Croatia: 2003 Elections and New Government

CRS Report for Congress
Received through the CRS W eb
Croatia: 2003 Elections and New Government
JulieKim
Specialist i n International Relations
Foreign Affairs, Defense, and T r ade Division
Summary
In parliamentary elections held on November 23, 2003, the C roatian Democratic
Union (HDZ), a right-wing party of the l at e former wartime Pres ident Franjo Tudjman,
won a plurality of the vote. The HDZ had dominated Croatia’s political scene from 1990
until its defeat in the 2000 elections. Ivo Sanader, w h o s u c c eeded Tudjman as HDZ
party l eader and refashioned t he party along more moderate, l es s natio n a l i stic lines ,
b ecam e P rime Minister of a minority government in December 2003. The S an ad er
governm ent wi l l l i k el y face si gn i fi cant dom est i c chal l enges as wel l as cl ose international
s c rutiny over its performance in a number of i ssue areas. This report analyz es t h e
elections and k ey issues facing the n ew governme n t . It will not be updated. Fo r
additional i nformation, see also CRS Report R L32136, Future of the Balkans and U.S.
PolicyConcerns.
Introduction
The November 2003 elections were Croatia’s f ourth parliamentary contest s ince the
country became i ndependent in 1991. In the l a s t v o t e o f J anuary 2000, a coalition o f
cent e r-left p arties s oundly d efeated the i ncumbent Croatian Democratic Union (HDZ)
governm ent , w eeks aft er t h e d eat h o f Franj o T udjman, the l ongstanding leader of the HDZ
and P resident of the country.
To supporters, T udjman represented the fat her o f C roatian i ndependence. To critics,
however, Tudjman closely resembled nationalist Serb leader Slobodan M ilosevic and
demonstrated similar t erritorial design s o n n eighboring Bosnia. In 1995, Croatia launched
two military operations, “Fl as h” and “Storm , ” t o regai n control over t he Krajina, Croat
territory held by rebel S erbs after 1991. The attacks d rove out mu c h of the l ocal Serb
population from C roatia and tipped t he balance o f forces in Bo snia against M ilosevic and
the Bosnian S erbs. Tudjman was a s ignatory to and guarantor of the 1995 Dayt on peace
agreement t hat ended t he war i n Bosnia. Ho wever, he and o ther HDZ leaders came under
frequent international criticism for nationalist policies, authoritarian leadership, and overt
support for ethnic C roat separatists in Bosnia. Domestically, t he HDZ’s p opularity
eventually declined as the economy d eterio rated and as HDZ offici als b ecame t ainted by
corruption s candals. The 2000 parliamentary and presidential votes brought in a n ew set

Congressional Research Service ˜ The Library of Congress

of l eaders. Iv i ca R acan of t h e S oci al D em ocrat i c P art y (S D P ) becam e P ri m e Mi ni st er and
S t i p e M esi c of t h e C roat i an P eopl e’s P art y (HNS ) b ecam e P resi dent t h at year.
The R acan government swiftly took m e a s ures to reform the economy and repair
Croatia’s damaged relatio n s w i t h its neighbors and with the international community.
Above all, improv i ng the country’s international s tanding and p rospects for EU and
NATO i ntegration b ecame a focal point for t he Racan government. S ince 2000, Croatia
has j oi ned NATO’s P art n ershi p for P eace (P FP ) p rogram and M em bershi p A ct i o n P l an
(MAP). It has concluded a Stabilization and Associ ation Agreem ent with the European
Union (EU) and formally applied for EU membership. It al s o j o i n e d t he World Trade
Organiz ation (W TO) in 2003. The R acan government sought a s econd ma n d a t e in the

2003 elections that would enable i t t o fulfill these goals, possibly i n its nex t t e rm.

