beyondbrics

Croatia’s centre-left Kukuriku coalition has won a convincing victory in elections held on Sunday, obtaining 80 out of 151 seats in parliament, according to unofficial estimates with the votes nearly counted.

By forming a pact to run together first, and then capturing a majority in parliament, the four parties that make up the coalition have hopefully avoided the need for long negotiations over cabinet posts before forming a government. But the truly difficult job – turning the sluggish economy around – has yet to start. Kukuriki – the word means “Cock-a-doodle-doo” or “Wake up!” – chose its name well.

As Fitch Ratings in London noted immediately, the prime minister-designate, Zoran Milanovic, leader of the Social Democrats (the largest party in Kukuriku) will have to make “unpopular” spending cuts.

That may be one reason Milanovic and his allies opened the door – while still campaigning – to holding talks with the International Monetary Fund for soft loans to spur a recovery.

While the IMF seeks ever-stricter fiscal discipline as a condition for releasing each tranche of money, it also provides populist-minded politicians with the cover they need (“the IMF made me do it”) to enact painful budget cuts.

The ousted centre-right government under Jadranka Kosor, prime minister since 2009, had avoided accepting IMF loans, saying Croatia’s economy was healthy enough without them. By taking 48 seats and second place, well ahead of other parties, the HDZ has laid the groundwork to come back again in the future.

Apart from the IMF and some ideas about sales tax, there is little to clearly differentiate between the departing Kosor government and the Milanovic one that will follow.

Opinion polls also show a majority of Croatian supporting fiscal austerity to avoid replicating an Italian or Greek-style debt crisis. That, of course, is easy until the axe starts swinging.

Regardless, many voters seemed to want the HDZ’s defeat rather than Kukuriku’s victory. Kosor paid the price for rising unemployment and the exposure of deep corruption within her party (albeit before she took over).

Still, she led Croatia through the final stretch of accession talks with the European Union. The country of nearly 4.5m people, which gained overwhelming approval from the European Parliament earlier this month, is to join as the bloc’s 28th member state in July 2013.

Neighbouring Slovenia – the only former Yugoslav country already in the EU (since 2004) and first ex-communist state to formally join the eurozone (2007) – also held parliamentary elections on December 4 and swept out Borut Pahor, a centre-left PM whose government took flak for deeper-rooted economic woes.

More of a surprise though, is that conservative ex-PM Janez Jansa also lost. The most voters in Slovenia chose Zoran Jankovic – mayor of the capital, Ljubljana, and highly successful former CEO of Mercator, the national supermarket chain – to try to steer the small market out of recession.

Several older EU countries – Portugal, Ireland, Italy, Greece – have also recently bid farewell to prime ministers perceived as responsible, at least partly, for the larger-than-life drama in the eurozone.

Croatia, having just ousted its incumbent PM over what amounts to eurozone fallout, should fit in very nicely as the next EU member state.

Related reading:
Croatia: corruption trial overshadows EU accession, beyondbrics
Guest post: Slovenia’s post-election challenge, beyondbrics