Croatia: HDZ may win Apr 17 general election, but face challenges with forming government
Metodi Tzanov
Helping finance professionals understand what is going on in Emerging and Frontier Markets
Croatia is heading for an early general election on Apr 17, three months ahead of term. The last general election was held on Jul 5, 2020 - as the parliament was inaugurated on Jul 22, 2020, the next elections should have been held on Jul 22, 2024 or earlier. While ruling HDZ chairperson and PM Andrej Plenkovic explained that he wanted the elections to be held earlier in order that the summer is calm and the winner is able to form a government in a timely manner, we think that he hurried with the general election to be held before the EP elections due on Jun 9 as HDZ usually does not perform very well at the European elections.
All opinion polls indicate that HDZ is to win the elections, but it may face difficulties with forming a new government as its support may decline due to the numerous scandals the party and its ministers faced during the party's two governments. At the same time, its support should remain high on the number of achievements of the two HDZ-led governments - entry into the euro and the Schengen areas, Croatia attaining investment grade ratings by the three main rating agencies, wage hikes and support to pensioners, as well as robust economic growth despite the corona and the energy crisis thanks to the resolute and obviously adequate measures worth nearly EUR 8bn in support of households, the vulnerable citizens and firms.
At the same time, the new coalition 'For a Better Croatia' of nine left-liberal parties led by the main opposition party SDP, may lure more voters, especially in view of the fact that the most trusted politician, President Zoran Milanovic, is to join SDP slate (if the Constitutional Court decides this is in line with the law) and vie for the premier's post. Still, Milanovic's decision to run in the election is not only wind in the back of the opposition that stood almost no chance of winning, but also a risk - note that most constitutional experts, some of the parties that are part of the SDP-led coalition as well as majority of Croats in recent Ipsos poll, say he should have first stepped down as president. Milanovic refusing to do so may hurt his credibility, respectively, the coalition's chances to win the elections. Overall, the coalition pledges to end the era of corruption of the HDZ governments and higher incomes, but it is doubtful whether it would survive until the elections and how it would manage to draw an election programme given the different views on many issues of its members.
In any case, as neither party or coalition is expected to win an outright majority, a coalition government with smaller parties is almost certain. HDZ has already announced it would continue to cooperate with its current coalition partners.
HDZ's victory in the elections would imply continuation of the current drive of responsible fiscal policy, including reducing budget deficit and maintaining the general government debt on a downward path, supporting the vulnerable groups of the population, among others. These commitments, which are unlikely to change, would support the country's sovereign ratings and enable Croatia to borrow at favourable costs, but also secure even faster economic growth while keeping public finances on track. At the same time, the SDP, i.e. its 'For a Better Croatia' coalition, if winning the election and forming the future government, would relax the fiscal policy in order to provide across-the-board social assistance and raise incomes, which would result into renewed worsening of the fiscal metrics and may risk even ratings' downgrades; moreover, such a grand coalition would be rather unstable and may hurt the government performance, we think.
POLITICAL PARTIES AND COALITIONS
Politicians have created a number of smaller coalitions, which, as usual for the parliamentary elections in Croatia, are to dilute votes away from the two front-running political entities. This will make it impossible the formation of a one-party majority government, meaning that the election winner will have to seek for several partners supporting it in order to be able to form a government. The above creates prerequisites for long and difficult government formation negotiations.
CROATIAN DEMOCRATIC PARTY HDZ (senior ruling party since 2016) and partners
The Croatian Democratic Party HDZ led by PM Andrej Plenkovic, former diplomat and member of the European Parliament, is a centre-right conservative party that came to power in January 2016 after the inconclusive elections in November 2015. In the general election on Jul 5, 2020, five months earlier than the regular term, HDZ marked a strong victory over the SDP-led Restart Coalition, which had previously been leading in opinion polls for several weeks prior to the elections, winning 37.26% of the vote or 62 seats in the 151-seat parliament (up by 5 MPs as compared to 2016 elections, and formed ruling majority with the ethnic-Serb party SDSS that won 3 MPs). The HDZ-led government is also supported by two MPs from the Croatian Social Liberal Party HSLS, one MP from the Croatian Demochristian Party HDS, one MP from the Croatian People's Party - Liberal Democrats HNS-LD, and by two independent MPs. Following creation of opposition coalition HDZ announced cooperation with HSLS and HDS in some of electoral districts. HDZ leader Plenkovic has also said that the party will cooperate in the elections with its current coalition partners.
