Croatia again on target for the EU

The governments of both countries have agreed to resort to international arbitration for settling the border issue. This agreement has already been approved by both parliaments. Slovenia has withdrawn its veto on EU-accession talks with Croatia, thus lifting its 10-month blockade.

Since Yugoslavia’s collapse 18 yeas ago both states have been quarrelling over the common borderline. Again and again the conflict grew worse because of various incidents. In December 2008 the conflict escalated, because Slovenia vetoed EU-accession talks with Croatia. Slovenia accused its neighbour of having presented documents in the accession talks which would prejudice the course of the borderline. This threatened to delay Croatia’s intended EU-accession.

The focus of the border issue lies on the maritime border between the two states. It depends on the exact course of the border in the bay of Piran whether Slovenia has free access to international waters. After the compromise which has now been achieved – Croatia withdrew the controversial documents and Slovenia acceded to arbitration proceedings – accession talks were taken up again. According to the chairing country Sweden all negotiation chapters will be opened till the end of the year.

EU-representatives expect that Croatia might be able to terminate accession talks next year. The EU-Commission’s report, which was presented in October 2009, attests the candidate country significant progress. In certain fields, however, the schedule could not be kept – among them the negotiation chapters ”justice and basic rights” and ”competition”.

The Austrian Member of the European Parliament Hannes Swoboda explained that after the bilateral quantum leap Croatia’s EU-accession could be realized ”in 2012 at the earliest”. The EU-Parliament has again appointed him to report on Croatia. The Austrian also warns that not all of Croatia’s problems have been solved by Slovenia lifting its veto.

Still Croatian companies are frequently protected from international competition by judiciary help. Corresponding complaints would also be presented by Austrian companies active in Croatia. ”Laws are partly interpreted at random.”

One driving force for solving the conflict between the two states seems to have been the international economic crisis, badly hitting both national economies. According to recent forecasts by the National Slovenian Institute for Macro-economic Analysis and Development (UMAR) the Slovenian economy will decrease by 7,3 per cent this year. For 2010 a growth rate of 0,9 per cent is expected.

The reason for the bleak economic prospects is the global economic crisis, which has extremely badly hit some of the important trading partners of the export-oriented Slovenian economy. Additionally Slovenian enterprises are strongly interdependent. ”Now they have to pay for this”, Vladimir Preveden, Roland Berger’s expert for South-eastern Europe commented.

But also Croatia has to fight the effects of the international economic decline. The government tries everything to be able to steer its own monetary and economic course. Croatia mainly struggles to avoid a credit agreement with the International Monetary Fund (IMF), which would impose far-reaching conditions on economic policies.

Therefore the country raised USD 1,5 billion ((EUR 1 billion) in the USA by means of a government bond. The head of the central bank, Zeljko Rohatinski, put forward that, just in 2010, Croatia would have to repay debts of EUR 10 billion. In the recent forecast Die Erste Group expects the country’s GDP to decline by 5,5 per cent in 2009.