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01/10/2016

Graft case shakes up Croatian government

Elections

Graft case shakes up Croatian government

Tomislav Karamarko [Wikimedia]

Croatia’s main opposition party, the Social Democrats, sought on Wednesday (18 May) a confidence vote against powerful Deputy Prime Minister Tomislav Karamarko over an alleged conflict of interest, as a national watchdog opened a probe into the affair.

The vote in parliament, due to take place within a month, threatens to seriously challenge the ruling coalition in which Karamarko’s HDZ party (EPP-affiliated) is the main force.

The fragile right-wing coalition has a thin parliamentary majority and its work has been marred by constant internal wrangling over reform moves ever since it took power in January.

Croatian government sworn in two months after inconclusive election

Croatia’s parliament late Friday (22 January) approved a new centre-right government led by a political novice, who warned that “difficult decisions” lie ahead as the EU’s newest member struggles with meagre economic growth and an influx of refugees.

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The coalition was further shaken earlier this month after a local weekly published a contract showing that a lobbyist for Hungary’s oil group MOL, which is in a bitter dispute with Croatia over its local peer INA, was paying Karamarko’s wife for consulting services.

According to the report, she was paid some €60,000 between 2013 and 2015.

“This is unacceptable,” SDP leader and ex-Premier Zoran Milanović said in Wednesday, announcing the filing of the confidence motion.

Milanović had earlier warned about Karamarko’s “political responsiblity” in the case and estimated he had put “MOL’s interest ahead of the state one.”

Karamarko has denied any wrongdoing and asked the national commission ruling on conflicts of interest to review the case.

That body, which can fine officials found to have a conflict of interest, on Wednesday launched a probe into the case.

If a no confidence vote against Karamarko passes, the government is likely to fall as he is considered its key figure.

But for such an outcome SDP would also need the support of HDZ’s junior partner Most party.

The Croatian government holds a 44.8% stake in national oil group INA, and MOL a 49% interest. The two shareholders, engaged in arbitration proceedings, have long fought over how the company is managed.

While the Most party wants the arbitration proceedings to continue HDZ has called for Croatia to quit and launch negotiations with MOL.

Croatia’s economy has recently begun to recover posting 1.6% growth in 2015 after six years of recession.

Early elections would delay implementation of badly needed reforms in the European Union’s newest member whose economy remains one of the 28-nation bloc’s weakest.