Croatia’s Bad Choices

Croatians suffering from austerity and sick of corruption need a political alternative.

The political future of Croatia is in doubt. In June, the country’s government — led by a coalition of the right-wing Croatian Democratic Union (CDU) and the upstart centrist party Bridge of Independent Lists — collapsed due to a corruption scandal that implicated Deputy Prime Minister Tomislav Karamarko.

On June 16, Parliament held a confidence vote for the non-partisan, technocratic prime minister Tihomir Orešković and a majority deemed him unfit to govern.

On the surface, it was all over €60,000. The scandal goes back to the CDU’s Ivo Sanader, who was prime minister from 2003 to 2009. He was arrested in 2010 on charges that he received €10 million from the Hungarian oil company MOL in exchange for a major shareholder position when the Croatian oil company INA was privatized. In 2012, he was sentenced to ten years in prison — for the INA scandal and various other corruption charges that popped up one after the other.

The government investigation into INA’s sale continued. And, in May 2016, the press revealed that Karamarko’s wife earned €60,000 as a consultant for MOL, which brought into question the credibility and independence of the investigation.

Bridge called for Karamarko to step down, citing the obvious conflict of interest, and, after a lot of bickering from all sides, he obliged, bringing the entire government down with him.

Croatia now faces new parliamentary elections in September, less than a year after the last round. Although this was the final result of a politically tumultuous eight-month period, the current crisis has far deeper roots.

The Origins of the CDU

The Croatian Democratic Union was founded in 1989 in response to the rise of nationalism in the Yugoslav republics during the 1980s and in anticipation of the state’s breakup and the civil war. CDU founder Franjo Tuđman served as Croatia’s autocratic president from the proclamation of its independence in 1991 until his death in 1999.

Croatian nationalism, like its Serbian equivalent, did not suddenly arise with the start of war in 1991: it was forged in the economic and political degradation of Yugoslavia since at least 1980.

But Franjo Tuđman successfully channeled Croatian nationalism, giving it a specific political articulation, based on fierce anticommunist, anti-Serbian, and nationalist sentiment that flirted with fascism. This new Croatian nationalism manifested itself in various ways, from the burning of 2.8 million books written in the Cyrillic (Serbian) script or on Marxist topics to the ethnic cleansing of Serbs during the war. More than 12 percent of Croatian citizens were Serbs in 1991; a decade later that number dropped to 4.5 percent.

The CDU held power from 1991 to 2000, a tumultuous period in which Croatia transitioned to capitalism, enacted privatizations — backed by the International Monetary Fund — of state-owned companies, and fought what it calls “the homeland war” against the Serbs and Bosnians. Tuđman led the country throughout this period and became the face of Croatian nationalism — just as Slobodan Milošević did in Serbia.

By the end of the 1990s, voters were fed up with the CDU’s corruption and privatization scandals, as well as economic decline and deteriorating living standards. The Social Democratic Party (SDP) — a center-left party and the nominal, but not political, descendent of the Communist Party of Croatia — won the 2000 parliamentary elections.

In power, the SDP moved the country further toward Western-style parliamentary democracy and limited the role of the president. But it continued to privatize state assets and liberalize the economy.

Neoliberalism and the Right

Since then, Croatia has maintained a typical two-party parliamentary democracy. The SDP and CDU rotate in leadership every four or eight years. In the 2000s, Ivo Sanader led the CDU away from Tuđman’s right-wing radicalism and toward the more “European” identity of a conservative, but modern, party. This was in part motivated by Croatia’s 2003 bid for European Union membership, which it officially joined in 2013.

Both parties had similar economic policies, implementing what the European Union and IMF requested: gradually cutting the social welfare budget, reducing workers’ rights and job security in the name of a flexible labor market, and increasing capital flows — which, for a country on the European semi-periphery, meant economic dependence on the countries in the center.

The parties’ similarity has become more and more obvious to Croatian voters since 2008, when the country’s GDP per capita peaked. But the global economic slump of the same year put an end to the dream of unstoppable economic progress, and Croatia has never reached the same income level again.

This economic pressure forced the Croatian governments (both CDU- and SDP-led) to further slash the welfare state. Health care costs started to rise and joblessness grew. The country reached a stable 20 percent unemployment rate (15 percent during the summer tourist season), with a 40 percent youth unemployment rate (which peaked at 52 percent in 2013), increasing job insecurity, and general precarity even among the employed.

