Croatia – Croatia, the War, and the Future

Croatia: Corruption – The Cradle Of Intolerable Filth!

March 4, 2023 by inavukic 12 Comments

_{Left: EPPO Chief Prosecutor Laura Codruţa Kövesi, Top Right: Croatian Prime Minister Andrej Plenkovic and his government ministers among latest indictees for fraud and corruption}

As I wrote last week, there was a motion by Croatia’s parliamentary opposition to recall the Prime Minister Andrej Plenkovic with claims, in particular, that he is, among other things, personally responsible for failing to act in curbing corruption which is relentlessly plaguing the country and failing to effectively address and deal with the devastation caused by the earthquakes in Croatia since March 2020. This attempt to depose the Prime Minister from office was not successful. Andrej Plenkovic survived the no confidence vote in the Croatian Parliament on Friday 3 March 2023.

The 77 against and 56 for the confirmation of no confidence with one abstention and 17 opposition members of Parliament missing in action (did not turn up for voting) in the 151-seat assembly provided a rather clear picture that was expected at this time of political turmoil, economic crisis and living standards uncertainties due to price hikes for food and energy. The governing majority votes favoured Plenkovic as leader and Prime Minister. However, despite the colourful differences in both ideology and policy among the opposition political parties, the parliamentary opposition also rose united as well. Nobody is “crossing the floor” on the matter of Prime Minister’s performance in the above key areas from any side of politics just yet, it seems. But, should the Croatian judiciary act more appropriately and with due and deservingly urgent haste in processing indictments for corruption that occurred in the very heart of Plenkovic’s government, should the judiciary work faster in collecting needed evidence to be tested in court, then anything is possible. Even a catastrophic loss by HDZ in 2024 general elections. In the face of so much corruption, in the face of harsh living standards due to price increases of basic and essential food and other essentials for life, no amount of gloss Plenkovic is painting over the economy will stop the corrosive bitterness and disappointments the voters seem to be expressing every day. Pending the 2024 parliamentary elections in Croatia we are now on a most interesting ride which, God willing, will see increased attacks on the communist mindset polluting the democracy Croatia should be, but is not living.

The European Public Prosecutor’s Office (EPPO) has recently published its 2022 Annual Report. Since its launch in June 2021, EPPO opened offices in 22 EU countries, including a branch in Croatia. Its main purpose is to monitor, track and investigate the expenditure of EU funds given to a country and its successful funds applicant organisations.

On the face and perhaps the substance of EU funds given this has changed the [corruption] situation significantly. One may say that the corrupt habits acquired during the life of communist Yugoslavia that groomed people who wielded political power who perhaps could have exerted influence over local investigators are no longer that powerful for EU money and under EPPO’s rudder. And while Croatia itself has an anticorruption body USKOK (Office for Suppression of Corruption and Organised Crime) attached to the State Attorney’s Office (DORH) as a special operations unit dealing with all except fraud and corruption associated with EU funds attended to by the EPPO, it has been very much like a toothless tiger. Corruption scandals that do not involve EU funds also keep popping up like mushrooms after the rain. I.e., there are still many officials working for the public authorities who think and act as if they are free to do what they please with public funding. This is in part because they think they are untouchable, or because they can pull strings in these bodies, or because they expect membership in a political party will always help them get out of problems, forgive their theft and corruption. The communist mindset still reigns in Croatia, the power is still behind and not in front of the “counter” (with people, with clients, with taxpayers). The ruling political parties since the end of the Homeland War and Serb occupation of Croatian territories in 1998, whether they were HDZ (Croatian Democratic Union) or SDP (Social Democratic Party, viz. former Croatian League of Communists), have all equated themselves as being The State. Communist mindset where the political party in government acts as and considers itself omnipotent, in control of people’s lives!

