Wednesday

17th Jul 2019

Opinion

Why does Croatia need lobbying to join the EU?

  • Croatia's PM Jadranka Kosor: Cosmetic or real reforms? (Photo: Croatian Government)

Croatia is being heralded as the next candidate nation to join the European Union. Intriguingly, Austria and Germany, Croatia's historical supporters have robustly lobbied for an accelerated entry into the single market.

On January 27, 2011, The European Parliament's (EP) Foreign Affairs Committee adopted a draft resolution stating that Croatia can conclude its EU membership talks by the end of June 2011. The document, drafted by Austrian MEP Hannes Swoboda, the assembly's rapporteur for Croatia, praised Croatia for its "substantial" reform progress.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

In a sharp contrast to Austrian and German leaders lauding Croatian politicians, the 2010 EU Progress Report on Croatia released in November conveys that an unreformed judiciary and rampant political corruption represent major challenges: "The number of court verdicts has increased but this mainly concerns petty corruption cases. There have been no final court rulings in serious political corruption cases. A high number of reported cases are dismissed after pre-investigation, with insufficient scrutiny."

The brunt of Croatia's rampant corruption is now being felt by Austrian and German taxpayers as they paid a hefty bill generated by their own banks' dubious Balkan transactions. Germans bailed out BayerLB with €10 billion of which €3.8 billion was directly linked to the losses by Austrian Hypo Alpe Adria Bank's foray into the Balkans.

Germany's public prosecutor is probing into reasons why BayerLB purchased loss-making Austrian Hypo Alpe Adria. In Austria, its taxpayers paid an initial €500 million for Hypo Bank's nationalisation.

Austria's Carinthian parliamentary commission is investigating Hypo Alpe Adria's €8 billion worth of suspicious uncollected loans in 12 countries with several €100 million loans directed to Croatia. The commission's representatives Rolf Holub and Peter Pilz have widened their investigation to identifying Austrian and Croatian politicians who took part in the import of weapons into Croatia in the early 1990s and siphoned off €2 billion to secret bank accounts in Hypo Alpe Adria.

The Austrian commission states that these monies were then laundered to Croatia in the form of Hypo Bank loans. Military services in Vienna possesses documents from 2001 which identify the late Franjo Tudjman, then-president of Croatia, a jailed former general Vladimir Zagorec and 10 other Croatian politicians as key individuals in this colossal corruption and money-laundry scheme.

Mr Holub from the Austrian commission confirmed that Croatia's former Prime Minister Ivo Sanader and former head of the ruling party Croatian Democratic Union (HDZ) is the main focus of their probe in Croatia followed by Germany's honorary consul in Rijeka, Croatia and HDZ party loyalist Mr Robert Jezic.

What makes Mr Swoboda and his colleagues in Brussels think that Croatia will confront this unscrupulous power base by July 2011, if this Balkan nexus comprised of organized crime, corrupt government officials and their private partners haven't been touched for two decades?

Although externally initiated and aided investigations have drawn attention to corruption in Croatia, they have not yet produced any high-profile conviction.

When observing two high profile corruption cases including Croatia's former cabinet ministers Damir Polancec and Berislav Roncevic, the court's initial decisions have now entered the lengthy appeal process.

The EU Progress Report amplifies this concern by stating, "A track record of effective investigation, prosecution and court rulings remains to be established, especially for high level corruption."

Hungary's prosecutor probing into Hungarian oil company Mol's questionable transactions with state-owned Croatia's food company Podravka resulted in the indictment on fraud of Croatia's then-Deputy Prime Minister Damir Polancec.

According to Hungary's prosecutor, Mol provided a €34.2 million loan to Podravka via the Hungarian OTP bank, in return for Croatian oil company INA's shares, even though Podravka does not own a single INA share. Before taking office, Mr Polancec served as board member of Podravka and according to the Financial Times, senior Podravka officials are suspected of diverting funds to buy private shares with company money.

In 2006, Austria's Interpol alerted Croatian authorities of $4.7 million withdrawn in cash from an Austrian bank by a Croatian citizen who happened to be a broker in the deal involving Croatia's state-owned shipyard Brodosplit. Immediately, the State Attorney's Office in Graz, Austria, initiated criminal proceedings against the broker on money laundering suspicions.

After a four-year delay, Croatia's prosecutor finally decided to indict the broker. The broker claims that €2 million had been siphoned off every month for many years from Brodosplit for the governing party Croatian Democratic Union's (HDZ) financing needs.

The recent 2010 Daimler bribery case unearthed by US authorities provides yet another example of collusion between Western companies and Balkan politicians. According to the US Securities and Exchange Commission, top executives of Daimler admitted paying €4.7 million in bribes to Croatian officials from 2002 to 2008. This inquiry has failed to produce results.

