New Croatian government must tackle structural malaise

Subject

Croatia's new government.

Significance

Following early elections in September, the Croatian Democratic Union (HDZ) and the Bridge of Independent Lists (Most) have agreed to form a new, centre-right coalition under the premiership of Andrej Plenkovic. While the basic composition of the new government remains the same as the last, the present coalition has eschewed its predecessor's nationalist and protectionist bent in favour of political and economic liberalism. Croatia has thus embraced European conventions at a time when the EU's policy prescriptions are being widely challenged in much of Central-Eastern Europe (CEE).

Impacts

• The new government has a rare opportunity to enact meaningful fiscal and structural reforms vital to Croatia's long-term economic viability.
• Promised reforms to the commercial environment could make Croatia a more attractive place for foreign investors to establish operations.
• The election of a mainstream, pro-European government will momentarily arrest the CEE-wide trend towards political and economic nationalism.