was involved in his dismissal, the Office of President Kolinda Grabar-Kitarović said on Saturday that no pressure had ever been exerted on anyone to resign.

"The Office of the President of the Republic most resolutely dismisses the malicious claims that pressure was ever exerted on anyone, either directly or indirectly to resign. In practice, only one signature is enough for an official to be dismissed or appointed at the Office, which makes the claims that it was necessary to inappropriately involve any third party all the more absurd and untrue," the President's Office said in a statement.

It added that the President chooses her aides in accordance with her policy goals and in the belief that they will perform their duties professionally and honourably, both during and after their term in office.

The President said she also expects all relevant services to follow the rules, laws, guidelines and professional standards in their work.

The President's Office announced in a press release on Friday morning that Mate Radeljić had been relieved of his duties as domestic policy adviser.

On Friday evening, Radeljić said in a press release that he had been threatened by the SOA and that he had been told by the President that he did not fit into her plans because he was an obstacle in her relations with the Prime Minister.

The SOA promptly dismissed his statement, saying that it operates in accordance with the constitution, the pertinent laws and the annual guidelines on the operation of the security and intelligence agencies adopted by the National Security Council.

More news on the so-called Mate Radeljić affair which has been in the media focus in recent days can be found in our Politics section.

ZAGREB, December 22, 2018 - Social Democratic Party (SDP) leader Davor Bernardić has said that accusations by Mate Radeljić, who was relieved of his duties as President Kolinda Grabar-Kitarović's domestic policy advisor, again give rise to suspicion about the abuse of the intelligence system by the Croatian Democratic Union (HDZ).

In a statement issued on Friday, in which he described the circumstances of his dismissal, Radeljić said that he was threatened by the Security and Intelligence Agency (SOA) and that the president told him he did not fit her plans as he was an obstacle in her relations with the prime minister.

Radeljić said that he was informed of the decision on his dismissal by Davor Franić, the chief of staff of SOA head Daniel Markić, and that Franić said he had to let him know that SOA "will protect the president in every way from my possible negative activity after leaving the president's office and that he was ready, if so instructed, to run into me with a car."

"Radeljić's accusation is serious and gives rise to serious suspicion that the HDZ has abused the intelligence system. If the President really used SOA to settle scores with Radeljić, then she must leave because she has violated the Constitution. If she did it in agreement with Prime Minister Andrej Plenković, in exchange for getting the HDZ's support in presidential elections, then Plenković, too, has to leave. The ruling structures are evidently prepared to do anything to stay in power," Bernardić told reporters during a visit to Sisak.

"I can only call on the Office of the Chief State Prosecutor (DORH) to respond promptly and interview all those involved, primarily the president and the prime minister. It never happened before in our 27-year-long history that the intelligence community, which is controlled by the prime minister, is faced with such serious accusations of death threats. That's why this should be investigated," Bernardić said.

He said that he expected DORH to act as its failure to respond in earlier scandals was the reason why people were losing trust in state institutions.

Bernardić said that Social Democrat Ranko Ostojić, who chairs the parliamentary committee on home affairs and security, would give a statement on the matter during the day and request an extraordinary session of the committee.

More news on the Mate Radeljić scandal can be found in our Politics section.

ZAGREB, December 22, 2018 - In a comment on her decision to relieve her domestic policy advisor Mate Radeljić of his duties, President Kolinda Grabar-Kitarović said on Friday that new times required new ideas and solutions and that she had decided to enter 2019 "on the wings of positive initiatives from the outgoing year, such as demography and branding", which was why she had appointed former journalist Mirjana Hrga as her advisor on strategic policies and relations with the government and parliament.

"I want to achieve synergy between domestic and foreign policies, and naturally national security policy, and I want to mark this year with positive initiatives with which I will help the government and the parliament deal with the problems the Croatian society is faced with," Grabar-Kitarović said in an interview with the Croatian Television (HTV), aired on Friday evening.

The interview was broadcast before Radeljić issued a statement on his dismissal, in which he said that had to resign because he was threatened by the Security-Intelligence Agency (SOA).

Asked about the extent of involvement of her advisors in the fake text message affair, considering that since it broke out, her defence and national security advisor Vlado Galić has resigned as well, Grabar-Kitarović said that the affair should be investigated by relevant state institutions and that it would be "inappropriate" of her to "speak about the advisors on their behalf".

Asked if her advisors had tried to topple Prime Minister Andrej Plenković and prepare ground for her to take over the Croatian Democratic Union (HDZ), Grabar-Kitarović categorically dismissed such a possibility, and she also dismissed claims that she was getting rid of her advisors so that she could launch a campaign for a second term in office without any burden and with the support of the HDZ.

"I was never told who to hire as an advisor or who to dismiss, Prime Minister Plenković never interfered in my personnel policy, just as I would never interfere in his," she said, recalling that in the past four years, several people had left her office. "Some sought an opportunity elsewhere, I support ambition and try to help everyone in accomplishing their ambitions, both business and private."

