Croatians divided over EU accession

Zagreb, Croatia – As Croatia prepares for its accession to the European Union on Monday, many in the capital say they are hopeful the move will revive a moribund economy, but others aren’t optimistic ordinary citizens will benefit.

Croatia’s capital recently hosted a volunteer week to encourage people to get involved with groups that assist those in need.

In Strossmayer Park, a band in colourful traditional dress belted out Croatian songs, cheered on by a crowd of about 200 onlookers. Along the park’s well-maintained walkways were wooden stalls belonging to a raft of volunteer-based organisations, from associations representing lesbian, gay, bisexual, and transgender teenagers, to photography classes for the elderly.

Strossmayer Park, near Zagreb’s centre, is named in honour of Josip Juraj Strossmayer. A prominent 19th century Roman bishop, Strossmayer firmly believed that all the southern Slav nations in Europe should be unified – a dream eventually realised after his death with the creation of Yugoslavia.

I am glad we are joining the European Union, not because I think it is very great, but because I don’t think we have any other options. It would be worse without the European Union.Tajana Stamenkovic, psychology student

In the 1990s, Yugoslavia disintegrated in violence and ethnic conflict, leading to thedeaths of more than 100,000 people, and the displacement of hundreds of thousands of others. The wars also led the the country’s break-up. Now Croatia is set to join once again in a political union, this time not with its Slavic neighbours but its European cousins.

On Monday Croatia becomes the European Union’s 28th member, after two-thirds of Croatians voted “yes” in a referendum on joining the bloc. Among those in Strossmayer Park, opinion was divided on what life in the EU might bring for the Balkan state.

“I am glad we are joining the European Union, not because I think it is very great, but because I don’t think we have any other options. It would be worse without the European Union,” said psychology student Tajana Stamenkovic, a volunteer at an association dedicated to helping young people with behavioural problems.

Young people, many of them jobless graduates for whom volunteering is the only way to gain experience, man most of the stands in Strossmayer Park. In Croatia, unemployment is about 18 percent, according to data released by Eurostat in April. Among the under-25s, more than half are without a job.

Unemployment woes

“You have people with academic degrees, with masters degrees, and they can’t find any work,” said another volunteer, Vanja Pavlovic. “If you want to work you have to volunteer for no money, and after you finish your year of volunteering you have have no job for at least five to 10 years. It’s horrible.”

Like many young Croatians, Pavlovic wants to leave the country to find work abroad.

Dejan Jovic, a lecturer in politics at Zagreb University, described unemployment among the young as “the biggest problem” facing Croatia.

Jovic said he envisages some initial economic challenges as Croatia leaves the Central European Free Trade Agreement (CEFTA) – a trade bloc with various non-EU states, including former Yugoslav republics Serbia, Bosnia, Montenegro and Macedonia.

But he said he believes membership in the European Union will ultimately lead to increased investment, economic growth, and eventually jobs.

A Croatian war veteran holds a sign with pictures of former generals Ante Gotovina (L) and Mladen Markac [AFP]

“In the long term, we hope to be beneficiaries of the new situation, in which it should be easier to become part of a large European market. The main Croatian companies have already prepared themselves for leaving CEFTA. So we expect some initial set-backs in terms of export to these countries, but on the whole the impact will be positive,”Jovic said.

Europe ‘slowing down’

Not everyone is as hopeful about Croatia’s future in the European Union. Mihelin Ninoslav is a former drug addict now volunteering at an outreach programme for people with substance abuse issues. He said he sees little value in Croatian EU membership.

“I am a sceptic,” said Ninoslav. “Young people want a better life in Europe, but Europe is slowing down. It’s not like a couple of years ago. Before I was in favour [of Europe], but not now.”

The ongoing economic crisis in the eurozone is a concern, as is a fear that Croatia, which only became independent in 1991, could lose some of its identity. “It is not for me, Croatia is Croatia, it is not Europe,” said Ninoslav.

But professor Jovic said worries about the country losing its cultural identity are misplaced. “This has not happened to others, and thus it will not to Croatia either. These fears are part of conservative view on what makes ‘national identity’. Basically, this is fear for tradition.”

Croatian support for joining the EU remains reasonably strong. An opinion poll conducted this month found 61 percent in favour of membership. Most people “accept that membership in EU is good for Croatia, since it will mean more freedom, more security, and the end of a complicated transition from the 1990s”, Jovic said.