The situation had a dual political effect. On the one hand, church and family have filled the vacuum left by the welfare state, leading part of the Croatian populace to a more explicit right-wing radicalism.

For example, the country’s LGBT community was targeted by a massive conservative movement called “In the Name of the Family,” backed by the Croatian Church. The group gathered signatures calling for a referendum that would constitutionally define marriage as a union between a man and a woman. The vote, held in December 2013, succeeded: 66 percent of voters approved the amendment. (However, turnout was abysmal: 62 percent of eligible voters did not vote at all.)

Likewise, there has been a fascist upsurge, with calls to purify Croatia of “communist” elements and to revive the memories of Tuđman, the “homeland war,” and the Ustasha movement of the Independent State of Croatia, a Nazi puppet-state during World War II.

Karamarko, who became CDU president in 2012, picked up on this, shifting his rhetoric rightward and announcing that a “re-Tuđmanization” of Croatian society would follow a CDU return to power.

On the other hand, those who do not share these right-wing sentiments have become increasingly disillusioned with centrist policies.

For several years now, these voters have sought a party to break the status quo. And several new parties have entered the political scene — such as the Labour Party or “Walnut,” the Green Party — and enjoyed short-term success.

But each new party’s rise and fall has followed the same pattern of disillusionment: voters give it their confidence, it proves incapable of offering anything remotely like a political — let alone economic — rupture, and support retreats.

This is where the newest “alternative” party — Bridge — comes into play. In 2012, Bridge formed as a minor local party, soon winning the mayoral election in Metković, a small Mediterranean city. Božo Petrov — Bridge president and the newly elected mayor — cut the city debt by two-thirds through various popular methods, like reducing city officials’ wages.

The party quickly rose in the national polls thanks to its leadership’s reputation as young technocrats, unaffiliated with either CDU or SDP and fighting inefficient government spending and corrupt party bureaucrats. Bridge’s image as a party of experts “beyond” ideology allowed them to capture 12.5 percent of the vote in November.

Technocracy and Its Discontents

The 2015 elections were a first in Croatia because no centrist party could form a government: the SDP won fifty-six seats and the CDU won fifty-nine in the 151-seat parliament.

However, Bridge won nineteen seats, making it either party’s only realistic political partner: whichever force it chose to form a coalition with would end up in charge. After two months of political courting, Bridge finally picked the Croatian Democratic Union, and they formed a technocratic-conservative government in January 2016.

Karamarko and Petrov both became deputy prime ministers. The coalition’s choice for prime minister was particularly interesting. Since Bridge’s agenda rested heavily on technical expertise and major reforms, which CDU adopted, the two parties called on Tihomir Orešković — a Canadian entrepreneur of Croatian descent, who did not belong to a party at the time (and therefore did not receive a single vote in the election) — to become prime minister. But, precisely for those reasons, Orešković perfectly fit Bridge’s narrative of non-partisan expertise.

The new government’s theatrically announced reforms amounted to nothing more than the usual EU economic demands. Orešković presented them as original and autonomous government decisions, but they were clearly handed down from the European Commission. And they would have been the same regardless of the elections’ results and the party in power.

Like all the previous governments, Orešković started cutting the public sector, reducing workers’ rights while increasing corporate power, and privatizing the few remaining state-owned companies.

As a result, Croatia will likely undergo what Greece did last year. Croatia and Greece are both semi-peripheral EU economies, a position that condemns them to importing the central EU economies’ exports. As a result, the country already has, and will continue to maintain, a permanent trade deficit.

Croatia has no real productivity because the entire industrial sector is either privatized or shut down. Combined with the EU limitation on budget deficits (not greater than 3 percent of GDP) and public debt (not greater than 60 percent of GDP), this ensures that the public sector will contract ever further. Since a trade surplus is not achievable and public debt has to be reduced from the current 86 percent of GDP, that is the only way left to reduce a budget deficit.

Luckily, unlike Greece, Croatia is still not part of the eurozone and thus still has at least nominal autonomy when it comes to monetary policy. However, the Croatian National Bank follows a rigid anti-inflationary policy, effectively denying itself the right to impact the economy by changing the currency’s value.

