Leading a Successful Transition: The Case of Croatia

Abstract

An example of Croatia's successful transition is the completion of our preparations for NATO membership. Joining the Partnership for Peace programme was an earlier expression of the idea that Croatia belongs to the Euro-Atlantic community. It also marked Croatia's first formal participation in Western security structures. In 2002, Croatia became an official aspirant for NATO membership in the framework of the Membership Action Plan (MAP). After six MAP cycles, Croatia received an invitation to join NATO at the summit held on 2-4 April 2008 in Bucharest.

The fall of the Berlin Wall brought an unprecedented explosion of freedom that profoundly changed the political structure of Europe. The united aspirations for democracy tore down the Iron Curtain and paved the way for the restoration of individual as well as national rights. As a unifying concept, liberty became the guiding principle for countries in Central Europe, including Croatia, which sought to return to the family of Western democracies.

Tired of decades of communist oppression, Croatian citizens seized the opportunity of the first free elections in 1990 to change course and adopt a new political equation that could be represented as ‘democracy = independence + Europe’. The Croatian Democratic Union (HDZ) provided the political structure to implement such a popular mandate, and this continues to be the guiding formula in completing the transition process.

In the rest of Central Europe, the term ‘transition’ was primarily used in connection with the political changes in the former communist block countries and the reforms needed to successfully adopt a free market economy. In the case of Croatia, however, the first chapter in the transition process was subject to additional challenges. The country was confronted with Milošević's aggression, and the imperative necessity of protecting its newly regained freedom became the first priority.

Croatia was therefore simultaneously faced with gaining statehood, defending its territorial integrity, overcoming the consequences of war and embarking on a comprehensive process of political and economic transition. All these factors took a toll on the dynamics of Croatia's transition and integration into Euro-Atlantic structures. At the same time, Croatia's ability to overcome these difficulties strengthened the foundations of our democracy, as well as our European aspirations and trans-Atlantic commitment.

The foundations for a modern democratic state were laid with Croatia's new constitution, adopted in December 1990, which complied with standards of liberal Western democracies and created the preconditions for the development of a democratic society with a competitive market economy. The Constitution of 1990 was the first important step in Croatia's political transition. Yet it was only after the threat to independence was removed that the conditions were created to direct all our national potential towards structural reforms and integration into the EU and NATO.

Croatia's advanced position in the integration process has also had a significant impact on the stability of the neighbouring region. The countries of South-Eastern Europe needed a more clearly European perspective; in this respect, they did not differ from the Central European nations earlier in the 1990s. Eventually, a corresponding plan was adopted with the increased awareness of the challenges posed by the security situation in South-Eastern Europe. It was during the German presidency of the EU in 1999 that the Stabilisation and Association Process (SAP) was launched as the answer to these aspirations.

As a comprehensive new policy approach, the SAP indeed became a driving force. The EU offered the countries of South-Eastern Europe, under new conditions, a closer relationship and for the first time made their association with the EU realistic and achievable. Moreover, the SAP allowed the countries of the region themselves to dictate, through individual reforms and by extending to them ownership of the process, the pace of advancing towards the EU. Although this commitment was expressed rather tentatively at the beginning, it gained clarity at the decisive Thessaloniki Summit in June 2003, which confirmed that the future of the South-Eastern European countries would be in the EU. Croatia recognised the historical opportunity offered by that commitment. Once the framework for integration into the mainstream of Europe was defined, Croatia decided to make the most of it.

Joining the EU and supporting the neighbouring region

To present all of Croatia's important accomplishments since being extended the prospect of EU and NATO membership would not be possible on this occasion. Still, every step illustrates the tremendous changes the Croatian state and Croatian society have gone through. The most decisive achievements have been related to the implementation of strictly defined criteria in the step-by-step integration process. These range from negotiations on the Stabilisation and Association Agreement (SAA), the signing and implementation of the SAA, application for membership in the EU, to finally being granted official candidate status and the first step of membership negotiations with the EU. In regards to the other piece of the Euro-Atlantic puzzle, Croatia joined NATO's Partnership for Peace program, became an official aspirant and, after six MAP (Membership Action Plan) cycles, reached the needed level of interoperability to be invited into the Alliance.

A new set of conditions for advancing on the path of EU integration (which were not formally imposed on Central and Eastern European states, but became an integral part of the SAP) were grouped in a set of political criteria. These included the treatment of minorities, the rights of refugees to return, regional integration, cooperation with the International Criminal Tribunal for the former Yugoslavia and freedom of the media. With this new conditionality the EU demonstrated that it was taking into account the difficulties of the transition process as well as the specific ties between the countries of South-Eastern Europe. Moreover, it became clear that achieving membership in the EU is a two-way process—it is just as important for the EU to stay engaged as it is for the countries of the region to reform themselves.