But he also noted it remains to be seen how the transition will benefit people here. “Research on Euro scepticism in Croatia shows that they are not sure whether they will personally live better or worse, since there is uncertainty over prices and increased competition for jobs. This is the biggest fear some people have.”

Healing the past?

European Union membership could also provide an opportunity to heal some of the festering wounds from the chaos that tore Yugoslavia apart two decades ago. Relations with neighbouring Serbia, with whom Croatia fought a brutal war, remain strained. Ethnic Serbs make up about four percent of Croatia’s population of 4.4 million.

“Croatian accession to the EU will improve the position of Serbs,” said Nataša Kandi, a human rights activist and the founder of the Humanitarian Law Center, an organisation campaigning for reconciliation in the former Yugoslavia.

Minorities will have more mechanisms to exercise their rights, the Serbs to return the property, and Roma will have more access to the public good.Nataša Kandi, founder of the Humanitarian Law Center

The European Union’s legal frameworks will make it easier for the 200,000 ethnic Serbs who were forced to leave their homes in Croatia during the conflict to reclaim property, said Kandi. It will also improve the situation for other minorities who regularly face discrimination, such as the Roma.

“Minorities will have more mechanisms to exercise their rights, the Serbs to return the property, and Roma will have more access to the public good,” said Kandi.

Joining the European Union has been portrayed as a pivotal moment in Croatia’s post-Yugoslav history marking the country’s transition from war and ethnic strife to peace and stability.

But not everyone agrees with this line of thinking. Sreko Horvat is a Croatian philosopher and the director of the Subversive Forum, an annual anti-globalisation, pro-peace conference held in May in Zagreb.

“From this perspective, Croatia is just a part of the Balkans, the mythical space where neighbours just can’t wait to kill and rape each other, and by joining the EU, Croatia will become a ‘stabilised’ and ‘civilised’ country,” said Horvat.

“The problem is, of course, that the EU is already ‘balkanised’. It is enough to look at Switzerland where the mosques are banned, or to France and its protests against gay marriage. Look at Greece where the public TV was just shut down, or Ireland where you even have drones surveilling protesters against the G8. These are the problems Croatia will face soon as well – not to mention even higher unemployment.”

Horvat also expressed concern about a deepening of Croatia’s already-advanced privatisation process. But he said there could be some unintended benefits with greater European integration.

“Maybe the only good thing with Croatia’s entrance to the EU is precisely the possibility of more cooperation between different progressive movements all around Europe, because we are all in this together,” said Horvat.

This piece originally appeared on Al-Jazeera.

Slovenia prepares for summer of discontent

Ljubljana, Slovenia – In Slovenia, few traits are as highly prized as gospodariti, literally the ability to manage finances prudently. Gospodariti was often cited to explain Slovenia’s emergence as an industrial motor of Marshal Tito’s Yugoslav system during the Cold War. As Yugoslavia collapsed in bloody fratricide,gospodariti again came to the rescue, helping a newly independent nation of just two million people to fashion a flourishing economy on the edge of a warzone.

Two decades later Slovenia’s cherished reputation for fiscal rectitude has, like the status of its government bonds, been reduced to junk.

On May 29, the European Commission told Slovenia that its heavily indebted banking system would require an independent review. The same report gave Slovenia until 2015 to bring its budget deficit below the European Union threshold of 3 percent of gross domestic product.
ljubljana-slovenia
The Commission also called on Prime Minister, Alenka Bratusek, to push forward with a package of fiscal proposals announcedlast month. These measures include the sale of fifteen publicly-owned businesses, a 2 percent increase in Value Added Tax (VAT) and the creation of a “bad bank”.

Slovenia appears to have staved off the short-term threat of becoming the sixth Eurozone member to receive a bailout — but everything is far from green in this picturesque Alpine state.

Difficult transition

Ljubljana, Slovenia’s compact capital, is peppered with empty apartment blocks and unused retail units. Across the country, emigration is on the rise. Unemployment, historically low even after communism, stands at over 13 percent. Lack of infrastructure investment has terminally weakened a once powerful manufacturing sector.

Slovenia has twice been in recession since 2009. This year the economy is expected to shrink by around 2 percent. Prospects for growth are “weak even in a quite long medium term horizon,” a leading Slovenian economist who spoke on condition of anonymity, said in Ljubljana, the capital. “We have a contracting domestic sector and an exporting sector that is slowly losing momentum.”

