Nations in Transit - Croatia (2006)

Capital: Zagreb
Population: 4,400,000
Status: Free
PPP: $5,370
Private Sector as % of GNI: na
Life Expectancy: 75
Religious Groups: Roman Catholic (87.8 percent), Orthodox (4.4 percent), Muslim (1.3 percent), Protestant (0.3 percent), other and unknown (6.2 percent)
Ethnic Groups: Croat (89.6 percent), Serb (4.5 percent), Bosniak (0.5 percent), Hungarian (0.4 percent), Slovene (0.3 percent), Czech (0.2 percent), Roma (0.2 percent), Albanian (0.1 percent), Montenegrin (0.1percent), other (4.1 percent)

Executive Summary

Croatia's movement toward a democratic society with stable and independent state institutions is an ongoing transformation unfolding under specific conditions. Along with a change of regime and typical transitional problems – such as highly bureaucratized state institutions, an inefficient legal system, a lack of social security, and high unemployment – Croatia experienced a war for independence from 1991 to 1995. Throughout the 1990s, political power was centralized in the hands of former president Franjo Tudjman and his party, the Croatian Democratic Union (HDZ). Despite a declarative multiparty system and regular elections that the Organization for Security and Cooperation in Europe (OSCE) deemed "free but not fair," political and social life was charged with a strong current of nationalism. Tudjman ruled by extra-constitutional methods and institutions throughout the decade. Numerous accusations of a lack of respect for human liberties and rights during his rule saw Croatia isolated and outside the scope of European integration processes.

The turnaround year was 2000, when, following Tudjman's death, the doors were opened to political change. In January 2000, Croatia got its first coalition government, led by the center-left Social Democratic Party (SDP), which resolutely announced it would deal with the failings of the HDZ regime that preceded it. A month later, Stjepan Mesic took office as president, and his powers were significantly reduced by subsequent constitutional amendments. The semipresidential system of government was replaced by the parliamentary system. Just a few months later, in the spring of 2001, the House of Counties was dissolved, making the Croatian Parliament a unicameral body. The new Croatian leadership immediately showed determination to entrench democratic values and made progress on the main outstanding political questions, particularly minority rights and securing an adequate legal and organizational framework for independent media. Membership in the European Union (EU) has been declared a strategic goal, with Brussels rewarding implemented reforms by signing a Stabilization and Association Agreement with Croatia's government in the capital city of Zagreb in 2001.

The HDZ government, which after a close contest in the 2003 parliamentary elections defeated the SDP-ruling coalition, has continued to follow the European agenda. In regaining power, the HDZ won the support of the Croatian Social-Liberal Party, the Democratic Center, the Croatian Pensioners Party (HSU), and national minority representatives (including Serbs, for the first time since 1990). Prime Minister Ivo Sanader made it clear that the HDZ has embraced a new political profile and transformed itself into a modern European conservative party. Sanader also declared that the government was determined to cooperate fully with The Hague-based International Criminal Tribunal for the Former Yugoslavia (ICTY), thus clearly distancing himself from the right-wing nationalist discourse and breaking away from the HDZ's past image as a war crimes instigator and primary protector of war criminals.

Meeting all obligations in cooperation with the ICTY was a prerequisite to starting negotiations for Croatia's EU membership. The government's failure to locate and arrest General Ante Gotovina – who had been declared one of The Hague's most wanted fugitives, along with Ratko Mladic and Radovan Karadzic – prompted the EU to delay membership talks with Croatia in March 2005. A green light for the start of talks came finally in October 2005, after The Hague's chief prosecutor Carla del Ponte informed European ministers she was satisfied with the cooperation from Croatia. Negotiations were launched just hours after those with Turkey began, in an apparent quid pro quo deal after Austria agreed to back off from its opposition to full membership for a large Muslim country (Turkey) in exchange for progress for neighboring Croatia. In December 2005, Gotovina was finally located and arrested in the Canary Islands.

Early reports from the negotiations show that Croatia's government is well prepared and will probably be able to complete accession talks in a relatively short period, in order to meet economic and political criteria until 2009. However, whether Croatia will indeed be invited to join the EU by that time remains uncertain owing to developments in the EU, especially the failure to adopt the European Constitution and enlargement fatigue.

National Democratic Governance. Croatia has a parliamentary system of government and stable democratic institutions that function properly, respecting the limits of their competences and cooperating with one another. Owing to progress achieved in cooperating with The Hague tribunal, the only critical issue in relations with the EU, accession negotiations with the EU were at last started in October 2005. A seven-month postponement was caused by an assessment that the government was not doing enough to locate and extradite one of the most wanted war crimes indictees, General Ante Gotovina. Gotovina was ultimately arrested in December in the Canary Islands. The HDZ government believes it is possible to finish the negotiations in two and a half to three years. Judiciary reform, the return of refugees, and respect of minority rights are some of the main challenges in Croatia's process to join the European bloc. Also among expectations from Brussels is public administration reform, but it appears that the incumbent government does not have a clear strategy to reduce the state apparatus and create an efficient administration. Limited progress has been made by adopting the Law on the Civil Service in July 2005. Since most of its provisions enter into force in January 2006, it remains to be seen to what degree its implementation will lead to a professional and transparent public administration. Croatia's rating for national democratic governance remains at 3.50. Though accession talks have begun, confirming the maturity and stability of Croatia's political system, real progress is expected next year, when the process of meeting the acquis communautaire will show concrete results.