Independent Democratic Serb Party SDDS (supporting government)
Independent Democratic Serb Party SDDS was formed in 1997 to represent Serbs living in Croatia. In the 2016 and the 2020 general elections, the SDSS also held all of three Serb national minority seats in the parliament, continuing to support the government of the HDZ.
Croatian Social Liberal Party HSLS (supporting government)
The HSLS, led by Darinko Kosor, is a conservative-liberal party formed in 1989 as the first Croatian political party formed after the reintroduction of the multi-party system. HSLS first won the elections in 2000 and formed a coalition government with four other parties, including the largest party of the Croatian centre-left, the SDP. In the 2020 general election if won two seats.
Croatian Demochristian Party HDS (supporting government)
The Croatian Demochristian Party HDS was formed in 2009 from three former Christian Democratic parties - Croatian DemochristianS HD, Croatian Christian Democratic Party HKDS and Party of Croatian Renaissance SHP. It wants Croatia will become a state with Christian ideals.
Croatian People's Party - Liberal Democrats HNS-LD (supporting government)
The People's Party-Liberal Democrats HNS, a centre- to centre-left party and a traditional ally of the SDP, has been part of the HDZ-led government first government (after the 2016 general election) since 2017 after Most party left the coalition and is also supporting the second government of HDZ. It ran alone in the 2020 elections winning only one seat in the parliament but continued to back the government.
HDZ's Platform
HDZ has not yet presented its election programme but relies on its success over the past more than seven years on the economic front - remedying public finances, reducing public debt, accession to euro and Schengen areas, upgrades of Croatia's sovereign ratings to investment grade, Croatia enjoying favourable debt financing costs on international markets, strong wage and economic growth. The nearly EUR 8bn worth of support packages during the COVID and energy crises, including the latest package for pensioners and households to cope with still high energy prices, are also supportive to its ratings. The party is also bragging itself for the carried out new tax reform that is said to have reduced the tax burden on the economy and allowed for raising the incomes of the population. The recent wage reform ensuring equal pay for equal work across the public administration and in the civil services is also positive for the party's support. Plenkovic promised that if the HDZ won the trust of the voters, it will strive to ensure the continuation of stable GDP growth in order to reach 80% of the average level of development of the EU, average monthly net salary to EUR 1,600 and the minimum gross salary to EUR 1,250 by the end of mandate, place in kindergarten for every child in Croatia, investing more than EUR 2bn in educational infrastructure, raising GVA in agriculture by EUR 2bn, 20% increase in pensions in the next four years, among others.
At the same time, PM Plenkovic changing 30 ministers during his two governments, usually due to scandals around the individual ministers and Plenkovic sacrificing them to keep the government intact, is a drawback. Plenkovic recent disputable decisions such as the appointment of High Criminal Court Judge Ivan Turudic, who is suspected in relations with criminally investigated people, as State Attorney-General, as well as the amendments to the Penal Code, which are deemed to limit the media freedoms, may cost the party voters' support.
SDP-LED COALITION 'FOR A BETTER CROATIA'
The nine parties in the coalition - they were originally ten but Workers' Front (1 MP) decided to leave the coalition over Milanovic's candidature for premier and his policy against workers before, together have 24 MPs in the parliament.
Social Democratic Party SDP (opposition)
The senior opposition SDP is a centre-left party, which has been in opposition since November 2015 after its then 'Croatia is Growing' coalition (also comprising HNS, HSU, Hrvatski Laburisti, Authentic Croatia Peasant party, Zagorje Party) won only 56 seats in the parliament and failed to agree with Most party on a support to a SDP-led cabinet. In the 2020 general election, the SDP-led Restart Coalition won only 41 MPs, whereas SDP only 32 MPs (down by 7 compared to the previous elections). SDP's is headed by Pedja Grbin, who appeared a weak leader - 17 MPs of the party left it to form the Social Democrats and further 4 MPs left the party and became independent legislators. Initially, Grbin, after forming a 'For a Better Croatia' coalition with Focus, the Istrian Democratic Party (IDS), the PGS regional party, the Reformists, the Centre, the Workers' Front (it already left the coalition), the Party with the Name and the Surname, GLAS and the Croatian Peasant Party (HSS), was the SDP's, respectively, the coalition's nominee for premier. However, acknowledging that he has not strong standing and is criticised by many, Grbin agreed not to vie for the premier's post - instead, President Milanovic, who will run as independent candidate on SDP's slate, if the Constitutional Court allows, is the party's candidate for Prime Minister.