Economic reforms as w e l l a s i nternational s upport yielded steady growth and other
positive i ndicators in 2001 and 2002; however, C roat i a’s ex t ernal debt and unem p l o ym ent
levels remained high . C o r r u p t i o n s candals also plagued t he government, t hough not at
the l evel of the Tudjman era, and it failed t o deliver major prosecution victories from its
anti-crime rhet oric.¹
ElectionPreview
The o fficial 2003 campaign p eriod ran for t hree weeks, from November 5 until the
23^rd. P re-election polls predicted a cl ose race between the S DP-led coalition parties and
the HDZ. S ince its fall from power in 2000, the HDZ has attempted a radical overhaul
and re-i nven t i o n o f i t s i m age and p l at form . HDZ l eader Iv o S anader em phasi z ed t he
party’s n ew moderate, p ro-European outl ook, economic reform and t ax cutting p lans, and
support from p rominent and mainstream Eur opean conservatives. During t he campaign,
Sanader reversed t he p arty’s l ongstandi ng opposition t o t he In ternational C riminal
Tribunal for the former Yugoslavia (IC TY) and pledged full cooperation with the court
in princi ple. Sanader also called for the ret urn t o C roatia of ethnic S erb refugees uprooted
since t he 1995 conflict.
On behal f of t h e governm ent , P ri m e Mi ni st er R acan present ed h i s cabi n et as t h e b est
means t o guarantee the country’s path toward EU membership, a go al shared by a l arge
majority of the populat i o n . However, the coalition p arties opted to compete s eparately
and i n an uncoord i n a t e d f ashion, thus dividing al l egi ances of t h e cent er-l eft el ect orat e.
The l arge number o f s mall center-left p arties also d iluted s upport for t h e l a r ger p arties.
A p rom i n ent cam pai gn i ssue w as t h e case o f former C roat General Ante Gotovina,
who h as been indicted by the ICTY for war cr imes related to the 1995 offensive against
form erl y S erb-hel d a r e a s i n C roat i a. T he R acan governm ent pl edged t o h and h i m over
to The Hague, but cl aimed not to be able to locat e him after he went i nto hiding i n mid-
2001. Despite mounting i nternational p ressure, t he former Croat gene r a l r e m a ins a
popular figu re in Croatia, especially among the population’s right-wing, who view him
as a n ational h e r o a n d a s ym bol of Croatia’s righ t t o s elf-defense. S trong support for
Gotovina am ong HDZ followers and l ocal politicians was evident at some HDZ rallies.²

¹ “Slouching toward respectability,” Transitions Online journal (Prague ), Nove mber 18-24, 2003.
² Anna McT aggart, “‘Reformed’ HDZ set t o r etake power,” In s t i t ute f or War and Peace
(continued...)

Croatia’s el e c t o r a l system is based o n p r oportional representation. The country is
divided i nto t en electoral di stricts, plus one constituency each for ethnic minorities and
the ex patriate community (mainly i n neighboring Bosnia).
ElectionResults
The Organiz ation for Security and C ooperation i n Europe (OSCE) assessed t hat t he
November 23 elections were conducted “generally in line” with intern ational s tandards
for d emocratic elections. The organiz ation s ai d t hat i m p rovem ent s w ere n eeded i n
el ect i o n l egi s l at i o n and vot i n g access for refugees.³ Turnout was 69% for t he 10 electoral
districts i n C roatia. The total t urnout dropped t o 60% because of lower t urnout among the
ex patriate community and ethnic minorities (each counting as s eparate d istricts).
Novemb er 2003 Elections Results
P arty % of vote Seats in parliament
^Cr^o^a^tian^D^em^o^c^r^a^tic^Co^m^m^uⁿ^ity
^(H^D^Z⁾^43.42⁶⁶
^*^S^o^c^ial^D^em^o^c^r^a^tic^P^a^r^t^y⁽^SDP⁾^-^l^ed
^co^alitioⁿ^,ⁱⁿ^cl.^*^Lⁱ^b^r^a^aⁿ^d^*^L^ib^er^als²⁸^.²⁹⁴³
^*^C^r^o^atian^P^eo^p^l^e’^s^P^ar^ty⁽^HNS)^-^led
^co^alitioⁿ⁰⁷^.²⁴¹¹
^*^C^roatian^P^eas^an^t^P^arty^(HSS)^05.29⁹
^Cr^o^a^tian^P^ar^ty^o^f^Rig^h^t^s
^(HS^P^)/^Z^a^g^o^rj^e^D^em^ocratⁱ^c^P^a^rt^y^05.26⁸
^Cr^o^a^tian^S^o^c^ial^L^ib^er^al^P^a^r^t^y
^(H^S^L^S⁾^/^D^em^ocratⁱ^c^C^eⁿ^t^er^(D^C⁾^01.97³
^C^r^oatⁱ^aⁿ^P^en^sⁱ^on^ers^P^art^y^(H^S^U⁾^01.97³
^C^r^oatian^D^em^ocratic^P^eas^an^t^P^arty
^(H^D^S^S⁾^00.66¹
^Natioⁿ^a^l^Mⁱⁿ^o^r^ities⁰⁵^.²⁶⁸⁽³^S^er^b⁾
^*^m^e^m^be^rs^of^f^o^rm^e^r^g^o^v^e^rning^c^oa^lition^to^tal:¹⁵²
The HDZ ended up with a p lurality of the vote and 66 seats in parliament – still
several v o t es short of a majority. All four diaspora s eats went t o t he HDZ. The Social
Democrats came i n s econd, but combined with their four previous coalition p artners also
cam e up s hort of a majority.
Initial analyses of t he el ection res ults proclaimed C roatia’s shift t o t he right, and t he
dramatic gain in support for the HDZ alone appears t o s upport t his claim. However, many