Electoral Process. Two elections held in 2005, the presidential in January and local government in May, revealed certain deficits of the electoral procedure – namely, shortcomings in the management of voter lists. Incumbent president Stjepan Mesic won in a runoff (round two) by a high margin against HDZ ruling party candidate and Deputy Prime Minister Jadranka Kosor (66 to 34 percent). Before and even after the local elections, there was a serious lack of clarity regarding the allocation of reserved seats for minority representatives. Instead of taking into account updated voter lists, the government used the 2001 census list, thus neglecting changes registered in certain local units, particularly in return areas. Since parties won the necessary absolute majority in only a few places, the formation of local governments depended primarily on postelection negotiations between the HDZ (on one side), the SDP (on the other), and smaller parties such as the Croatian Party of Rights and the HSU. To prevent drawn-out manipulation of future election results, in September 2005 the government sent the Parliament a draft law to establish the direct election of mayors and county prefects. Croatia's electoral process rating worsens from 3.00 to 3.25 owing to shortcomings in the management of voter lists.

Civil Society. Nongovernmental organizations (NGOs) continue to grow and diversify, and the current number stands at 27,955. There is still work to be done to consolidate the legislative framework for civil society, and NGO influence on government policy remains limited. Nevertheless, there are positive examples, the most notable in response to the Druzba-Adria pipeline project that would transport Russian oil to the Adriatic Sea and from there to global markets. The project was abandoned through the continuous efforts of environmental NGOs to focus attention on the existence of environmental hazards. Many NGOs criticized the functioning of the National Foundation for Civil Society Development, accusing it of biased and nontransparent procedures in distributing funds to civil associations. The rating for civil society improves from 3.00 to 2.75 owing to its continued growth and greater public impact.

Independent Media. Media in Croatia are subject to free market rules. There are 19 television stations, 143 radio stations, 11 dailies, and several hundred magazines, some of which have substantial circulation while others struggle to survive in an uncertain market. The state remains the biggest media owner. Given that most local broadcasters are at least partially owned by or depend on the financial support of local authorities, they remain vulnerable to political pressure. The legal regulation of libel is still not satisfactory. Though changes to the criminal code eased the threat of prosecution, they fell short of full decriminalization. Three journalists received suspended prison sentences for libel in 2005. Though the law provides for freedom of the press, politicians frequently attempted to influence HTV public television. Croatia's independent media rating remains at 3.75.

Local Democratic Governance. Croatia has about 550 local (cities and municipalities) and 20 regional units (counties). The capital, Zagreb, has both city and county status. Decentralization planned in the government 2000-2004 program has been slower than originally foreseen. Though local self-government units gained greater competences, financial resources remained scarce, leaving authorities dependent on support from the central state budget. Following the May 2005 local elections, many local councils and assemblies faced crises following attempts by different parties and coalitions to shift the balance of power through postelectoral deal making. In some places, it took months to form workable councils. The proposed draft bill on direct elections of mayors and county prefects might create more democratic mechanisms by assigning executive responsibilities to the local and regional levels. The center-right Croatian Party of Rights did well at local elections, and the HSU – one of the surprise winners in the 2003 parliamentary elections – strengthened its position. The major drop in the number of council seats was recorded by the Croatian Peasant Party. The ruling HDZ lost more than 20 seats in county assemblies, and the opposition SDP lost 6 seats. Independent slates did well across the country. Croatia's local democratic governance rating remains at 3.75.

Judicial Framework and Independence. Many international reports and domestic analyses emphasize that improving the operation of Croatia's judiciary is a major challenge and that a reliable and efficient judicial system has yet to be achieved. The main problems are widespread inefficiency and the excessive amount of time needed to hand down and enforce rulings. There is a disturbing backlog of around 1.6 million unresolved court cases, most connected with the enforcement of civil judgments. Noteworthy progress has been made in tackling the serious backlogs affecting the Land Registry, the second largest problem area. In December 2005, the Parliament adopted a new Law on the Courts to rationalize the network of courts. Among European countries, Croatia has the largest number of courts, but the current distribution of caseloads is uneven; the largest courts are extremely overloaded, whereas smaller ones are not always used to their full capacity. With respect to the impartiality of the judicial system, according to the European Commission further steps need to be taken to eliminate any suggestion of ethnic bias against Serb defendants in war crimes trials. However, the OSCE mission to Croatia noted that Serb indictees in 2005 had a better chance of receiving a fair trial than in the past. Croatia's judicial framework and independence rating improves from 4.50 to 4.25 owing to further reforms toward more efficient functioning of the courts and Land Registry.

Corruption. Numerous surveys highlight a public perception that corruption has actually gotten worse over the past year. Citizens feel that corruption is especially widespread among political parties, in the judiciary, with representative bodies, and in land registration. The Ministry of Justice, with help from the international community, made progress in the latter area, introducing a digitalized Land Registry in May 2005 to increase public access to records and thereby remove a source of potential corruption. The government has prepared a National Program for the Fight Against Corruption, to be presented in 2006. Croatian foreign minister Miomir Zuzul stepped down from his office in January following public pressure related to charges of conflict of interest; he was the first Croatian minister ever to resign for this reason. Croatia's corruption rating remains at 4.75; new anticorruption policies, though they have not yet yielded visible results, offset public perceptions.

