Guy Norton in Zagreb -

For a country famous as one of Europe’s favourite sun-drenched Technicolor summer hangouts, on January 11 Croatia managed to deliver one of the continent’s dreariest, albeit closest fought, political contests on an overwhelmingly grey and cloudy wintry day. More interesting, though, is what the result says about the parliamentary elections set for the end of this year.

Incumbent centre-left President Ivo Josipovic – dubbed the ‘Frozen Squid’ by his political opponents by virtue of his lacklustre character – narrowly failed to fight off the challenge from an equally dull centre-right candidate in the shape of Kolinda Grabar Kitarovic, who had been dismissed as a ‘Stepford wife’ candidate by her detractors. Grabar Kitarovic edged the presidential runoff with around 50.4% of the vote, succeeding in becoming the first female president of this troubled former Yugoslav state, which has been mired in economic recession since the end of 2008.

The face-off between one-time legal professor Josipovic and career diplomat Grabar Kitarovic failed to deliver much excitement. The presidential role has little influence over the running of a country that since its entry into the EU in July 2013 has singularly failed to deliver a riposte to critics in Western Europe that the enlargement of the EU into the Balkans has been anything but a misguided venture.

Nevertheless, in her victory speech Grabar Kitarovic sounded a defiant note, claiming: “First of all I would like to say that when I entered into this fight I was constantly hearing how I was going to lose, but I knew that I would win. In the same way I will win for Croatia. Croatia will be among the most developed countries of the EU and the world, I promise you.”

The new president will be sworn into office on February 19 and it is expected that as the candidate of the main opposition Croatian Democratic Union (HDZ) party she will adopt a much more critical attitude towards the ruling centre-left coalition government, which supported Josipovic’s candidature. 

Omens

Arguably the most fascinating aspect of the presidential race concerns the pointers it gives for the likely outcome of the much more important parliamentary elections scheduled to take place at the end of this year. As such, the result delivered a welcome fillip for the opposition HDZ, which has spent the last three years putting together a right-wing grouping of parties in the hope of defeating the incumbent centre-left government in December.

For Prime Minister Zoran Milanovic’s Social Democratic Party (SDP), which is the major partner in the serving four-strong coalition government, Josipovic’s defeat, albeit by the narrowest of margins, is yet another warning sign that it will have to up its political game if it is to avoid a much more serious electoral defeat later this year.   

In the run-up to the January 11 presidential poll, senior members of the government attempted to rally support for Josipovic with a high-profile press conference that sought to highlight its economic achievements and denigrate those of the previous HDZ-led government, which lost power at the end of 2011.

Deputy PM and minister of regional development and EU funds, Branko Grcic, highlighted the fact that despite Croatia remaining in recession – GDP is forecast to have shrunk by around 0.5% in 2014 – there is evidence of the first green shoots of recovery. Industrial production has begun to rise for the first time since 2008, while the country is beginning to reap the benefits of its EU membership, with Croatia withdrawing €87mn more than it paid into the EU budget in 2014.

While Grcic acknowledged that the heavily indebted construction sector remains a drag on economic growth – some 70% of all bad debt in the country’s banking sector is related to the property market – he claimed that Croatia is now on a much sounder economic footing than when the current government came to power in December 2011. “Croatia's economy has been successfully reconstructed from a rentier one to one based on exports,” claimed Grcic, pointing to a near 13% uptick in exports in 2014.

For his part, Economy Minister Ivan Vrdoljak claimed that with tenders for oil and gas exploration off Croatia’s Adriatic coast and the planned construction of a liquefied natural gas terminal on the island of Krk, the current government had laid the ground for Croatia to become a major energy player in Europe, while it had also managed to save its domestic shipbuilding industry from bankruptcy. “Croatia is one of the few European countries that on the eve of joining the EU have saved their shipbuilding industry,” Vrdoljak said. "This is primarily thanks to this government."

There was also an upbeat message from Tourism Minister Darko Lorencin, who noted that Croatia continues to attract growing numbers of visitors, despite a year characterised by unsettled weather at home and economic uncertainty abroad. “Tourism is the most stable sector of the Croatian economy and the upward trend in the sector continued last year, in which the number of arrivals increased by 5% and the number of overnight stays rose by 2% compared to 2013.”  

In the most blatant piece of electioneering on behalf of his party colleague Josipovic, the business minister, Gordan Maras, launched a blistering attack on the HDZ’s record of support for entrepreneurs when it was in power. “50,000 businesses and companies in this country collapsed into a black hole called the HDZ, while we have in turn created 44,000. It was an incompetent, improper and partially corrupt government,” Maras said.  

Such strong words of criticism however proved ultimately insufficient to defeat the electoral challenge posed by Grabar Kitarovic, whose promise of a better tomorrow proved just enough to win the day amid the still largely grim economic realities in Croatia.