² (...continued)
Reporting, Balkan Cr isis Report No. 469, Nove mb er 20, 2003.
³ OSCE press r elease, Nove mber 24, 2003.

observers bel i eve t h at t h e ri ght ward shi ft resul t ed m ore from t he el ect orat e’s generi c
desire for change and a s ense of frustration with the disparate incumbent l eaders t han
from nost al gi a for t he probl em at i c Tudj m an era. T he R acan governm ent ’s st rat egi c goal s
for C roatia – i ncluding full integration i nto Euro-Atlantic instituti o n s – continue to be
highly popular in Croatia, and Sanader closely echoed t hese go als i n t he HDZ platform.
Moreove r , the m argi n o f d ifference i n voter support b etween the right and l eft remains
small, with the l eft hurt considerably by its own i nfighting and fragm entation.
NewGovernment
Aft er t he vot e, t h e HDZ reached out t o ot her p art i es t o t ry t o form a m a j ori t y
coalition. Top partner prospect s appeared to be the P eas ant P arty (HSS), par t of t he
outgoing coalition, and t he right-wing Party of R ights (HSP). S ome P eas ant P arty leaders
appeared to favor a coalition, but the party as a w h o l e d i d not approve such a m ove.
European Union representatives ex presse d s trong opposition t o t he possible i nclusion of
t h e HS P i n C roat i a’s governm ent because of t h e p art y’s ex t rem e n at i onal i s t i c reput at i on.
HS P l eaders, w h o i nsi s t t hat t hei r part y h as reform ed, h ave s ai d t hey w oul d rem ai n i n
oppos i tion. Instead the HDZ resort ed to soliciting support from various smal l parties
incl uding the S ocial Liberal/Dem ocratic Center (HSLS/DC) coalition and the P ensioners
party. The HDZ also gained support from a handful of national minority deputies,
including the S erb Democratic Independent Party (SDSS).
In December, P rime Minister-designate S anader announced that he had s ecured
enough votes to support a minority government. On Decem ber 23, he present ed t o
parliament his cabinet and outlined the government’s policy priorities, mainly relating t o
econo m i c reforms. S anader’s lack of suffici ent coalition partners t o s ecure a s table
parliamentary m ajority will leave t he HDZ-led government dependent on its cooperation
agreements with parties outside of government.
KeyIssues
The return o f t he HDZ to power after t he 2003 elections has p r o m p ted s ome
speculation about the S anader government’s po ssible areas of continuity or change from
the l as t government. HDZ leaders wish t o distinguish t he party from, rather than harken,
its legacy in government in the 1990s. P rime Minister Sanader h as repeatedly tried t o
convey t he party’s t rans formation i nto a moderate conservative movement that is pro-
European and rejects “radicalism, ex tre mism, x enophobia, and n ationalism.” The ex tent
of the HD Z’ s t r ansformation m ay become evident i n t he government’s approach to
numerous key i ssues.
^! Govern ment Stability
The HDZ’s inability to forge a majority coalition will make for an i nherently
unstable government. The Sanader government may h ave t o gr a nt concessions on a
regular bas is in ex change for parliamen t ary s u p port from s mall parties and individual
deputies. Even minor setbacks i n parliament could l ead to the government’s fall.
Maintaining unity within the HDZ could represent another challenge, es peci ally if some
party m embers do not approve of their l eadership’s outlook and d irection.