Outlook for 2006. The main priorities relate to the successful conduct of ongoing accession negotiations and to Croatia's capacity to meet EU criteria and conditions. These include implementing additional judiciary reforms, taking measures to reduce the backlog of cases in all courts, and ensuring proper and full execution of court rulings. Also, the government is expected to enhance the fight against corruption and to speed up the decentralization process.

Electoral Process (Score: 3.25)

On January 16,2005, voters were called to the polls for a runoff to elect Croatia's president for the next five years. The State Electoral Commission confirmed 13 official candidates. For the first time, there were as many as 3 female candidates and 5 independent contestants. In the second round, victory went to incumbent president Mesic, who won 65.93 percent of the votes, while the ruling HDZ candidate, Deputy Prime Minister Jadranka Kosor, won 34 percent. Turnout in rounds one and two was 50.6 percent and 51 percent, respectively.

According to the leading election-monitoring and support NGO – Citizens Organized to Monitor Elections (GONG) – the campaign was conducted in an atmosphere of peace and tolerance. The observed irregularities mainly concerned out-of-country voting, particularly in neighboring Bosnia and Herzegovina. These irregularities included voting under names of deceased persons and double voting, where the same person voted both in Croatia and in Bosnia and Herzegovina. Both problems appear to have resulted from the inadequate management of voter lists. GONG concluded that the outdated 1992 Law on Voter Lists was one of the main obstacles to conducting fair elections and recommended amendments to the law, such as creating a central electoral register and increasing the responsibility of the central state administration office for updating voter lists.

In May 2005, outdated lists were also a problem in the poll for representatives to 246 municipal and 123 city councils, along with 20 county assemblies and the Zagreb City Assembly. The May local elections were the first where those who broke the election silence (no campaigning ahead of the polling day) faced possible fines, which ranged from 3,000 kunas (US$500) for individuals to 100,000 to 500,000 kunas (US$16,700 to $83,350) for legal entities. Overall turnout was very low, around 30 percent, continuing a trend in recent years. Political analysts stressed that according to voter perceptions, local elections were less important than those for the Parliament.

The HDZ lost more than 20 seats in county assemblies, and the opposition SDP lost 6 seats. The far right Croatian Party of Rights (HSP) more than tripled its number of seats in county assemblies, and the party was particularly successful within war-affected areas. Political analysts have assessed the decline of popular support for the HDZ as being directly related to difficult economic conditions and the failure of the government to initiate EU entry talks in March as scheduled. The main loser was the Croatian Peasant Party (HSS), which gave up about half of its county governors and mayors. The decline of the HSS is a continuing trend that began with the 2003 parliamentary elections. The party's image was marred by accusations of horse trading and conflicts of interest. After 11 years with Zlatko Tomcic at its helm, the HSS got a new leader in December 2005, Josip Friscic, who promised to consolidate the party. Independent lists won a significant number of seats across the country, especially in Zagreb, Osijek, and Dalmatian cities and counties, indicating an important degree of popular disenchantment with national political parties. The shift was attributed to the fact that parties are increasingly losing their traditional ideological colors and that voters are pragmatically opting for candidates with the most name recognition.

The number of votes needed to win a representative seat differed radically among units. Winning a seat in the capital city assembly took 4,100 votes, while in sparsely populated Lika-Senj County, only 508 votes were needed. Since parties won the necessary absolute majority in only a few places, the formation of local governments depended primarily on postelection negotiations between the HDZ on one side, the SDP on the other, and various smaller parties, such as the HSP, the Independent Democratic Serb Party, and the HSU.

Before and even after the local elections, there was a serious lack of clarity on how to implement provisions of the constitutional Law on National Minorities concerning the allocation of reserved seats for minority representatives. The law requires that ethnic minorities be represented in local government bodies if the census shows that a minority group constitutes a specified percentage of the local population (above 5 percent in the case of counties or 15 percent in the case of municipalities and cities). As noted by GONG, the government did not consider updated voter lists when calculating the number of minority seats. Instead, the 2001 census list was used without taking into account the subsequent population changes in certain local units.

With regard to the Serb minority, the difference between the 2001 census and the 2005 voter list is considerable, particularly in return areas. Observers estimated that additional minority councillors would be seated in over 12 towns if voter lists were taken into consideration. Hence, the old voter list impeded minority voters not only from fully taking part in the local government election process, but from successfully attaining representation at the local level as well. GONG filed a complaint before the Constitutional Court to clarify the issue.

Amid dissatisfaction over the intense bargaining during the long coalition formation process, the government announced changes to the electoral laws that would enable direct election of county prefects, mayors, and heads of municipalities. A draft law was approved in the first reading by the Parliament in September 2005. However, the relationship between the directly elected prefect or mayor and representative body remained to be defined before the second reading of the draft, scheduled for March 2006. The government further sent to the Parliament a draft law on the establishment of a permanent State Electoral Commission, which is also a recommendation by the OSCE.

Given the lack of a precise legal framework, GONG called upon the Croatian Parliament, the ministries, and other national institutions to launch a comprehensive reform of electoral legislation that would include the adoption of a single law to regulate all elections and rules to regulate all electoral campaign financing.