Reconciliation has consistently been improving since Croatia's adoption of the Constitutional Law on the Protection of National Minorities and the exchange of State visits at the highest political level. An important step in the development of Croatian society regarding the integration of national minorities was made immediately after the parliamentary elections in November 2003, when all representatives of national minorities, including the representatives of the Serbian minority, participated in the coalition government. The involvement of representatives of all national minorities in the programme and work of the Croatian government was again established after the recent parliamentary elections.

Croatia's commitment to the principle of regional cooperation is substantiated through active participation in numerous regional political and economic initiatives. The EU-oriented policy the Croatian government has pursued in recent years has resulted in the awareness that a stable and prosperous Croatia is an engine for stability and prosperity in the neighbouring region.

It was very encouraging that this regional process has been supported by EU Member States and donor countries of the international community. Croatia relied on that assistance while leading and concluding the CEFTA (Central European Free Trade Agreement) enlargement negotiations, as well as during its chairmanship of the South East Europe Co-operation Process (2006-2007). The latter resulted in transferring ownership of the Stability Pact for South Eastern Europe to the countries of the region through the establishment of the Regional Co-operation Council (RCC). The Secretariat of the Council was located in Sarajevo, and former State Secretary in the Croatian Foreign Ministry, Hido Biščević, was elected as the RCC's first Secretary General.

These developments emphasise that, after years of engagement, Croatia wants to provide fresh impetus to regional cooperation through proactive policies. In addition to participating in such joint institutional projects, Croatia is committed to supporting the European prospects of all its neighbours and actively assisting them on their path towards the European Union. The European outlook is an important factor in the stabilisation and development of the region, and the Croatian example is in that sense a road sign for our neighbours.

While Croatia was occupied with responding to the EU's new conditionality, the context of world politics once again changed decisively. After 11 September (2001), the focus of the trans-Atlantic community shifted towards the Middle East, Iraq and Afghanistan and the struggle against terrorism and the proliferation of weapons of mass destruction. In addition, 10 new Member States joined the EU, which was once again consumed with its internal development after the negative referenda in France and the Netherlands on the Constitutional Treaty. Against this background Croatia formally started accession negotiations with the EU.

The benefits of reforms

Since the opening of negotiations Croatia has been making steady progress on its path to EU membership. However, it must be stressed that, compared with previous EU enlargements, the accession negotiations are now more complex and demanding. The overall atmosphere in which Croatia's accession negotiations are being conducted has changed, across both the political and technical spectra. On the political side, the negotiations are taking place in a different political atmosphere within the EU, dominated as it is by debates on institutional reforms, enlargement fatigue, the EU's integration capacity, the future borders of the EU and Europe's role in a globalised world. For these reasons the newly approved Lisbon Treaty can certainly facilitate Croatia's preparations for membership by resolving several outstanding issues within the EU itself and freeing up time and energy to once again engage strongly in the enlargement process.

Following these changes, the methodology and the approach to accession negotiations have become increasingly rigorous, more complex and demanding for both the EU and Croatia. This does not mean that previous negotiations were easy—far from it. However, it is evident that the EU per se is now more complex; its scope and its substance (i.e., the acquis communautaire) have evolved significantly over the years, as the following comparison illustrates. While Portugal and Spain had to negotiate about 40,000 pages of the acquis communautaire, mainly related to agricultural issues, the countries of Central and Eastern Europe dealt with 80,000 pages, covering a great number of new Community policies. Croatia is negotiating, roughly, more than 90,000 pages of the acquis communautaire. EU membership evidently now requires changes in an increased range of policies and the adjustment of many institutions, as well as significant levels of legal harmonisation and transposition (and, of course, their implementation). Furthermore, Croatia has not only to negotiate on a greater volume of legislation, but has to do so with an increased number of Member States. The more Member States the EU has, the greater the number of potentially different interests and suggestions that have to be taken into account, and the greater the amount of time that may be required to accomplish this.

What is more important is that the focus has been changed—it has shifted towards the mechanism of benchmarks. This mechanism can be a useful tool in guiding the process and proving the stability of achieved results. In the end, the fulfilled benchmarks will be the best proof of Croatia's credibility and readiness for membership, thus facilitating the ratification process of the Accession Treaty. At the same time, it is also important that benchmarks remain precise, measurable and, above all, unburdened with issues that are not part of the acquis.

In order to fulfil its obligations for membership, Croatia is strengthening its administrative capacities. So far, 26,000 pages of various documents have been produced for the purposes of accession negotiations. Given the massive workload and pressure, the negotiations are a huge test for the whole administration. Therefore, a specific approach has been applied to Croatia's negotiating structure by involving more than 2,000 people hailing from government and non-government sectors. The structure is designed so as to ensure transparency, quality, speed and didactic value.