Croatian Peasant Party HSS (opposition)
The HSS defines itself as a centre-left party, though it remains conservative on the social side. It is led by Kreso Beljak. In the 2020 parliamentary elections the party won only two seats, down from 5 in the 2016 elections.
Istrian democratic assembly IDS (opposition)
The Istrian Democratic Assembly IDS, founded in 1990 by writer Ivan Pauletta and currently headed by Dalibor Paus, is a centre-left, regionalist, liberal party primarily operating in Istria County. IDS embraces principles of respect for human rights and freedoms, regionalism and historical characteristics of Istria, protection of private property and anti-fascism. The party advocates decentralisation of Croatia, further development of the Adriatic Euroregion and the establishment of a transnational and cross-border euro-region encompassing the whole of Istria.
Focus?(opposition)
Focus, led by Davor Nadji, is a minor political party founded in March 2020 by independent politicians and entrepreneurs from the Zagreb County area. The party is centre to centre-right advocating lower taxes and regulatory burdens, fewer employees in the government administration with increased efficiency, transparency and the introduction of digital transformation, adapting to climate change through the concept of a green economy based on innovation and investments in infrastructure. Focus first participated in the 2020 general election in coalition with SIP (led by Dalija Oreskovic) and Pametno, with the alliance winning three seats in the Sabor, one each.
Centre?(opposition)
Centre is a liberal political party formed under the name Pametno in 2015 out of the citizens' initiative Za pametne ljude i pametan grad ('For smart people and a smart city'). It advocates promotion of democracy, accountable and transparent management of public resources, civil proactive protection of fundamental human rights, economic development and environmental protection. The party's priorities are structural reforms, education and science. In November 2020, the party Pametno changed name to the Centre. It has 1 MP in the parliament.
Glas?(opposition)
领英推荐
The Civic Liberal Alliance Glas is a liberal party founded by four former Croatian People's Party HNS MPs led by Anka Mrak Taritas who were dissatisfied with HNS entering a coalition with the HDZ and supporting the cabinet of Andrej Plenkovic since June 2017. It defines itself as a modern, progressive, trans-ideological party in the centre-left, acceptable to people who are liberal, social-liberal and social-democratic; it focuses on individual freedoms and rights, stable institutions and diversity as a comparative advantage. It has 1 MP in the parliament.
People's Party - Reformists NS-R?(opposition)
Reformists is a liberal political party established as a civil initiative by former HNS chairperson Radimir Cacic and his associates Natalija Martincevic and Petar Baranovic in 2014. More than two-thirds of the party members are former members of the HNS who left the party because of disagreements with its leadership over the exclusion of Radimir Cacic from the party while he was serving a prison sentence for unintentionally causing a traffic accident with two fatalities. It has 1 MP in the parliament.
Party with Name and Last Name SiIP?(opposition)
The Party with a First and Last Name SiIP was a party founded by Dalija Oreskovic in December 2018. In October 2018 Oreskovic announced the formation of a centre party START standing for Party of Anti-corruption, Development and Transparency. In May 2020, the START changed its name to Party with a First and Last Name (SsIP), and Oreskovic stepped down from the position of party president. Ivan Kovacic was elected as the new leader of the party. In the 2020 general election, she was elected for MP. In November 2020, the party merged with the Pametno to form a single party, called the Centre.
Alliance of Primorje-Gorski Kotar PGS regional party?(opposition)
The Alliance of Primorje-Gorski Kotar PGS is a minor liberal regionalist political party of Primorje-Gorski Kotar County. They formerly had one representative in the parliament in an alliance with the Croatian People's Party. The party originated from the city of Rijeka under the name of Rijeka Democratic Alliance. After winning a seat in 1992 elections, the party expanded its activities to the rest of Primorje-Gorski Kotar County and changed the name accordingly.
For a better Croatia coalition's platform?(opposition)
The coalition still has not presented its programme. Yet, SDP has been pledging higher salaries and pensions, abolishing corruption created by HDZ in state institutions. Overall, even if the SDP-led coalition wins sufficient seats in the parliament to form a majority government, such a cabinet will be hardly manageable and will face difficulties with meeting its pledges, we think.