The most prominent scandal investigated by EPPO over the past year and a half in Croatia included a 1.3 million euros case which led to the indictment of the former government minister for EU funds and high-ranking officials of the ruling conservative HDZ party, Gabrijela Zalac, and three of her associates, in December 2021. Zalac, with the director of the Central Finance and Contracting Agency, Tomislav Petric, and two business owners, was apprehended as part of operation “Software” conducted by the European Public Prosecutor’s Office (EPPO) in Croatia. EPPO’s suspected offences against them included an attempt to award a public procurement operation for a software system to one of the indictees without a public tender, and then rigging the price of a subsequent tender. As the saga of Zalac’s criminal/corruption proceedings advance in Croatia, revealing details that may implicate even the Prime Minister Andrej Plenkovic in shady deals or omissions that may have aided success of fraudulent entries, the ruling party HDZ is shrugging the issues off while the parliamentary opposition unleashed a public outcry saying the affair is a sign of a crisis in government.

Another high-ranking official recently investigated by EPPO is former agriculture minister Tomislav Tolusic, who was detained in July 2022 in an investigation over suspected irregularities over around 600,000 euros in EU funding he spent to equip his privately owned winemaking business. This led to State Attorney’s Office/DORH also filing an indictment against three other former ministers in the government of Andrej Plenkovic/HDZ – Darko Horvat, Boris Milosevic, and Josip Aladrovic, as well as four other suspects in two branches of the investigation launched due to alleged illegalities with dishing out incentives. In addition to the four ministers, USKOK/anti-corruption office also filed indictments against Horvat’s assistant Ana Mandac, former state secretary of the Ministry of Regional Development Velimir Zunac, director of the administration for assisted areas Katica Miskovic and the mayor of Zupanja Damir Juzbasic. Eight defendants are charged with abuse of position and authority, inciting, and aiding in abuse of position and authority, trading in influence and assisting in trading in influence.

If we label corruption as filth, then the governing political parties in the past two decades or so in Croatia have been its cradle! Despite their political ideology and operational differences they all share common ground on not doing much to punish and stop corruption that is prevalent across all public administration sectors.

A large portion of the public in Croatia is currently standing on tenterhooks, waiting to see if Croatian judiciary will drag its feet in processing these indictments until the 2024 general elections are over! That way HDZ Party and Prime Minister can keep playing the innocence cards and keep denying that there is a real problem of corrupt culture in the entire public administration system. Any decent and non-corrupt government, faced with serious indictments with serious crimes of several of its ministers, would have already triggered an independent review of all practices and procedures, instigated checks and balances at all spots and levels of public money receipts and expenditure. Not Croatia, though. As reflex reaction it forms Commissions and on them may sit compromised individuals with shady past and encounter with corruption, at least the political kind!

In 2022 alone, EPPO’s investigations in Croatia led to eight indictments and six court verdicts and to the freezing of some €400,000 in assets. They also received 51 reports and complaints, with more than half (29) coming from local authorities and another 17 filed by individuals. In terms of the type of funding involved, most cases were related to regional and urban development (7), followed by agriculture and rural development (6).

It is both interesting and encouraging that Croatian citizens submitted as many as 162 reports to the EPPO of suspicions of criminal offences that are not actually within the jurisdiction of the European prosecutor’s office. This is the largest number of reports or allegations of fraud the EPPO likely received from any member country. This among other things points to a concerning fact that Croatian p[eople are increasingly frustrated and irritated by the inaction or alarming inattentiveness of the domestic courts and judiciary. Furthermore, this has led to an alarming increase in public expressions of distrust in the Croatian judiciary coupled with consensus that courts are nowhere near being independent of the government as they should be. The fact that Croatian citizens are choosing to report suspicious corrupt activities to the EPPO, even though the subjects of such reports are not within the EPPO’s jurisdiction, does demonstrate a concerning level of desperation within the population in trying to achieve justice and root out corruption.

According to its 2022 Annual Report the European Prosecutor’s/EPPO Office in Croatia is currently investigating fraud associated with 313 million euros tied to its lodging of 23 court proceedings in Croatia last year. That is, last year, EPPO commenced 23 cases of suspected embezzlement of 313.6 million euros if European money in Croatia. As stated in the Annual Report, these are mainly investigations into misuse of funds from EU funds and the state budget, manipulation during public procurement, and corruption.