Civil Society (Score: 2.75)

Civil society in Croatia continues to grow and diversify. The number of registered NGOs has increased from 23,740 in August 2003 to 27,955 in 2005, and a legislative framework is being prepared to help consolidate and support the work of civil society. Although official financial support is readily given to cultural, social, and humanitarian associations, public funding is less forthcoming for human rights and civic NGOs, which nonetheless play an important role in the democratic evolution of the society.

The relationship between major NGOs and the government deteriorated in 2004 with the lifting of the value-added tax (VAT) exemption on foreign donations for associations and nonprofit organizations. The unresolved VAT issue and lack of a legal NGO framework continue to impede particularly those groups concerned with human rights and civil society. This is still a matter of dispute between some leading NGOs and the government, and it "highlights the limited role NGOs continue to play in influencing government policy." Nevertheless, there are positive examples. One in particular has to do with those groups that responded to the Druzba-Adria project, which envisaged an integration of oil pipelines that would transport Russian oil from Samara to the tanker terminal in Croatia's Omisalj and from there to global markets. In 2002, the project was given a green light by the governments of six countries: Russia, Belarus, Ukraine, Slovakia, Hungary, and Croatia. Environmental groups and the green movement spoke out against the project, saying that its risks were too great and its benefits doubtful. By warning of the danger of tanker accidents in the Adriatic Sea, raising the issue of ballast water discharges, and pointing to omissions in the project's environmental impact study, these groups succeeded in persuading the government to abandon the project.

However, civil society in Croatia was still burdened by inadequacies in the institutional framework established to allocate funds. Many NGOs criticized the functioning of the National Foundation for Civil Society Development, accusing it of biased and nontransparent procedures in distributing funds to civil associations. In addition, the Government Office for Associations was condemned for displaying a bias toward associations stemming from the homeland war (1991-1995).

According to a survey carried out by the Ivo Pilar Institute, citizens have a generally positive perception of NGOs and consider them "very or somewhat useful for society." Most of those surveyed feel that associations make a pronounced contribution to raising awareness about citizen rights and the development of democracy in Croatia, but at the same time they feel that associations do not contribute much to solving concrete existential issues. They believe that social services and humanitarian work are the areas where associations can have the most impact. Following these in public esteem are groups that work in environmental protection (32.5 percent), health care (31.2 percent), legal affairs and politics (jointly 28 percent).

The survey showed that the most widely recognized NGOs are veterans associations and several environmental groups (Zelena Akcija, Osjecki Zeleni), followed by the consumer rights group Potrosac, the human rights group Croatian Helsinki Committee for Human Rights (HHO), and the women's rights group Be Active, Be Emancipated (B.a.b.e.), indicating that in most cases NGOs advocating for specific changes in society enjoy the highest visibility. The research also showed that there is a significant lack of understanding as to what NGOs actually are: Although four-fifths of those surveyed have heard the terms NGO and association, only half state they are familiar with their real meaning. This confirms that NGO activity has yet to become a proper and appreciated element of Croatian democracy. A disparity in civil society development still exists between urban and rural areas, particularly in war-affected areas.

Regarding education, some progress was made in 2005. A commission of historians has concluded work on a textbook covering the period of time from the homeland war to the present; This achievement follows two years of discussions after the expiry of a moratorium on teaching recent history in Serb-language classes in eastern Slavonia. In August 2005, the Ministry of Education and representatives of the Serb minority agreed on the use of standardized history textbooks for all children regardless of their ethnicity, starting in 2006.

Independent Media (Score: 3.75)

The media in Croatia are subject to free market rules. There are 19 television stations, 143 radio stations, 11 daily newspapers, and several hundred magazines; some have substantial circulation, while some are struggling to survive in an uncertain market. Three television stations have national coverage: HRT, Nova TV, and RTL. The state-owned HRT (Croatian Radio-Television), which broadcasts on three channels, is the largest and most influential. It earns around 40 to 50 percent of its revenues from the mandatory monthly subscription fee. Nova TV was the first commercial television with national coverage. The Croatian outlet of the German TV channel RTL was launched in April 2004.

The state is the biggest media owner. Along with the heavily subsidized daily newspaper Vjesnik, the state owns the HRT national broadcaster, the Hina news agency, and dozens of other media outlets. Local broadcast media are vulnerable to political pressure since most stations are at least partially owned by local governments or depend on the financial support of local authorities. According to the European Journalism Centre, the government controls approximately 40 percent of Croatian radio stations through local authorities. Local politicians and strongmen often sue journalists for mental anguish and libel.

The Internet in Croatia has begun to play an increasingly significant role as a source of information, with an estimated fourfold increase in users since 2000. According to a survey conducted by the GfK research agency in mid-July 2005,35 percent of Croats (more than 1.2 million people) go online at least once a month. The Internet is becoming increasingly important in political campaigns, and political parties are paying more attention to online activities such as forum discussions, surveys, and so forth. The top 10 Croatian Web sites feature entertainment, sports, and lifestyle stories. The state imposes no obstacles or barriers to Internet service providers.

At the end of August 2005, the Council of Electronic Media allocated 18 million kunas (US$3 million) from the Fund for Pluralism (set up by the Law on Media) to 93 local radio and 17 local TV stations for the production of programs focusing on issues such as minorities and culture, among others. The council has been criticized by several media outlets, which claim that the criteria used for distributing funds lack transparency.