The HDZ’s weak standing may negativel y affect the government’s ability to pursue
its policy agenda. C roatia’s overarching goal s of NATO and es peci ally EU membership
will require adherence t o reform policies consistent with European standards. Observers
bel i eve t h at an HDZ-l ed governm ent can onl y reach i t s st rat egi c obj ect i v es by cont i nui ng
the p ath-b r e a k i n g work o f t he previous government. However, t he HDZ’s dependence
on a v ariety of small p arti e s c o u l d l e a d to unpredictable policies. A first test for t he
Sanader government is likely t o b e t he budget , s ince planned s pending and t ax cuts may
have to be sacrificed for concessions to other parties on costly items such as pensions.
^! Progress T ow ard E U I n tegrati on (i n cl u d i n g ICT Y an d ref u g ee
returnissues)
Fo remost am ong the government’s priorities i s s ecu ring Croatia’s path toward EU
membership. C roatia has s et 2007 as a t arget d ate for EU entry, modeled after the d ate s et
by t h e E U f o r t h e accessi on of R o m ani a and Bul gari a (bot h o f whi ch have hel d l onger
associ ation rel ations with the EU). C ro at i a signed a S tabilization and Associ ation
Agreement (SAA) with the European Union i n J uly 2001 (the SAA h as yet t o b e ratified
by all EU m ember s tates). C roatia formally applied for EU membership in February 2003
and s ubmitted its responses to a l engt hy European Commission questionnaire i n October.
The C ommission is ex pected to gi ve its “Opinion” on Croatia’s candidacy by mid-2004,
which m ay open t he door for t he Council to start accession nego tiations. At a meeting o f
EU Foreign M inisters with t h e i r western Balkan counterparts i n December 2003, EU
ministers urged t he incoming C roatian government to make al l efforts t oward compliance
with EU political and economic conditions for m embership. In particular, t he EU
ministers cited full coopera tion with the ICTY, the return o f refugees to Croatia , a nd
minority righ ts as key p erformance benchmarks.
Cooperation with the International C riminal Tribunal for the former Yugoslavia
(ICTY) remains a difficult issue for the HDZ. Despite Sanader’ s p l e d g es to uphold
Croatia’s international commitments, the war crimes t ri bunal remains unp opular in
Croatia, especially among HDZ supporters. The specific case o f former General Gotovina
is yet t o b e resolved. Moreover, new i ndictment s are ex pect ed t o be del i v ered t o Zagreb
in early 2004, likely against current or former HDZ members. The situation regarding
refugee returns is also problematic. According t o t he U.N. High Commissioner for
Refugees, about 100,000 of 280,000 ethnic S erbs who fled during t h e 1995 Croatian
offensive h ave returned t o C r o a t i a . D uring t he election campaign, Sanader s aid t hat h e
favored refugee returns, without outlining any specific p lans. The refugee i ssue i s
complicated by property rights i ssues, t he stat us of Bo snian C roat tenants i n former S erb
homes, and implementation of minority ri gh ts. In return for Serb party s upport i n
parliament, S anader pledged t o accelerate p roperty restitution and housing construction
for returning refugees.
^! Regional Relations
The new Croatian government will face many challenges relating t o regional affairs,
especially gi ven t he HDZ’s legacy in neighborly relations. The Racan government and
President M esic had m ade a concerted effo rt to end d irect Croatian i nvolvement in
Bo snia’s intern al affairs and improve bilateral relations. During t he 1990s, t he late former
President Tudjman had maintained poli t i cal an d financi al ties t o t he separatist Bosnian
Croat community, which hindered t he devel opm ent o f an i nt egrat ed Bosni an st at e. The

