Business-minded PM could transform Croatia

Oreskovic’s key priorities are to reform the public sector, stabilise the budget deficit, and aggressively work on foreign investment and viable business opportunities to stimulate growth and employment.

Since Croatia joined the EU in July 2013, some analysts say that more than 100,000 people have left the country in search of work.

On 23 December, 46 days after the 8 November elections and after five rounds of political consultations with parliamentary parties, Croatian president Kolinda Grabar-Kitarovic announced that the new prime minister-designate would be the non-partisan and experienced corporate manager Oreskovic.

She said that with 78 seats, the Croatian Democratic Union (HDZ)-led Patriotic Coalition (59 seats) and the Bridge of Independent Lists (known by its Croatian acronym, Most) (19 MPs) had a majority in the 151-seat parliament.

Pharmaceutical background

The big election surprise is the success of Most, a party led by the young mayor of the southern town of Metkovic, Bozo Petrov, which came third.

For the first time in Croatia's history, a third political option has pushed the two established centre-right and centre-left political groups to negotiate a concrete set of measures and reforms to be implemented within an agreed time-frame.  

The HDZ, led by Tomislav Karamarko, first negotiated to form a government with Most and the Social Democratic Party (SDP)-led “Croatia is Growing” coalition.

But Most and the SDP failed to agree a deal. Finally, Most and the HDZ agreed to support Oreskovic because some Most members opposed Karamarko.

Prior to accepting this challenging position, Oreskovic was the chief financial officer of Israeli company Teva Pharmaceuticals, the largest generic drug manufacturer in the world and one of the 15 largest pharmaceutical companies worldwide.

The Croatian-Canadian also served as the CEO and chairman of the supervisory board of Teva Europe and its Croatian subsidiary Pliva.

With HDZ-member Grabar-Kitarovic holding the presidency since February 2015, the centre-right option will have control of the legislative and executive branches of government.

'Five factors of transformation'

The extensive international experience of both Oreskovic and Grabar-Kitarovic, a former Nato assistant secretary general for public diplomacy, will surely improve Croatia’s foreign policy agenda towards the European Union, neighbouring countries, and the United States, especially in the policy areas of defence, energy security, foreign policy, finance and migration.

Former PM Zoran Milanovic’s diplomacy was at times confrontational and led to disputes with Germany, Hungary, Slovenia, Serbia, and the EU.

The Croatian public was surprised when Oreskovic presented his new government, future policies and reforms to the Parliament via a PowerPoint presentation.

As a sign that Oreskovic will be a proactive leader, he travelled to Austria on 14 January before he was sworn in, accompanied by Croatian National Bank (HNB) governor Boris Vujcic, where he met with international investors holding Croatia's debts and presented his plan to reduce the public debt.

"I took the opportunity to present the five factors of transformation - namely, public sector efficiency, enhancing competitiveness, investment and EU funds, as a way of launching growth, deficits and debt reduction, and health care reform," said Oreskovic.

Unlike Milanovic who openly stated that he doesn’t want to meet companies looking to do business in Croatia, the private sector is eager to have a business-minded leader in government.

Attractive partner

It is unclear how the daily operations of the future government will function.

If the political leadership allows the prime minister to do his job and entrusts him with the authority, along with the responsibility, to manage the complexities of running a government, the government has a unique chance of being successful and, especially important, efficient.

Since the centre-right sealed a majority in the European Parliament and the European Commission was taken over by a centre-right president, relations with EU institutions should also be a positive factor for “Tim’s Team”.

Effective business communications coupled with a serious reform programme should make this government an attractive partner to reinvent the troubled economy and inject more competitive thinking within the government and their bureaucrats.

Natko Vlahovic is the Executive Director of the Croatia EU Business Council.