SOCIAL DEMOCRATS?(opposition)
The Social Democrats is a centre-left political party founded in 2022. The party was preceded by a parliamentary group of the same name that broke away from the SDP in October 2021. The party stated they will not go against the initiatives of HDZ that benefit the citizens, and that they do not have plans to be obstructive. It has 18 MPs in the parliament.
MOST (opposition)
The Most (Bridge) party, previously known as Bridge of Independent Lists until November 2020, is centre-right to right-wing party founded in 2012 and led by Bozo Petrov. Although the party leaders initially avoided ideological topics, Most underwent through a rebranding prior to the 2020 general election and established itself as a social conservative party. The party has been advocating fiscal responsibility, a reduction of government spending and public debt, tax cuts, reforms in the public sector, reducing the administrative divisions in the country. In principle, it is in favour of an expansionary monetary policy for supporting economic growth, of private healthcare entry. It has 8 MPs in the parliament. For the 2024 elections, the party entered a coalition with the Croatian Sovereignists - Most member Nikola Grmoja is to be the coalition's candidate for premier.
HOMELAND MOVEMENT DP (opposition)
Homeland Movement is conservative right-wing party formed in February 2020 by pop singer and unsuccessful presidential candidate Miroslav Skoro - he resigned as party president due to a dispute over party finances in July 2021, which was followed by disciplinary proceedings against Skoro and his sister. It is currently led by Ivan Penava. DP is considered conservative, populist and nationalist. The party competed in the 2020 parliamentary election in a coalition with several other minor right-wing to far-right parties, including the Croatian Conservative Party, Croatian Growth and Bloc for Croatia. The party is in favour of the EU and the Schengen Area but was opposed to the euro introduction. In 2022, the party expressed support for Ukraine, but was opposed to allowing military training of the Armed Forces of Ukraine in Croatia. It currently has 5 MPs in the parliament, down from 11 when the parliament was formed after the elections in 2020.
MOZEMO! POLITICAL PLATFORM (opposition)
Mozemo! (We Can!) is a left-wing, green political party formed by local green and leftist movements and initiatives in order to act on the national level for the EP and the general elections. The party originated first as the initiative committee consisting of 26 activists and left-wing. The party was officially founded in February 2019, prior to the EP elections held that year, stating its primary areas of interest being better education, better health policies, social and gender equality, support for migrants, renewable sources of energy, and sustainable agriculture. The founding assembly defined that the party does not have an official chairperson, but instead has two coordinators - from among the members, Sandra Bencic (who is currently the party's candidate for premier) and Teodor Celakoski were elected. Zagreb Mayor Tomislav Tomasevic is also a member. It currently has 4 MPs in the parliament. It is negotiating with SDP on joint slates in some constituencies. In the campaign, they will deal with concrete problems of retirees, youth, salaries, etc., and not with defamation, spins, and bickering. The party announced 13 concrete moves aimed to save Croatia, among which removing Turudic from post of State Attorney-General, building apartments for public rent, taxing extra profits of banks, retailers, civil education, support for farmers, free abortion.
CROATIAN SOVEREIGNISTS?(opposition)
The Croatian Sovereignists is a conservative and Christian right-wing party founded in 2019 and led by Marijan Pavlicek. In 2020, the party entered the Sabor in a Homeland Movement-led coalition. As of 2021, the Croatian Sovereignists have four MPs in the Sabor. In October 2021, a unification assembly was held, during which it was announced that three smaller conservative and right-wing parties - Croatian Conservative Party, Hrast-Movement for Successful Croatia and the Generation of Renewal, will become defunct to merge and work together as the Croatian Sovereignists. For the 2024 elections, the party entered a coalition with Most.
DETERMINATION AND JUSTICE OIP?(opposition)
Determination and Justice OIP is right-wing to far-right party having one MP in the parliament - its leader Karolina Vidovic Kristo.