International media corporations are new but powerful players in the media arena. The two dailies with the highest circulation (Jutarnji List and Vecernji List) are owned by international companies. EuropaPress Holding (EPH), publisher of Jutarnji List, is owned by WAZ of Germany, while Styria of Austria is the majority owner of Vecernji List. In March 2005, Styria launched a tabloid-style daily newspaper, 24 Sata.

The process of privatizing the Split-based Slobodna Dalmacija, one of the major Croatian dailies, was completed in August 2005 when EPH gained a 70 percent share. Thus, EPH's share of Croatia's print market has risen above the 40 percent limit stipulated in the Law on Media. EPH was therefore obliged to take measures to reduce its total stake to below 40 percent within six months.

Changes to the criminal code in effect since October 2004 eased the threat of prosecution for libel but fell short of full decriminalization. Since October 2004, four journalists have received suspended prison sentences for libel. Though the law provides for freedom of the press, politicians have occasionally attempted to influence national television. In December 2005, members of Parliament debated a television talk show on the legacy of former president Franjo Tudjman. Members of the ruling party attacked the program as anti-Croatian, and the HTV program council subsequently suspended the program's editor and host.

The debate prompted the Croatian Helsinki Committee on Human Rights and the Croatian Journalists Association to express concern that the ruling party was using political pressure to establish program control over HTV. Both the editor and one of the guests of the talk show received death threats. During the course of the year, an editor at the independent weekly Feral Tribune who reported on war crimes also received death threats, as did his colleague, the editor of the Zagreb-based Radio 101, in connection with the talk show concerning President Tudjman's legacy.

In late April, the ICTY indicted five print journalists and the former head of the secret service for contempt of the tribunal for revealing the identity and publishing the testimony of a protected witness. All six have pleaded not guilty at the ICTY, five appearing voluntarily and the sixth, the former editor of the daily Slobodna Dalmacija, appearing only after being arrested in Croatia for his initial failure to comply with the ICTY summons. The issue sparked debates and divided the public. The journalists concerned are known for their strong nationalist views, so it was widely believed that their reasons for revealing the protected witness's name were more political than anything having to do with press freedom. Even the president of the Croatian Journalists Association stressed that they had acted unprofessionally.

However, many in the journalistic community felt the indictments were a violation of press rights and freedoms. Vesna Alaburic, who lectures in media law at the Faculty of Political Sciences, Department of Journalism, at Zagreb University, said that because of the circumstances in the case (where the identity of the witness was "a public fact") and because "the witness himself talked in public in general terms about his own statements to the tribunal," there was no longer a reason for the tribunal to proceed with contempt charges. In October 2005, the OSCE Representative on Freedom of the Media, supported by the International Press Institute and the South East Europe Media Organisation, appealed to the ICTY to change its rules dealing with contempt of court (rule 77 of the ICTY's Rules of Procedure) so that it would apply only to officials who have actually leaked confidential information. Inside the country, the Croatian Journalists Association is the dominant professional alliance; it drafts media laws and lobbies for media-related legislation.

Judicial Framework and Independence (Score: 4.25)

Many international reports and domestic analyses emphasize that improving the functioning of the Croatian judiciary is a major challenge and that a reliable and efficient judicial system has yet to be achieved. The main problems are widespread inefficiency and the excessive amount of time needed to hand down and enforce rulings. There is a disturbing backlog of around 1.6 million unresolved court cases, most involving civil judgments.

The Constitutional Court has increasingly awarded damages to individuals complaining of delayed proceedings in lower courts. In the first nine months of 2005, the Constitutional Court received more than 1,000 complaints alleging unreasonable judicial delays in lower courts and the Supreme Court, finding violations and awarding damages in over 60 percent of the more than 400 complaints ruled on in that period. In 2005 alone, the Court awarded nearly 3 million kunas (411,000/US$500,000) in damages. The European Court of Human Rights called the delays "excessive" and a violation of citizens' right to trial in a reasonable time. Noteworthy progress has been made in tackling the serious backlogs affecting the Land Registry, which forms part of the municipal court system and constitutes the second main area of the overall case backlog. The digitalization of the Land Registry is under way, with the aim of making the system accessible online.

According to numerous pubic opinion polls, the judiciary in Croatia is perceived as corrupt. This problematic status is partly a legacy of the 1990s and partly the result of attempts by the ruling party to influence the appointment of judges and the functioning of the courts. In September 2005, the government adopted a comprehensive judicial reform strategy that specifies a number of short-, medium-, and long-term measures to reduce delays.

In December 2005, the Parliament adopted a new Law on the Courts that creates the framework for rationalizing the network of courts. The Ministry of Justice has announced a pilot project that would see the merger of 15 misdemeanor and municipal courts. Croatia has 110 misdemeanor, 106 municipal, 21 county, and 12 commercial courts, placing it among European states with the largest number of courts. Understaffing is not a concern within the judiciary. In relation to the total population, compared with the EU, Croatia has a relatively high number of judges (1,907 currently).