An important source of strength for the accession process derives from the consensus in the Croatian Parliament among all political parties regarding Croatia's EU future. To this end, a specific body has been formed in Parliament: the National Committee for Monitoring Accession Negotiations. It is chaired by an opposition leader, thus underlining that this ‘Alliance for Europe’ is formed across political party lines. The National Committee closely observes the negotiating process and plays an active role in the process of adopting negotiating positions.

Successful negotiations would not be possible without the unwavering support and assistance Croatia receives from the Member States, the European Commission and the European Parliament, where the EPP plays a pivotal role. As the Prime Minister of Croatia, in my regular visits to Member States and EU institutions, I receive nothing but firm political support and encouragement at all levels. Many Member States have offered Croatia technical assistance in the accession negotiations. Croatia is grateful to them, as it is to the European Commission, whose assistance has been instrumental in the process so far. The political support of the European Parliament has also never been questioned.

Looking back at the period following the offer of prospective EU membership, it is more than evident that Croatia has made progress in multiple areas. It should also be noted that the accession process brings multiple benefits—political, economic and cultural—to both the acceding country and the EU itself.

Croatia has already experienced positive impacts in this regard. A look at macroeconomic indicators before and after the offer of EU membership proves this point. Over the past decade and a half, Croatia has reached a large degree of macroeconomic stability. Economic growth has averaged over 4% during this period. Since its introduction in May 1994, the Croatian currency, the kuna, has been stable, acting as an effective anchor against inflationary expectations. Additionally, due to our openness to investments in the banking sector, Croatia's financial sector has developed relatively quickly.

The opening of accession negotiations has acted as a catalyst for reform and has consequently created other favourable conditions that are conducive to securing macroeconomic stabilisation. It has brought stronger economic growth (GDP annual growth, 4.8%; GDP per capita, 8,000 euros), with growth rates likely to remain higher than in the old Member States. Inflation declined (3.2%), reflecting an overall clear orientation of monetary and exchange rate policies, and unemployment decreased to a record low of 10%. This trend continued in 2007, and even improved. For example, Foreign Direct Investment in the first quarter amounted to a record high of 1.2 billion euros, while GDP growth reached 7% in the first quarter and 6.6% in the second. Not only did the levels of FDI inflows hit record highs in 2006 (2.7 billion euros)—and 2007 looked even better—but they have doubled in relation to the year prior to the opening of negotiations.

As to future dynamics, Croatia's internally set date to achieve readiness for EU membership remains the same (2009), and Croatia is working according to the planned schedule in that regard. In 2008 Croatia will invest all its efforts in opening additional chapters and closing as many as possible. This is important primarily for maintaining a good tempo of internal reforms and legislative dynamics. We are confident that the negotiation process will proceed in an efficient and speedy manner and that Croatia's progress and achievements will be recognised and fully honoured in line with the principle of individualised approach to accession. This would also send an important signal to our citizens, whose overall perception and support of Croatia's EU accession is often formed according to the latest developments in the negotiation process.

Completing the transition

In addition to its achievements in the negotiations with the EU, Croatia's election as a nonpermanent member of the UN Security Council stands as another success in our continuing international efforts and aspirations. Being a UN Security Council member is a great honour and a source of pride, but also a great responsibility and challenge—for which we are ready.

Another example of Croatia's successful transition is the completion of our preparations for NATO membership. Joining the Partnership for Peace programme was already an expression of the idea that Croatia belongs to the Euro-Atlantic community. This also marked Croatia's first formal participation in Western security structures. Joining the Partnership for Peace program was already an expression of the idea that Croatia belongs to the Euro-Atlantic community. This also marked Croatia's first formal participation in Western security structures. In 2002, Croatia became an official Aspirant for NATO membership in the framework of the Membership Action Plan (MAP). After six MAP cycles, Croatia received an invitation to join NATO at the summit held on 2-4 April 2008 in Bucharest.

Since its independence, Croatia has achieved great progress, from gaining statehood, overcoming the consequences of war, embarking on a comprehensive process of political and economic transition, becoming a responsible and credible member of the international community, contributing to the activities aimed at preserving and building peace, to finally completing the preparations for NATO membership and entering an advanced phase of its accession negotiations with the EU.

Croatia's integration into Euro-Atlantic structures is not an end in itself. It is a complex project that we have undertaken with full awareness of its difficulties but also its benefits. Croatia remains convinced that seeking EU membership in particular represents the most effective and appropriate way of completing the process of transition to democracy. Such a reshaping of state and society cannot be achieved overnight, and it would be both illusory and frivolous to expect this. Yet the integration processes are a necessary catalyst for reforms aimed at consolidating Croatia's place in the family of Western democracies.

Europe is a continent of shared values and beliefs, and it is through the continuation of its integration that all its Member States will reap joint benefits and ensure that the negative experiences of the past are not repeated. Instead, we should all look towards the future work to jointly ensure Europe's citizens enjoy a life of continued stability, security and prosperity, remembering that this is our most important task.