Croatia commonly scores high on the annual Corruption Perception Index compiled by Transparency International. In their 2022 report, it ranked 57th out of 180 countries surveyed globally and 24th in the EU, ahead only of Romania, Bulgaria, and Hungary.

It has come to light last year that Croatia (or rather its citizens) is also among other countries implicated in the 2022 biggest investigation of theft and corruption of public moneys embodied in the so-called Operation Admiral in relation to a complex VAT/GST tax fraud scheme based on the sale of popular electronic goods. All the data collected is being analysed, and the investigation into the organised crime groups behind this scheme is continuing. The estimated damages investigated under Operation Admiral currently amount to 2.2 billion euro. It amounts to the biggest VAT carousel fraud, or Missing Trader Intra-Community (MTIC) fraud, ever investigated in the EU. The criminal activities are spread throughout the 22 EPPO participating Member States, as well as Hungary, Ireland, Sweden, and Poland, along with third countries including Albania, China, Mauritius, Serbia, Singapore, Switzerland, Turkey, the United Arab Emirates, the United Kingdom and the United States.

Whether about corruption, about nepotism, about fraud, about theft, about improper government minister behaviour, new scandals persistently pollute the life of Croatian people. I remember a comment I once read on communist mindset and habits as Croatia was in the throws of seceding from communist Yugoslavia: leaving Yugoslavia will not mean we have also left the thieves behind, and that is why strict anti-corruption laws, and their implementation will be essential for democracy to thrive. Today, in 2023 the implementation of such laws is pathetic or largely non-existent in Croatia. Audits and spot checks are not fully independent, checks and balances to do with government grants and funding practically do not exist as the concept in functioning democracies intends, leaving ample space for embezzlement and theft and other corrupt means. Corruption runs in the blood of former communist operatives and their descendants. Croatia badly needs a political blood transfusion! Ina Vukic

Croatian Government Issues Bonds Amidst Initiative For Recall of Prime Minister!

February 26, 2023 by inavukic 4 Comments

While televised street interviews of citizens on Croatia’s news TV programs during the past week have yielded reticence, caution, rejection, and enthusiasm, regarding the imminent and historic issue of government bonds it is, at the same time, officially touted as an avenue of much needed investment boost to Croatia’s economy and national goals.

Croatian citizens and residents have been given the priority and opportunity to register for Croatian state bonds between 22 February and March 1, 2023; 500 euro being the minimum amount a citizen can deposit.

On 3 March 2023 corporations and institutional investors will be given the opportunity to purchase the bonds, however this opportunity will last only one day. The maturity period is two years. The interest rate is 3.25%.

Minister of Finance Marko Primorac said that the target value of the bonds issue is one billion euros, and the goal is to increase savings that citizens have in banks at relatively low interest rates and also enable citizens to participate in the public debt market.

“However, the goals are also of a broader nature, that is, through the active participation of citizens on the primary market, and then on the secondary, to further develop the capital market, encourage financial literacy, as well as other positive effects that such an issue can have,” said Primorac.

He emphasised that the minimum interest rate on bond issuance is 3.25%. The market interest rate is determined according to market circumstances, but 3.25% is the minimum coupon interest that citizens can expect, and it can be slightly higher in accordance with market circumstances.

According to the Ministry of Finance of the Republic of Croatia registration for the government bonds will be done in more than 500 bank branches which are the leading agents of the bonds issue – Erste&Steiermärkische bank, OTP bank, Privredna banka Zagreb, Raiffeisenbank Austria, Zagrebačka bank – as well as the Hrvatska poštanska banka (Croatia Postal Bank), which, at the same time, is the co-issuer of bonds together with the government. Citizens do not need to hold a bank account with any of these banks to qualify for registration and purchase of government bonds.