WORKERS' FRONT RF (opposition, originally it was part of the SDP-led coalition?For a better Croatia)
The Workers' Front RF is a democratic socialist and progressive political party formed in May 2014 as a political initiative of workers, trade unionists, unemployed, and students. It supports anti-clericalism, anti-fascism, antimilitarism, eco-socialism, labour rights, progressivism, and socialist feminism. It has 1 MP in the parliament. The party's focus is reindustrialisation, shipbuilding, farming; it wants to raise living standards and ensure higher pay and pensions via changes to the structure of the economy. The party also wants to push for higher taxes on wealth. The party was originally part of the SDP-led For a better Croatia coalition, but decided to leave it after SDP head Grbin decided that President Milanovic will lead SDP's slate in Constituency 1 and will vie for premier's post - the party said the latter was unacceptable as Milanovic had anti-workers policy while being premier before.
CROATIAN PARTY OF PENSIONERS HSU (not in parliament)
The Croatian Party of Pensioners HSU is a centre-left party that is currently led by Veselko Gabricevic. The party participated in the Kukuriku coalition since 2011. It continued with the coalition Croatia is Growing at the 2015 parliamentary election. Currently it is not represented in the parliament.
OPINION POLLS
All polls so far indicate that the HDZ is to win the elections over the SDP. Plenkovic and the government seem to continue to be trying to 'buy' votes by further support packages, something advised against by the EC, which suggests that the premier is not that confident in the election victory given the numerous scandals in the past nealry eight years of his rule. Moreover, the SDP forming coalition with other nine left-liberal parties and President Zoran Milanovic, the most trusted politician, joining SDP slate as independent candidate and vying for premier's post may eventually oust HDZ from power. If the SDP-led coalition does not fall apart given the divergencies among the parties composing it and offer a realistic, plausible alternative to people, the HDZ may face difficulties with forming a majority ruling coalition and remaining in power, in our view.
Note that a?poll by Promocija Plus?carried out over 1,000 respondents on Mar 8-11 and commissioned by several left-centre parties has shown that a coalition of the left and the centre, which would include the parties Centre, Focus, Dalija Oreskovic's SsIP, Reformists, Glas and HSS in addition to the SDP, i.e. a coalition without the Workers' Front, can count on the support of 21.6% of the voters. At the same time, ruling HDZ and its partners - HSLS, HNS, HDS and HSU, can count on the support of 26.8% of voters. The survey showed that if HDZ ran alone in the elections, it would be supported by 26.6% of the voters, while SDP along - by only 17.8%.
LEGISLATIVE BACKGROUND
The Croatian parliament (Sabor) is unicameral and has between 100 and 160 members elected through a direct vote for four years. In the Apr 17 elections, 151 representatives will be elected, 140 from 10 electoral units (each giving 14 seats as they have a broadly equal number of voters), eight will represent national minorities, whereas three for Serbs, and three will be elected by expatriate voters. Parties must get 5% of the vote in an electoral unit in order to be eligible for parliamentary representation, meaning that a party may be represented in parliament even if it scores well below 5% nationwide but has strong regional support. Candidates are selected using the most open list system for candidates getting at least 10% of the party's votes, while the others are chosen according to their ranking on the list.
In the upcoming elections, about a fifth of voters will change the constituency in which they voted before as last fall the parliament adopted a new law on constituencies, which does not change the existing electoral system, but to a certain extent changes the maps of constituencies to respect the Constitutional Court decision and ensure that each vote weights equally. The biggest change is in Zagreb, which, instead of four, is divided into three constituencies and now falls under the first, second and sixth constituencies.
About 3.8mn eligible voters will be able to cast ballots on Apr 17. Elections for the parliament abroad will be held at Croatian diplomatic and consular missions abroad on Apr 16 and Apr 17. After the parliament dissolved itself on Mar 14 and on Mar 15 President Zoran Milanovic called general election for Apr 17, political parties and candidates have 14 days as of Mar 16 or by midnight on Mar 29 to submit their lists of candidates to the State Election Commission DIP. DIP then will have 48 hours until midnight on Mar 31 to release valid slates and candidates, which ushers in the electioneering period. Electioneering will end at midnight on Apr 14, when the pre-election silence enters into force ahead of election and continues until polling stations close at 19:00 CET on election day on Wednesday, Apr 17. The turnout in the July 2020 general election was 46.44%, down from 54.62% in the September 2016 early general election - we expect it to be higher this year as the elections are to be held in the middle of the working week, not on Sunday as usual. DIP should publish official results within two weeks of the election day, though preliminary incomplete results will become gradually available after polls close during the election night.