Meanwhile, Karamarko has kept his right-wing promises. He appointed a creationist as a minister of science, education, and sports and Zlatko Hasanbegović  — whose youthful involvement with fascism caused quite a stir in February — as the new minister of culture. The independent press published old photos of him posing in an Ustasha hat along with some like-minded friends, who on other occasions posed in Nazi uniforms.

Of course, the Hasanbegović of today distanced himself from the Hasanbegović of the 1990s, making a couple of media appearances to portray himself as an opponent of radicalism.

But his decision to fire all politically unsuitable — that is, leftist — elements from his ministry and to deny state funds to the generally left-wing independent media is more indicative of his real political position.

The government also installed right-wing journalists to run the state-owned television company Croatian Radiotelevision (HRT). Orešković and Petrov — supposedly apolitical — did not object to any of this, even helping to do damage control in the media when necessary.

Of course, cadre rotations in state apparatuses happen each time CDU and SDP trade places in the government. But the CDU-Bridge government was more aggressive and more open about it, hoping to gain support from the reinvigorated right and to control, as much as possible, the means of cultural production.

Fascism on the Horizon?

But it would be a mistake to understand the CDU-Bridge coalition, even with its aggressive cabinet and media restructuring, as a fascist government.

On the contrary, the Croatian state still serves a dual clientele: on the one hand, capitalists both foreign (mostly European) and domestic (embodied in big fish such as Ivica Todorić or Emil Tedeschi) whose dealings on the Croatian market remain institutionally and legally ensured; on the other, local party elites, whose dual CDU-SDP structure came out of November’s elections mostly unscathed.

The inter-party drama is of no interest whatsoever to the capitalists, as long as capital continues to flow and the political forces fulfill their duties to the market.

As Todorić recently said, visibly agitated by the petty politics that occupied Croatian newspapers’ front pages as it became clear that the government was about to collapse:

Croatia’s problem is that my company looked for four thousand workers at the labor bureau, while only two hundred applied for the job. That’s Croatia’s problem, not if some coalitions came to an agreement or not. Those are processes, but these are real problems.

In other words, it doesn’t matter which party has state power as long as the state serves the capitalist general interest — which the European Commission and the IMF make sure it does.

All the better for capital, because this fall’s election will likely produce no parliamentary majority and another CDU-SDP impasse. Bridge has declared that they cannot work with either — although that’s what they said before November’s election. But that may not matter: the party has lost almost half its support, falling down to 6 percent in the latest polls.

Searching for Left Alternatives

New “anti-establishment” parties are emerging, and disappointed Bridge voters will probably go to them, since they make the same promises: a supposedly anti-ideological stance carried by highly educated people new to politics and unblemished by the CDU’s and the SPD’s corruption.

This is basically all the Croatian middle classes care about. And since these new parties have not yet had the opportunity to fail — as Bridge has — voters are once again falling for it.

At the same time, no real left alternative exists, at least not one that could reach the wider public. The Croatian left is relatively inexperienced and divided.

The fact remains, however, that voters are becoming increasingly disillusioned and want challenges to the political mainstream. This can be seen in the growing divide between the Right and the liberal left. The Right is still a smaller — although perhaps louder — group than the liberal left, but its size has not slowed down its initiatives.

An anti-abortion protest in Zagreb, supported by the Church, attracted around fifteen thousand protesters, and small, openly fascist groups are starting to appear. One held a small — albeit only twenty-person — military-style parade on the Zagreb main square recently.

The Right also attempted to infiltrate an ongoing educational reform project, which provoked the liberal left into mobilizing forty thousand people in Zagreb and other cities across Croatia.

But the protest’s organizers declared themselves “apolitical” from the start to distance themselves from the Right’s accusations that they were only SDP’s pawns. Thus, the rally’s slogans focused, more or less, on apolitical positions: “We are neither on the Right, nor on the Left. We are on the side of the future.”

The conflict between the Right and the liberal left might broaden, but that will not bring about any real change until there is a major political force willing and able to challenge the European Union’s diktat and the neoliberal policies that the mainstream parties consent to.

The Croatian left is small and fragmented. Until it organizes politically, voters searching for alternatives are bound to be disappointed over and over again. This might, in the long run, mean a further turn to the already organized and increasingly fascist right.