First round investors may be natural persons of legal age who are Croatian citizens, as well as legal persons, foreign citizens, who are residents of the Republic of Croatia. Ministry of Finance and the Zagreb Stock Exchange website are to carry important information about government bond issues and subscriptions, including for those citizens who are not clients of one of the banks that are the leading agents and co-arrangers of the issue, said Primorac, who directed citizens to the online brochure on bonds published by the Croatian Chamber of Commerce (HGK).

Upon registration, citizens can pay the desired amount of bonds immediately, they can also do it later, up to March 1, and Primorac advises that it is better to do it as soon as possible. Ministry of Finance webpage https://mfin.gov.hr as well as the Zagrebačka burza/ Zagreb Stock Exchange webpage https://zse.hr are holding all necessary information for people wishing to purchase Croatian government Bonds. It is envisaged that once sold the bonds will be listed on the stock exchange market.

The maturity of the bond will be two years.

If by any reason citizens who purchased the bonds cannot hold them until maturity and want to sell them on the secondary market, they may reportedly be faced with price changes. In that case, there is a certain minimal risk that they will not receive the amount they initially invested.

Prime Minister Andrej Plenkovic pointed out that this issue of government bonds aims to dynamise the domestic capital market, as well as send a message of confidence in government bonds, in domestic public finances, and everything that has been done through systematic work and responsible management of public finances in the past years.

Whilst generally government bonds are among the safest forms of investment because of the alarming state of the economy and quite a bit of distrust in the government, there is loud scepticism on the streets of Croatia. The release of government bonds comes at the time of continued series of corruption scandals involving government ministers, of deposing old and naming new minister for development due to scandalous inaction in the past three years in reconstruction of earthquake devastated areas despite ample funds available from EU coffers, of parliamentary opposition initiatives for Prime Minister Andrej Plenkovic’s recall. At this stage, it seems that the parliamentary opposition’s call for the recall, sacking, of the Prime Minister is doomed for failure for the simple reason of there being “too many political cooks” and too little tangible “incriminating” evidence that usually justifies sacking or recalls. Besides that, the parliamentary opposition is in the parliamentary minority and there are no significant numbers of representatives from the ruling majority party willing to cross the floor on the matter.

Croatians living in Croatia are not used to bank term deposits like people living in the West; they are ¨”used to” the so-called current bank accounts. Investing in government bonds can in a way be compared to bank term deposits and this idea alone may frighten off some people who may be reluctant to place their money out of reach for two years. Hence, one may expect that most government bond buyers will be corporate or institutional investors.

When we look at the economic and political situation in Croatia, two years if there are no major disasters are very safe. The current push from the parliamentary opposition for Prime Minister’s recall does not help nor does it provide the citizens with serenity that their money will be safe if they invest it for two years. The almost precarious financial and economic situation in Croatia, at the bottom of Europe, does cause distrust in people even if the situation as seen as stable and likely to remain stable for the coming two years or so. Being a country that depends heavily on income from tourism a successful issue of government bonds will provide a boost towards betterment and realisation of national goals. But with the President of the country, Zoran Milanovic, publicly announcing he and his family will not for various reasons be buying any government bonds one’s trust in the whole process and issue is surely shaken. That is such an awful move by a country’s president, almost an attempt to sabotage the issue of government bonds. Milanovic did not have any duty as president of the country to publicly talk of what he and his family will or will not do with their personal bank savings. He revealed it to spite the government, I’m quite certain of that. A nationally bitter and destructive vantage point indeed! Ina Vukic

Filed Under: Uncategorized Tagged With: Andrej PLenkovic, Croatia, Croatian Government Bonds, Croatian Stock Exchange, Investing in Croatia, Marko Primorac, Recall oif Prime Minister, Zoran Milanovic

Croatia: Tough Nut Communist Mindset

February 19, 2023 by inavukic 18 Comments

_{Images from Left: Ursula von der Leyen, Josip Broz Tito, Matija Gubec, Tomislav Karamarko}