The distribution of caseloads, however, is uneven; the largest courts are extremely overloaded, whereas smaller ones are not always used to their full capacity. In an effort to address this problem, a 2004 ruling of the president of the Supreme Court transferred almost 26,000 cases from backlogged courts to those less burdened by unresolved cases. The Law on the Courts introduces a new method to guarantee the right of citizens to court action of reasonable duration, which will entail a greater commitment on the part of county courts – namely, if a higher court establishes that an unreasonable judicial delay appeal is justified it will impose a deadline for a ruling on the court that "violated" the right to court action of reasonable duration. The law also foresees the establishment of a Justice Inspectorate and a stipulation that judges pursue continuing professional education.

In 2004, a Justice Academy was opened to increase professional education for judges. The project is financed through the EU's CARDS program. The European Commission noted that particular attention needed to be paid to providing specialized training to judges and prosecutors on white-collar crime, money laundering, the fight against corruption, and other issues.

There is no legal aid organized by the state in civil cases, and currently only the Croatian Bar Association provides free aid with no state control over eligibility criteria. The Ministry of Justice is drafting a new Law on Legal Aid with input from the Bar Association, NGO representatives, and experts from the Council of Europe.

With respect to the impartiality of the judicial system, further steps need to be taken to eliminate any suggestion of ethnic bias against Serb defendants in war crimes trials, according to the European Commission. However, the OSCE mission to Croatia noted that Serb indictees in 2005 had a better chance of receiving a fair trial than in the past. As part of its completion strategy, the ICTY approved the transfer to Croatia of the case against Generals Mirko Norac and Rahim Ademi. The ICTY indicted Norac and Ademi for war crimes allegedly committed against Serb civilians during a 1993 army operation in the so-called Medak Pocket action, in southwestern Croatia. Ademi surrendered voluntarily to The Hague in 2001 and was granted a provisional release until the beginning of the trial, while Norac is currently serving a 12-year prison sentence handed down by the Rijeka County Court for war crimes committed in the Gospic area.

There have been positive steps in processing crimes related to the 1990s war of independence; for example, an investigation has been reopened into the murder of Serbian civilians in wartime Osijek. Also, in September 2005 five former members of the Croatian Interior Ministry's security forces were convicted and sentenced by the Zagreb County Court to a total of 30 years in prison for crimes, including the murder of Serbs in late 1991 at the Pakracka Poljana prison camp in western Slavonia. Charges were first filed in 1992, and the 2005 retrial took place after a Supreme Court reversal of a previous acquittal.

The other important test for Croatia's justice system is a new trial at the Lora military prison in Split for crimes allegedly committed in 1992 by eight military policemen accused of torturing and murdering ethnic Serb civilians. When the retrial began in September, only four of the defendants appeared before the court. The others went into hiding after the Supreme Court overturned their acquittal from the first trial in late 2002. The first "Lora prison trial" was a highly politicized affair. The authorities failed to provide protection for witnesses and released false information claiming some witnesses were themselves war crimes suspects. The result was that most witnesses were too intimidated to come to court. The first trial quickly became notorious as a miscarriage of justice. The behavior of the presiding judge, Slavko Lozina, was never officially questioned, although he has been removed from the retrial proceedings. The ongoing trial is being conducted in a professional manner, according to observers.

Corruption (Score: 4.75)

Numerous surveys highlight the public perception that corruption has actually gotten worse over the past year. According to the European Bank for Reconstruction and Development's 2005 Transition Report: "Croatia was among the few transition countries (Hungary, Azerbaijan, Armenia) in which corruption in 2005 was higher than in 2002."

Transparency International indicates in its Corruption Perceptions Index for 2005 that Croatia has dropped three places from the previous year, which places it in the company of Burkina Faso, Egypt, and Syria. Citizens feel that corruption is especially widespread among political parties, in the judiciary, and in representative bodies. On a scale of 1 to 5, with 5 representing total corruption, political parties scored a grade of 4, followed closely by representative bodies with 3.9 and the judiciary with 3.8. Citizens evaluated NGOs, the military, and the church as being the least corrupt.

Hospitals were among the institutions with the worst reputations. Agence France-Presse reports that 90 percent of Croatians feel that bribing doctors is not out of the ordinary. Bribery, nepotism, and political patronage are a legacy of the former regime and the nation's past. Numerous surveys also highlight that corruption is perceived to be widespread in land registration. The Ministry of Justice, with help from the international community, made progress in this area by introducing a digitalized Land Registry in May 2005. This will increase public access to records and thereby remove a source of potential corruption.

To deal effectively with the problem of corruption, which the European Commission's November 2005 Progress Report on Croatia called a serious threat to the functioning of society, the government has prepared a National Program for the Fight Against Corruption, which will be presented during negotiations with the EU on the justice chapter in 2006.

The European Commission has advised Croatia to set up internal controls in every area of the public administration to investigate corruption based on accountable and transparent rules. A more proactive approach also includes a coordinated awareness campaign involving media and NGOs to inform the public about the dangers of corruption and the institutions and measures involved in fighting it.

In March 2006, amendments to the Law on the Office for the Suppression of Corruption and Organized Crime will strengthen the role and jurisdiction of the office and more clearly define its activities. It remains to be seen whether these amendments will be implemented effectively. Croatia still lacks legislation on political parties' financing to make their assets and financial supporters more transparent. The effectiveness of the parliamentary Commission for the Prevention of Conflict of Interest, which required officials to publicly declare their assets, was limited by infighting and an overly broad mandate.

