Croatia: Not Even Two Cheers

Hooray, the Union is now 28! Surely Croatia’s accession should be the occasion for great rejoicing! Well, here at €S we go against the flow whenever possible, and in this case that is rather easy. Here’s TINA, in case you were never introduced to her by Margaret Thatcher:


Right: “there is no alternative.” Not the most cheery attitude to take, is it? Nonetheless, according to the Süddeutsche Zeitung’s Balkans correspondent Florian Hassel, that is the prevailing outlook behind all the ceremony – and for both sides.

For the Croats (George W. Bush would call them “Croatians”), polls now show only 45% supporting accession, as they reason that the new freedom to move wherever in the EU they want won’t really help against the much greater incoming economic competition they will face, which henceforth cannot be warded away by tariffs and other restrictions. Hassel: “In contrast to Europe of a decade ago, before the crisis, the EU is no longer a shining guarantee for personal and economic success.”

True, they can now look to pressure from Brussels to help drag the country into the 21st century economically and administratively – for example, there is widespread corruption, Croatian courts routinely take years to settle cases, etc. – but that is not likely to be painless. Similarly for the EU Hassel sees no alternative but to take in Croatia, help make it a success as a member state, and so go on from there to include the rest of the Balkan countries. It is a troubled region that cannot be allowed to fester.

Another German daily, Die Welt is scarcely more enthusiastic to see the Croats as new EU members.


Talk about a party-pooper: what else can you call it when the headline reads “Croatia is already the EU’s next problem-child” and the top of the article is dominated by a chart listing its current 4.0% government budget deficit? (Admittedly, that is placed next to another graph showing that its government debt as percentage of GDP, at 53.7%, compares quite favorably to the current EU average of 92.7%.)

For you must remember that that 4.0% is a no-no, it’s supposed to be no more than 3.0% (at least if you’re not one of the EU’s larger member states). That means, if things don’t improve rather shortly, officials from Ollie Rehn’s Economy & Finance Directorate General of the Commission will soon be paying a call. Yet it’s hard to see what the Croatian government can do about that. The economy has actually not grown for five years; unemployment stands at around 15%, and even then Croatia is known for its higher wage-costs in comparison with neighboring countries. Direct investment from outside the country has dried up. Indeed: “Croatia is after Greece the EU land that has been hit most hard by the [economic] crisis.”

That last quote comes from a private report on the Croatian economy, from the Roland Berger Strategic Consultancy, based in Munich, which Die Welt reporter Florian Ede managed to get his hands on. It’s fairly pessimistic, focusing particularly on the thickets of red tape that face anyone trying to take any business initiative in that country. And then there is the brain-drain, already ongoing for some years and sure to get worse as border barriers fall. The Berger report recalls how Croatia was ranked by the World Economic Forum at 126 world-wide, out of 144, when it came to being able to retain its young talent.

Still, Croatia is in. Congratulations. But it’s clear that the EU is now in a completely different world from that of May 2004 which saw ten countries gain membership under general jubilation. It’s a world that was foreshadowed somewhat in 2007 when Romania and Bulgaria were likewise ushered in, but with rather more suspicion and doubt than jubilation – suspicion (e.g. over whether they were really ready) which, let’s face it, has often been borne out since.

Now suspicion is full-bore – despite the tougher accession treatment the Croats reportedly received from the Commission to be able to join in the first place. As Florian Hassel wrote, the EU is no longer any “shining guarantee” for new members, and at the same time the overriding emotion among many of the old members towards accession is fear and worry of yet another Sorgenkind, another problem-child requiring costly assistance.

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