To my knowledge, which is relatively substantial by the way, nobody like the communists used and abused history to serve their own purposes for control and power. The European Parliament has become the arena where this culminates. This, one may say, is unsavoury but not surprising to a democratically minded individual since there are former communists or communist sympathisers from various EU member countries in high EUP and EC positions who are relatively unknown to the public and who held positions in countries that have in essence failed in providing for decent living of their people and were and are incapable of rooting out economic and political corruption that has plagued the countries they functioned in prior to rising to EUP or EC. Nevertheless, not every Member of Parliament wants to play historian but those that are “heard” most in public do!

I turn to the Facebook post, dated 14 February 2023, by Tomislav Karamarko, who among other high roles is former Deputy Prime Minister of Croatia (from January to June 2016) and former Minister of Internal Affairs of Croatia (October 2008 to December 2011), who strongly acted in efforts to prosecute communist crimes in former Yugoslavia, Croatia, and paid dearly for that with his distinguished and most promising career in politics and leadership in 2016. One can safely assume that lustration or at least a functional class of lustration would have been on his agenda for Croatia were he not cut down by the political machinery that wheeled and dealt communist mindset and actions.

“Ursula von der Leyen is the president of the European Commission and Ognian Zlatev is the head of the European Commission’s representative office in Croatia, so I dedicate this Facebook post to them and their consciences. I don’t expect anything from local Europeans anyway, because most of them have a conflict of interest in relation to the topic I’m initiating.

Namely, on February 10, 2023, slobodadalmacija.hr published an article entitled ‘Did you know that there are 28 places with squares and streets that proudly bear the name of Marshal Tito in Croatia.’

So much materialisation and concrete mention of JB Tito, one of the biggest criminals of the 20th century, communist dictator, and henchman…

Can you stoop any lower and poorer, my homeland?

On September 19, 2019, the European Parliament adopted a resolution called ‘The Importance of European Remembrance for the Future of Europe’, which condemned and equated Nazi and communist crimes, and calls on all EU member states to carry out a clear and principled review of the crimes and acts of aggression they committed. totalitarian communist regimes and the Nazi regime. The Resolution also expresses concern because ‘in the public spaces of some member states (parks, squares, streets, etc.) there are still monuments glorifying totalitarian regimes.’

Could it be any clearer?

That is why I am publicly asking Mrs. Ursula von der Leyen and Mr. Ognian Zlatev, since nothing has been done to date (in Croatia), what are they doing so that the resolution of the European Parliament entitled ‘The Importance of European Remembrance for the Future of Europe’ of September 19, 2019, is finally implemented in the Republic of Croatia.

Isn’t it time for this mental-communist contamination to end…”

But its not only in public spaces that the underhanded and mean operations of communist Yugoslavia still exist in Croatia. There is also no effort whatsoever to correct the wrongs committed even with national symbols or heroes of Croatian freedom fight that spotted many centuries.

450 years ago, the great Croatian–Slovene Peasant Revolt ended. On February 15, 1573, the uprising’s leader Matija Gubec was brutally, torturously executed in the main square of Zagreb, the capital of Croatia, which at the time was part of the Habsburg Empire. During centuries that followed, the Peasant Revolt of 1573 continued to serve as a beacon of hope for change for the better, inspiring numerous pro-freedom actions, initiatives and movements in the region and beyond. While the Croatians fighting for an independent Croatia during World War Two embraced, naturally, Matija Gubec as their idol who symbolised their plights for freedom from the installed oppressive Yugoslavia conglomerate since 1918, Yugoslav communists (who fought for Croatia to remain within a Yugoslavia and subservient to Serbs), pretending to be on a saving and liberating mission of Croats, had the gall to take the name of Matija Gubec for two of their fighting brigades in World War Two; one in Croatia and one in Slovenia! Given that Gubec was a symbol of fight for freedom in both Croatia and Slovenia the communists stole him from Croats as their idol in battle to continue the enslavement of both Croatia and Slovenia by Serb-leadership-saturated communist Yugoslavia!