In a governmental first for Croatia, Minister of Foreign Affairs Miomir Zuzul stepped down in January 2005 following public pressure related to charges of conflict of interest. He allegedly took a bribe in return for securing the government's intervention on behalf of a local company in a privatization deal. The press also accused him of other misdeeds, and opposition parties claimed that the scandal had damaged Zuzul's credibility to such a degree that he should resign, which he eventually did.

Without legal security and transparency, Croatia cannot expect the influx of foreign investment it earnestly counted on after the October 2005 decision to launch negotiations with the EU. Therefore, the HDZ government will have to make a more determined effort in the struggle against corruption. Based on the experience of the past 10 years, an improvement of one point on Transparency International's Corruption Perceptions Index purportedly attracts as much as a 15 percent increase in foreign investment. Clearly, improving the fight against corruption, as measured by moving up Transparency International's index, will pay off for Croatia's economy.

Author

Barbara Peranic is a journalist for Croatia National Radio.

Local Governance (Score: 3.75)

Croatia has about 550 local (cities and municipalities) and 20 regional (counties) units. The capital, Zagreb, has both city and county status. Local government responsibilities are defined by the Law on Local Government of 2001 and include water supply and sewerage, primary health care, preschool and primary education, and so forth. Decentralization, as planned in the government 2000-2004 program, has been slower than originally foreseen. Though local self-government units gained greater competences, financial resources have remained scarce, leaving authorities dependent on support from the central state budget. Overall, it seems that the issue of decentralization has not been an urgent priority for the current government.

Following the May 2005 local elections, many local councils and assemblies faced crises following attempts by parties and coalitions to shift the balance of power through postelectoral deal making. In some places, it took months to form workable councils. The election was held for 8,377 representatives; on average, 8 candidates ran for each seat on local councils, municipal bodies, and county assemblies. Political relations after the elections were so complex that in most units it was impossible to say who might form the local government. For most of the slates that managed to secure a leading position, that was only the beginning of lengthy negotiations with potential coalition partners. The HSP did well in the elections, while the HSU, one of the surprise winners of the 2003 parliamentary elections, continued to strengthen its position. In many places, these two parties would tip the scales when forming a governing majority.

A drop in the number of council seats was recorded by the HSS (45 fewer seats in county assemblies than in the 2001 elections) and by the HDZ (26 fewer seats). The SDP won 6 fewer seats overall in county assemblies. The HDZ lost ground in big cities, defeated by the SDP-led opposition in Zagreb and Split, and at the same time performed below standard in Slavonia and Dalmatia, which were considered HDZ strongholds. There is a widespread public perception that the HDZ-led government has failed to deliver on its promises in the economic and social spheres. Moreover, many of the party's right-wing supporters, alienated by Ivo Sanader's moderate course, appear to have turned to the more stridently nationalist HSP, which managed to occupy some of the political ground on the Right that the HDZ had vacated. The HSP is now strongly placed in a number of areas and has a good starting position for the next parliamentary elections, due in 2007. Various opinion polls show the continued decrease of HDZ popularity and an increase in the popularity of the opposition. In September 2005, the SDP was more popular than the HDZ, with a difference of 2 percent in favor of the SDP according to research agency PULS' survey.

An exceptionally long period of political bargaining was marked by numerous accusations of councillor "buying" leveled back and forth among the parties. The media were packed with reports of alleged "immoral offers" of financial and other types of compensation made by parties to councillors, with the hope of luring them to their camp to form a governing majority. Vecernji List ran an article in May 2005 entitled "Millions for Council Seats," describing how two SDP members on the slate for the Sisak-Moslavina County Assembly were allegedly offered from 1.5 million to 2.5 million kunas (US$250,000 to $416,700) by the HDZ to cast votes needed to form a governing majority.

To prevent drawn-out manipulations of future election results, the government sent the Parliament a draft law in September 2005 to establish the direct election of mayors and county prefects. The law included provisions on minority representation in executive and administrative bodies at the local level. Direct election is supported by all parties. In their arguments for such a move, they stress that direct election would give local leaders greater responsibility toward voters. The Association of Alliance of Cities and Alliance of Counties also backed the move, warning that a new model should also address the financing of local government. Members of the association claimed that income tax moneys should be channeled to local and regional self-government units so that larger cities would receive 60 percent of collected income tax. They point out that since finances need to be brought in line with responsibilities, consideration should be given to the economic strength of individual local units in choosing a model. The European Commission is providing Croatia with 1.3 million (US$1.58 million) for a fiscal decentralization project and a further €1.35 million (US$1.64 million) for administrative decentralization.

Numerous public opinion polls – including a survey carried out by the Prizma Research Agency in May 2004, a year ahead of the local elections – have confirmed that citizens are in favor of direct elections. In a sample of 619 Croatian adults, 76 percent support direct elections, saying they would rather vote for an individual than for a party or coalition that would then install a mayor. The fact that only 7 percent of citizens feel they are fully informed of the work of their local government is astonishing. Half feel that they are only partially informed, while as much as 38 percent say they are not at all informed about the work of their local government. Expressing their (dis)satisfaction, those polled gave evaluations from 1 to 5, with 5 indicating complete satisfaction. An average score of 2.7 indicated that most citizens were not satisfied with the work of the local government. According to the Prizma survey, "It appears that Croatian citizens are after all weary of political games at the local level and the trading of shots over party lines and feel that candidates not burdened by party-political discipline and directives might better address local issues and problems."