Responding to the interviewer's remark that some would describe Radeljić as one of her closest associates, she said that all of her advisors were equally close and important to her.

Speaking of her relations with the government in the outgoing year, she described them as good. "I pointed to problems in the society and will continue to do so, but I also commended the government for the good things done, such as its efforts in dealing with the Agrokor crisis," she said, adding that she would like communication between her and the government to be more intensive in the year ahead and that she wanted to contribute to the government's work.

Speaking of positive examples of her cooperation with the government, she cited demography, saying that after she presented her programme for demographic revival, she and the government held a session and agreed on joint action.

Grabar-Kitarović said that she believed that the programme was good and that her criticism of demographic trends was purposeful. "I am glad to hear about reports from other countries that the process of emigration from Croatia is beginning to slow down and we now must do our best to stabilise that process and work on conditions to encourage people not only to stay in the country but to return here," she said.

She also said that the situation regarding the Marrakesh Compact on Migration was not an ill-thought-out move but was probably due to lack of clear communication, adding that the issue of migration could be dealt with only by eliminating its causes in countries of origin – conflict, low living standards, inequality and lack of education. "That requires cooperation between countries, also within the EU, notably as regards illegal migration," she said, adding that immigration policy was an internal matter of every country.

"That is why I believed that it was good that the minister of the interior should attend the Marrakesh conference and that is what happened."

The president said that demography and the lack of a development strategy were burning problems. "People are the key to everything, without them the pension and health insurance systems will collapse and we will not have enough workers to raise living standards, create jobs and increase growth rates."

The president said that her priority in the year ahead would be to continue pointing to problems and giving proposals for possible solutions and to cooperate with everyone willing to cooperate.

Speaking of her term so far, she said that she considered it bad that ideological divisions and debates still existed. "I regret that, despite having promised myself not to do it, I yielded to pressure and entered ideological debates. My statements were frequently misinterpreted or put in a wrong context. On the other hand, it is good that I have managed... to considerably distance myself from ideology and put emphasis on citizens' real problems," she said.

She said that she did not consider herself the leader of the right because "the president can neither be right nor left, they must combine all policies that are important for the Croatian state and society. We are a welfare state and a market economy, a state of the Croatian people as well as of minorities and all the others that live here."

Grabar-Kitarović also said that changes in her office had nothing to do with her plans for a second term, but that rather she wanted to use the last year of her term to "contribute to positive ideas that are necessary for the society.... and continue the work on the international scene."

"The country's international rating has improved since last year, I have to continue working on that, I have met US President Donald Trump, Russian President Vladimir Putin and Russian Prime Minister Dmitry Medvedev. The whole world has heard about Croatia, we have to continue working on our branding but branding won't make sense if we do not change living conditions in Croatia," said the president.

More news on the Croatian president can be found in our Politics section.

ZAGREB, December 22, 2018 - Mate Radeljić, whom President Kolinda Grabar-Kitarović has relieved of his duties as domestic policy adviser, released a statement on his dismissal on Friday, saying he was threatened by the Security and Intelligence Agency (SOA) and that the president told him he did not fit her plans as he was an obstacle in her relations with the prime minister.

Radeljić said he wanted to inform the public about the circumstances that led to his dismissal and explain why he would not resign, adding that he was informed of the decision on his dismissal by Davor Franić, the chief of staff of SOA head Daniel Markić, in a Zagreb cafe on December 5.

Radeljić said Franić told him that Markić had instructed him to talk to him at the president's request, telling him that the president was renewing her office and that he would no longer serve as her adviser.

According to Radeljić, Franić said he had to let him know that the Security and Intelligence Agency "will protect the president in every way from my possible negative activity after leaving her office and that he was ready, if so instructed, to run into me with a car."

Radeljić said he immediately called the president and described what Franić had told him. "She was quiet for a few seconds and then said she didn't know what this was about and that she would immediately call... Markić."

Radeljić said Franić then told him they could wait to see if Markić would call him after the president called Markić, to see if he should "abort the mission." He said Markić did not call Franić and that they parted.

Radeljić went on to say that the president summoned him for a talk on December 10 and that she repeated what Franić had told him, "that she was renewing her office and I no longer fit into her plans because I was an obstacle in the relations with the prime minister."

Radeljić said he told the president that was her prerogative but that it was totally unfair that she informed him of her decision through a Security and Intelligence Agency staffer. He added the president said she had nothing to do with it and quoted her as saying that "Franić was stupid to meet me in a cafe."

Radeljić said he decided then that he would not resign because he would not accept the fact that his dismissal was announced to him by a senior intelligence officer and not the person who had appointed him.

Radeljić said the president was entitled to change her advisers as well as "her political direction" but that the way in which he was informed of her decision "doesn't do her honour."

More news on the Croatian president can be found in our Politics section.