In spite of cosmetic changes initiated by Croatia's current Prime Minister Jadranka Kosor, a number of senior cabinet members and top HDZ politicians remain in power amid allegations of corruption and illicit enrichment. Ms Kosor's own residential property in Zagreb has come under question by Croatia's few independent media sources including political weekly Nacional and online media Index.HR. The rightful owner of the facility now occupied by prime minister Kosor lost property rights under an opaque and corrupt-ridden system.

The EU Report poignantly states, "the concept of conflict of interest is still little understood in Croatia" - which is to say it is very-well understood and not sanctioned. Confiscation of illicit enrichment amassed by public officials and their cronies based on the reverse burden of proof could serve as the first step in resolving past political corruption cases and effectively deterring future crimes.

Devoid of the rule of law, protection of property rights, an independent judiciary and clear separation of powers, it is impossible for Croatia to effectively wage war against political corruption and organized crime.

Nearly €4 billion of EU taxpayer funds are being prepared as a hand-out for Croatia's politicians to spend when the candidate country joins the EU. Brussels is sending an unconditional €472 million in pre-accession aid to Croatia. Funds would be better used by deploying visiting judges and prosecutors from countries with a strong rule of law tradition to assist in creating Croatia's independent judiciary. Strict monitoring mechanisms applied in Croatia - similar to those established for Bulgaria and Romania should help ensure Croatia's irreversible transition to a rule of law nation.

As long as the EU sends assistance funds which will total in the billions of euros, Brussels' leaders have an obligation and fiduciary responsibility to require what is best for EU member state taxpayers and honouring Croatia's citizens yearning for real reforms.

In turn, Croatia's politicians must be required to demonstrate responsible conduct and provide accountability for EU taxpayer funds spent on the prolonged reform process. This must be verified by independent sources and not politicians' parochial interests.

Natasha Srdoc and Joel Anand Samy are co-founders of the Adriatic Institute for Public Policy in Rijeka, Croatia

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

Weber: Six proposals in wake of Spitzenkandidat process

I will not lament the decision-making process that resulted in a package deal on the new leadership in Europe. I respect this result, which was in accordance with the treaties and therefore not undemocratic, albeit unsatisfactory.

Time to pay attention to Belarus

Belarus may be hosting the European Games, but Vladimir Putin is not playing games when it comes to Belarus' independence. The West needs to get serious as well.

Libyan lawyers: EU is complicit in torture

While an end to detention is necessary, particularly for those intercepted at sea and returned to centres, this alone will not make Libya a safe country. No one should be returned to Libya until the rule of law is restored.

My vision for the upcoming Ukraine-EU summit

Former Ukraine president Petro Poroshenko writes on the prospects for Monday's EU-Ukraine summit - the first under his successor Volodymyr Zelenskiy, and against a backdrop of ongoing Russian aggression

Cohesion funds alone won't fix EU 'brain drain'

Internal movement will cause a radical reshuffling of the EU population by 2060 unless trends moderate. Under current conditions, dramatic population reductions await Romania (-30 percent), Croatia (-30 percent), and Lithuania (-38 percent) among others.

Six takeaways on digital disinformation at EU elections

For example, Germany's primetime TV news reported that 47 percent of political social media discussions were related to the extreme-right AfD party, when in fact this was the case only for Twitter - used by only four percent of Germans.

Stakeholders' Highlights

  1. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  2. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  3. Nordic Council of MinistersNo evidence that social media are harmful to young people
  4. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  5. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  6. Nordic Council of MinistersEducation gets refugees into work
  7. Counter BalanceSign the petition to help reform the EU’s Bank
  8. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  9. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  10. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  11. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  12. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North

Latest News

  1. Von der Leyen faces gender battle for commission posts
  2. EU proposes yearly rule-of-law 'reviews'
  3. Poland 'optimistic' despite new EU law checks
  4. What did we learn from the von der Leyen vote?
  5. Is Golden Dawn's MEP head of a criminal organisation?
  6. Finland rejects call to end sponsorship of EU presidency
  7. MH17 five years on: when will Russia be punished?
  8. EU commission has first-ever woman president

Stakeholders' Highlights

  1. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  2. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  3. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  4. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  5. Nordic Council of MinistersNordic commitment to driving global gender equality
  6. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  7. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  8. Nordic Council of MinistersNordic talks on parental leave at the UN
  9. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  10. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  11. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  12. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership

Stakeholders' Highlights

  1. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  2. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law
  3. UNESDASoft Drinks Europe welcomes Tim Brett as its new president
  4. Nordic Council of MinistersNordic ministers take the lead in combatting climate change
  5. Counter BalanceEuropean Parliament takes incoherent steps on climate in future EU investments
  6. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  7. Nordic Council of MinistersSeminar on disability and user involvement
  8. Nordic Council of MinistersInternational appetite for Nordic food policies
  9. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  10. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups
  11. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”
  12. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit

Join EUobserver

Support quality EU news

Join us