Since Gubec was seen almost exclusively as a fighter for the Croatian state, the right to a state was denied by the communists, considered to be simply minions of Russia/Stalin to co-opt him as a symbol of a leftist revolution had cut bitter anger and resentment in Croatian patriots.

As communists in Yugoslavia, not Croatian independence fighters, won the Second World War their control over Matija Gubec legacy was tightened and they pursued further changes in the interpretation of symbolism Matija Gubec represented. Their interpretation of Gubec as a social revolutionary (not freedom fighter) became the only version, and the history of the Communist Party of Croatia as part of Yugoslavia was written with the 1573 rebellion as the beginnings of a revolutionary movement leading to the Partisan triumph in 1945. Gubec became a chapter in the Partisan myth, and in 1973, the 400^th anniversary of the peasant rebellion became an occasion not only to celebrate Gubec, but to reinforce the legitimacy of communist regime as (falsely) a people’s regime that liberated.

Looking back to 1990’s when Croatia fought to become independent from communist Yugoslavia, it is almost impossible to know the exact number of communists and former communists who favoured or opposed independence. Judging by what has developed politically and leadership-wise since year 2000 in Croatia it is, however, possible to know that many of those communists who did not oppose Croatia’s independence in 1990’s did so by hiding their greed for power and communist indoctrination at the time. Post 1991 independence referendum where almost 94% of Croatian voters voted favourably for secession from communist Yugoslavia it is widely believed that one third of Croatia’s communists favoured an independent Croatia, one third opposed it, and one third were undecided but went along with it. This stems from an estimate made by general elections results and various public statements, omissions to prosecute communist crimes and ongoing display of communist symbolism for which there is no legislative ban as there is for the WWII independence fighting Ustashe regime.

With the end of communism and the collapse of Yugoslavia, Gubec lost the political symbolism that had once inspired so-called revolutionaries to fight under his banner even outside Croatia. Under Croatia’s first democratically elected president, Franjo Tudjman, who was also from the Zagorje region, the cult of Gubec faded away. Gubec had essentially become a communist symbol and thus could not immediately be incorporated into the body of new (or renewed) political symbols that were required by an anti-communist and newly independent Croatia. In January 2004, the Zagorje district where the 1573 battle took place could not even raise enough money to fund anniversary activities to commemorate the event, which included a 3.5 kilometre walk from Gubec’s Linden Tree (where the peasant leaders allegedly met) to the site of the museum and a re-enactment of the trials of Franjo Tahy and Matija Gubec. Since then though the celebration of the anniversary of the uprising is done locally in Donja Stubica via a re-enactment of the unique and important battle and this year such celebration marked its 15th year.

_{Re-enactment of the 1573 Battle of Stubica, Peasant Revolt, Croatia (Photo: Screenshot)}

One may say indeed, if it weren’t for the former communists or their indoctrinated descendants in government and in the presidential office since year 2000 Matija Gubec would have long ago been rehabilitated to his rightful place in history – as a hero of freedom fights of and for Croatian people.

Thankfully, the memory of Matija Gubec has not died out, even if the localised celebrations by way of re-enactments of the Battle of Stubica and cruel death keep the remembrance away from the national level. Since the main goal of this 16^th century uprising was equality among human beings through the abolition of feudalism and an end to institutionalised corruption, including unreasonable taxation and abuse of women it has quite significant similarity with the Croatian fight for Independence during World War Two as well as the Croatian 1990’s Homeland War battles that ensued after most of the Croatian people were no longer willing to suffer oppression by Serb-led communists in power. It’s not an easy feat to return to its rightful glory that which has been desecrated by communists, such as the symbol of Gubec. Widespread corruption (and unwillingness to confront and disable it) and communist mindset are evidently too strong at the leadership of Croatia for things to change to better even within the next decade. But if eligible voters get smart enough, they could draw the start line for real change even as early as next year. Ina Vukic