When Slovenia gained its independence in 1991 it was by far the most developed of the former communist economies of Eastern Europe. Tito’s 1974 reforms of Yugoslavia’s socialist system helped open the country up, socially and economically. Taking advantage of its industrial workforce and its location between Central Europe and the Balkans, international companies such as Bayer and Renault built factories in Slovenia.

We are now in the state of shock that Slovenia avoided 20 years ago. Maybe our story is proof that you can’t change systems without a shock.

Primoz Cirman, economics writer,

“We had communism which was not as severe as in other countries,” said Primoz Cirman, an economics writer for Dnevnik, a leading Slovenian newspaper daily newspaper. “The fist was not as iron as it was in other countries, it was more mellow.”

In the early 1990s Slovenia’s first generation of post-independence leaders looked to consolidate the country’s economic strength within its borders, rather than follow the privatisation drive in much of Eastern Europe. “For the first time in our history we were the masters of our own property. We thought ‘let’s not waste it, let’s privatise slowly,” said Cirman.

The roots of Slovenia’s current crisis lie in this uneasy transition from socialism to the free market. Many of Slovenia’s best companies remained in the hands of the state and a new generation of ‘managers’. Many of these managerial executives took out huge loans to buy controlling stakes in the businesses they ran.

Slovenian banks relied on the cheap credit that flowed in the wake of joining the European Union in 20004 and, particularly, the Euro currency three years later to fund these managerial buyouts. When the credit crunch hit in 2008 loans stopped performing.

Attempts by Slovenian bank to plug the gap in their finances by tightening lending to the national economy has contributed to the slowdown in Slovenia but not solved the country’s banking crisis. Its two leading banks, Nova Ljubljanska Banka and Nova Kreditna Banka Maribor, are badly in need of recapitalisation. Last month, Nova Ljubljanska Banka’s Chief Executive Officer Janko Medja said that the bank would transfer €1.3bn ($1.69bn) of non-performing loans to the new “bad” bank.

“Slovenia’s problem was not the (global) economic crisis it was the naivety of the banking sector,” said Igor Luksic, a professor of politics at Ljubljana University and president of the opposition Social Democrats. “There was a great appetite for real estate and the great appetite of managers who wanted to buy their companies. That made the crisis of the banking sector.”

‘State of shock’

The crisis has also laid bare the close connections between business and politics in Slovenia. Earlier this year, Prime Minister, Janez Jansa, was forced to step down after a report from a national anti-corruption agency identified irregularities in his tax returns. Ninety-four per cent of Slovenians consider bribes to be a normal practice in business, according to a recent study by Ernst & Young.

It is not all bad news for Slovenia. At 56 percent, public debt is well below the EU average. The Slovenian banking sector is just 1.6 times GDP. There are some success business stories, especially in technology. But with an export-led economy and a paucity of lending at home, there is no end in sight for the Slovenia’s economic travails, despite Wednesday’s cautious green light from Brussels.

“The economy has collapsed. We have a corrupted political class and a managerial system,” said Franc Trcek, professor of sociology at the University of Ljubljana. “People have said that they have enough. At the same time half of the people will go and vote for the old parties. The other half are in apathy.”

On the streets of Slovenia, apathy has given way to frustration. Last autumn, a series of protests broke out over the decision to introduce speed cameras in Maribor, a once prosperous industrial city near the border with Austria. Thousands took to the streets in what became known as the “Maribor Uprising”.

For the first time since Slovenia’s independence from Yugoslavia in 1991, riot police fired tear gas on its citizens. Maribor’s mayor, Franc Kangler, was forced to step down, but not before the protests had spread across Slovenia, contributing to the downfall of the Jansa government in Ljubljana.

The demonstrations have died down, for now, but journalist Primoz Cirman believes they could reignite again. “The fire is out but the fuel is still there,” he said as a summer shower pours down on the outdoor market on Petkovsek Embankment in Ljubljana.

As for Slovenia, Cirman said that the current crisis shows that the country didn’t manage the transition from communism to capitalism as well as it – and the rest of the world – had thought. “We are now in the state of shock that Slovenia avoided 20 years ago. Maybe our story is proof that you can’t change systems without a shock.”

This piece originally appeared on Al-Jazeera