As EU grows to 28, Croatia’s economy remains stagnant

Croatia EU flags.jpg

Croatia became the 28th member of the European Union today (1 July), a milestone capping the Adriatic republic's recovery from war but tinged with anxiety over its economy and the state of the bloc it joins.

EU flags fluttered from a stage in Zagreb's central square ahead of festivities on Sunday, but there have been few signs of the gushing welcome that marked past expansions to ex-communist nations.

Croatia joins the bloc just over two decades after declaring independence from federal Yugoslavia, the trigger for four years of war in which some 20,000 people died.

Facing a fifth year of recession and record unemployment of 21%, few Croatians are in the mood to party.

The EU is also deeply troubled by its own economic woes, which have created internal divisions and undermined public support for the union and its expansion.

"Just look what's happening in Greece and Spain! Is this where we're headed?" said pensioner Pavao Brkanovi?. "You need illusions to be joyful, but the illusions have long gone," he said at a Zagreb market.

President Ivo Josipovi? told Croatia's Nova TV on Saturday that journalists from EU countries had repeatedly asked him why Zagreb wanted to join the bloc.

"My counter question was: 'You come from the EU. Is your country preparing to leave the bloc?' They would invariably reply: 'Of course not.' Well, there you go, that's why we are joining, because we also believe the EU has a future," he said.

The country of 4.4 million people, blessed with a coastline that attracts 10 million tourists each year, is one of seven that emerged from the ashes of Yugoslavia during a decade of war in the 1990s.

Merkel no-show

Slovenia was first to join the EU, in 2004, but Serbia, Bosnia, Macedonia, Montenegro and Kosovo are still years away.

To get to this point, Croatia has gone through seven years of tortuous and often unpopular EU-guided reform.

It has handed over more than a dozen Croatian and Bosnian Croat military and political leaders charged with war crimes to the United Nations Tribunal for the former Yugoslavia in The Hague.

It has sold shipyards, steeped in history and tradition but deeply indebted, and launched a high-profile fight against corruption that saw former prime minister Ivo Sanader imprisoned.

The spirit of the occasion took another knock when German Chancellor Angela Merkel, the bloc's most powerful leader, pulled out of the accession ceremony, saying she was too busy.

Croatian media linked the move to a row over a former Croatian secret service operative wanted in Germany, though a spokesman for Merkel denied this.

Instead, Merkel urged Croatia to press on with reforms.

"There are many more steps to take, especially in the area of legal security and fighting corruption," she said in a weekly podcast.

For some Croatians the merits of accession were undeniable, despite the lukewarm mood.

"I know many people in Croatia are very sceptical but I think EU entry is the best thing that could have happened and it's an injustice we should have waited since 1990," said Željko Kaštelan, a businessman whose hotels employ 70 people.

"What we need to do now is work hard to make up for the lost time," he said. 

European Parliament President Martin Schulz made the following statement on the eve of Croatia's accession to the European Union.

"I am delighted to welcome Croatia to the European Union on 1 July 2013. I am travelling to Zagreb to celebrate this happy and historic event. It is good news when a family grows, especially our family of values, committed to democracy, justice and the rule of law.

“It is historic day for the EU and Croatia. Europe is taking another important step towards reunification, and Croatia opens a new chapter in its history.

“We live in difficult times. Recession is hitting hard Croatia and many other European countries. EU membership will offer no magic solution to the crisis. But it will help to lift many people out of poverty and modernise the economy. Croatia will receive funds to build roads, clean up the environment and increase research and development.

“Since its foundation the European Union has been a promise of peace. For the Western Balkans, a region that only some years ago was torn apart and devastated by war, Europe has become a magnet of peace and change. Croatia has become a pioneer,” Schulz stated.

“Welcome to Croatia, the EU’s 28th member state! We look forward to having you by our side as we head into our common future,” stated Joseph Daul, chairman of the European Peoples’ Party Group in the European Parliament on the occasion of Croatian entry into the European Union.

“It has been a long and sometimes difficult road, but the result is very well deserved. Croatia takes its rightful place among its European partners. I am very happy to see this happen because it is a reminder of why the EU was created in the first place, as a project of peace. Coming from Alsace that argument is for me still very much valid. I have seen what the European Union has done for my region, and I know what it can do for your country,” said Daul.

Croatia signed its accession treaty on 9 December 2011 in a surrealistic atmosphere of uncertainty over the fate of the European Union, which was in the midst of an unprecedented economic and financial crisis.

But as German Chancellor Angela Merkel said, the event showed that even under the difficult circumstances, the EU had lost "none of its attractiveness".

On 22 January 2012, two-thirds of Croatians voted in favour of joining the European Union in a referendum.

On 14 April 2013, Croatians held their first European election, sending 12 MEPs to the European parliament. The low turnout of 20.7% was explained by voters' perception that the election was "unimportant", analysts said.

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