current HDZ’s relationship with its sister party i n Bosnia (HDZ-BiH) – still the s tronges t
part y am ong t h e Bosni an C roat el ect orat e – m ay h ave m ore com pl i cat ed facet s. On t h e
one hand, HDZ l eaders h ave r e p e a t edl y pl edged t o respect Bo snia’s sovereignty and
independence, and t he Croat electorate gen erally favors t his policy. On the o ther hand,
all o f t he diaspora votes from Bosnia went t o t he HDZ, d emonstrating t he Bo snian C roat
community’s strong political support for the HDZ, which the HDZ may not wish to risk
weakening. Meanwhile, t he HDZ in Bosnia may itsel f be ripe for a t ransformation and
image makeover s imilar t o S anader’s efforts with the HDZ in Croatia.
Political relations with Serbia appeared to improve in 2003. Making his first official
visit t o S erbia i n S eptember, P resident Mesic received a public apology from S erbia and
Montenegro Pres ident S vetovar M arovic for “al l evils” committed against Croatia in the
past. Mesic reci procat ed with an apology for past “p ai n o r dam age” committed by
C r o a tia. To some observers, t he symbolic gestures marked the possibility for great er
reconciliation b etween the t wo countries, i nc luding closer economic ties and cooperation
on refugee returns.
In 2003, the R acan government sparked a dispute with neighboring S l o v e nia b y
decl aring an ex clusive economic zone in the Adriatic Sea. Slovenia h as strongly objected
t o C roat i a’s cl ai m and i t s pot ent i al i m p act on S l oveni a’s access t o t he open s eas. S om e
S l ovene l eaders h ave t hreat ened t o bl ock C roat i a’s EU aspi rat i o n s i f t h i s i ssue i s not
resolved, once S lovenia j oins the EU i n 2004.
The p revious Croatian govern ment promoted closer regi onal ties i n t he security
arena. At the P ragu e NATO s ummit in November 2002, the P residents o f Albania,
Cr o a tia, and Macedonia p roposed to President Bush t he creation o f a U.S. - Adriatic
Charter, model e d a f t er the U.S. - Baltic Charter (established i n 1998). The Adriatic
Charter i nitiative aims to deepen regi onal cooperation, promote reforms, and improve the
collective i ntegration p rospects o f t he thre e countries. S ecretary o f S tate Powell and t he
foreign ministers of the t hree countries si gn ed the C harter on May 2 , 2003, in Albania.
U.S.Relations
In 2000, the C linton Administration warmly welcomed the electoral victory o f t he
center-left coalition and subsequently praised the reform efforts o f t he Racan government.
The United S tates continues t o s upport C roa tia’s t r ansition from communism and t he
effect s of ethn i c war, as wel l as its goal s for full integration i nto Euro-Atlantic
institutions. At t he same time, t he United S tates s upports NATO and EU conditionality
policies on m eeting m em bership s tandards, incl uding building dem ocracy, implementing
human righ ts policies, respecting t he Dayt on agreement, and cooperating with the war
crimes t ribunal. The Bush Administration h as design ated over $30 million i n S EED Act
and s ecurity assistance to Croatia for FY2004. However, bilateral s ecurity assistance to
Croatia has b een suspended s ince J u ly 2003, wh en U.S. sanctions came i nto force against
cert ai n count ri es whi ch h ad not agreed t o ex em pt U.S. personnel fro m pos s i bl e ex t radition
to the International C riminal Court (ICC). The Bush Administration continues t o s eek to
conclude bilateral agreements with all ICC party countries, i ncluding Croatia, t hat would
provide for s uch an ex emption.