Indicative of this general public opinion is the good showing and upswing recorded by independent slates in the May 2005 local elections. In Zagreb, for example, an independent slate led by Tatjana Holjevac won about 6 percent of the vote and three council seats. Independent slates also did well in Osijek and Split.

National Governance (Score: 3.50)

Croatia has a parliamentary system of government, with stable democratic institutions that function properly and cooperatively. The present system of government was established through a series of amendments to the Constitution: Those in 2000 and 2001 strengthened the role of the Parliament, transforming it from a bicameral to a unicameral body. The reduction of presidential powers secured a greater balance of power between the head of state, the prime minister and his cabinet, and the parliamentary majority.

This does not mean, however, that the office of the president – who is elected for a renewable five-year term by direct universal suffrage – has been reduced to a symbolic role. The head of state remains a significant factor in creating and implementing foreign policy, and Stjepan Mesic, who in January 2005 won his second term in power, frequently appears in public as a critic of the government. In accordance with the Constitution, the president is the supreme commander of the armed forces, calls referendums, and gives the mandate to form the government to whoever is chosen by the parliamentary majority.

The Parliament (Hrvatski Sabor) is made up of a single chamber, and according to the Constitution, it exercises legislative power and shares the right of legislative initiative with the government. Laws typically undergo a lengthy parliamentary procedure of three consecutive readings. However, the Constitution allows for an emergency procedure. Using that option to continue work on harmonizing Croatian legislation with the European Union's acquis communautaire, the government in 2005 introduced into parliamentary procedure numerous emergency bills, such as the Law on Telecommunications, amendments to the Law on Chemicals, amendments to the Law on Public Gathering and the Law on Health Insurance, and so forth.

Accession negotiations between Croatia and the EU were launched in October 2005 after a seven-month postponement resulting from Croatia's failure to meet all of its obligations in cooperation with The Hague's International Criminal Tribunal for the Former Yugoslavia – specifically, that it was doing nothing to locate and extradite one of the most wanted war crimes indictees, General Ante Gotovina. After the delay, the government initiated an action plan to locate and transfer Gotovina to The Hague. Eventually, Gotovina was arrested in the Canary Islands on December 7. Gotovina has been on the run since he was indicted in 2001 for alleged atrocities in August 1995 against rebel Serbs in an army offensive to retake rebel areas of Croatia.

After the launch of membership talks, Croatia underwent "screening" – an in-depth analysis to conform its legislation to that of the EU – before concrete negotiations on each chapter. According to the plans of Croatia's negotiating delegation, the country could open talks for 8 of the 35 chapters of the European acquis by mid-2006, during Austria's presidency of the EU. The HDZ government believes it is possible to finish accession negotiations in two and a half to three years. The launch of EU accession talks confirmed the maturity and stability of the political system, but as European officials pointed out, there is still much work ahead for Croatia.

Judiciary reform, the return of refugees, and respect of minority rights are some of the main challenges in the process of joining the EU. Brussels also expects public administration reform, but it appears that the incumbent government does not have a clear strategy to reduce the state apparatus in order to create an efficient administration. Therefore, it remains politicized with an ambiguous system of promotion and mobility. The rules of recruitment and selection of candidates could also be improved. Limited progress was made in July 2005 with the adoption of the Law on the Civil Service. Its amendments address a number of critical deficiencies in the legal status of civil servants and other public employees. These include the politicization of the administration, recruitment, selection, promotion, and training policies, and the regulation of possible conflicts of interest. Most provisions of the new law enter into force in January 2006, so it remains to be seen to what degree its implementation will lead toward establishing a professional, efficient, accountable, and transparent public administration.

There was no new movement to reform the secret services in 2005, despite the fact that the HDZ announced their reorganization immediately after assuming power in 2003. The intelligence community remains organized through three agencies: the Civil Intelligence Agency, the Counterintelligence Agency, and the Military Security Agency. Work of the intelligence community is supervised by the Parliament through its Committee for Internal Policy and National Security and, since 2003, by the Council for Civilian Supervision. As of early November 2005, the government had circulated for comment a working draft of a new law on the intelligence service, according to which two existing services, the Civil Intelligence Agency and the Counterintelligence Agency, would merge into one and intelligence would be provided with more sweeping investigative authority as well as additional oversight mechanisms.

Overall, the activities of the secret service have been subject to much public scrutiny, mainly in connection with possible violations of the human rights and freedoms of five journalists who were put under surveillance in 2003 and 2004. They filed a petition requesting authorities to investigate allegations that the Counterintelligence Agency tried to discredit them as being involved in operations that undermined national security after they reported on sensitive war crimes and criminal issues. The affair ended with a probe of the parliamentary Committee for Internal Policy and National Security, which in March 2005 concluded that there were grounds to suspect the agency had breached the journalists' fundamental freedoms without cause. There has been no specific follow-up on the case.

Croatian law guarantees the right to access information, but its provisions are unevenly applied in practice. In August 2005, a court ruled in favor of a journalist who had been denied access to timely information by the government. The ruling revealed the extent to which state institutions in Croatia are closed to the public. Since the 2003 adoption of the Law on the Right to Access Information, citizens have filed 60 suits against state institutions that have denied this right. Transparency International Croatia has also reported that almost half of the public institutions in the country are not in compliance with the Law on the Right to Access Information.