Jean-Claude Juncker – Croatia, the War, and the Future

Warning: Eurozone Turbulence Ahead For Croatia

November 1, 2017 by inavukic 22 Comments

Croatia’s Prime Minister
Andrej Plenkovic

According to Prime Minister Andrej Plenkovic’s words on Monday 30 October 2017 at an economic conference devoted to the introduction of the euro in Croatia, Croatia aims to become a Eurozone member within the next seven to eight years.

So now what? Can the madness of Eurozone failure and struggle be stopped from infecting Croatia? The United Kingdom’s 2016 shock referendum vote for Brexit was a warning about the gap between angry voters and pro-immigration, pro-globalisation élites. Globalisation in the eyes of those that voted for Brexit would rather apply to spreading ones country’s interests across the globe than being a part of a melting-pot of countries tied by a union, such as the EU, in which pot some countries suffer while others, particularly the bigger ones, benefit. As Jean-Claude Juncker, the president of the European Commission, has memorably said in 2014 on Eurozone economic policy and democracy, “We all know what to do, but we don’t know how to get re-elected after we’ve done it.” That doesn’t sound like a prediction of radical reform. It’s a dangerous moment for Europe.

In 1992, the European Union made what the Nobel Prize-winning economist Joseph Stiglitz in August of 2016 called “a fatal decision”: the choice “to adopt a single currency, without providing for the institutions that would make it work.” In “The Euro: How a Common Currency Threatens the Future of Europe” (Norton), Stiglitz lucidly and forcefully argues that this was an economic experiment of unprecedented magnitude: “No one had ever tried a monetary union on such a scale, among so many countries that were so disparate.”

When Lehman Brothers collapsed, in September, 2008, and the global financial crisis hit, all Western economies went into recession, but the Eurozone countries suffered the most and for the longest. The U.S. unemployment rate hit ten per cent for a single month in 2009 and is now below five per cent; the Eurozone unemployment rate hit ten per cent around the same time, and it was only in July 2017 that it fell just below that figure while in individual countries there it still lingers in double digits. The Eurozone’s economy is smaller than it was when the crisis hit and many world’s top economy experts, including Stiglitz, the euro is to blame for all this underperformance. But let’s say the euro can’t be blamed for everything economically grim in the Eurozone and if it’s not only the euro then one can safely argue that the economic politics attached to it certainly complete the picture of failure causes. Eurozone takes away the two main monetary tools a country can use to manage its economy. The first is to cut interest rates in order to stimulate demand and the second is to reduce the value of the currency in order to stimulate exports.

In Europe, the first thing that happened after the crisis was that all the bubbles popped. The “peripheral” countries suffered dramatic economic contractions, compounded by bank implosions, and had to appeal for financial assistance to avert complete collapse. To make things even darker, a complex mixture of international politics, economics, and law meant that the body that stepped in to help the crisis economies was a triple-headed entity, the Troika, made up of the European Commission, the European Central Bank, and the International Monetary Fund.

The Troika had strong views about how the afflicted economies should be fixed. They rolled into town demanding austerity, meaning severe cuts to government spending, and structural reform, meaning changes to the way a country’s economy works. They doled out money on the condition that these policies were implemented, and accompanied the package with fancy charts showing how the economy was going to recover after the austerity medicine took effect. It is, if you have a twisted sense of humour, just possible to see the funny side of these bailout-and-austerity packages, especially the ones concerning Greece. The numbers are grim, and the human realities are worse—joblessness, hopelessness, forced emigration, spikes in the suicide rate.

The pendulum swings no differently in Croatia. It has not all this time been a member of the Eurozone, but has since 2013 as member state of EU been affected by the Troika medicine, or should we say – infection.

And now we have Croatia revving to jump into the Eurozone disaster zone! One wonders how much of the revving fuel is contained in a wild notion of romanticising about the saving power of Eurozone amidst current threats of bankrupting Croatia that are unfolding in dealing with “Agrokor” disaster and corruption has been poured into the political plights to save Croatia’s government from falling – yet again!

“We don’t want to specify the exact dates, but we want Croatia to become a euro zone member within two government terms in office,” Plenkovic said during the conference on 30 October 2017, continuing: “We have two key aims – one is to join the Schengen area, or rather be ready for the political decision in 2019, and the other is to join the Eurozone.”

EU members that have not yet adopted the euro are expected to spend at least two years in the Exchange Rate Mechanism (ERM) II, a mechanism aimed to ensure currency stability before joining the eurozone.

Plenkovic’s centre-right HDZ government came to power in 2016, three years after Croatia joined the EU. Croatia is still one of the poorest member states and its economy contracted steadily from 2008 to 2015, with a mild rebound in the last two years. The Croatian central bank already keeps the kuna currency in a narrowly managed float, with minor fluctuations during the year, and steps in to prevent sharp changes by intervening on the local exchange market.

The toughest challenge for Croatia to join the Eurozone will be bringing the public debt level to below 60% of GDP. It is slightly above 80% of GDP now. “Our goal is to reduce the public debt to 72% of GDP by 2020 … We are undertaking a major fiscal consolidation and this year the budget gap will be even lower than last year’s 0.9% of GDP,” Plenkovic said.

Central Bank Governor Boris Vujcic said Croatia was the most “euroised” EU country of those that had not yet adopted the euro (Czech Republic, Poland, Hungary, Croatia, Romania and Bulgaria).

“Some 75% of local deposits and 67% of local debt is denominated in the euro. Some 60% of Croatia’s trade exchange is related to the euro zone, while 70% of tourism receipts comes from the euro zone countries,” Vujcic told the conference.

It is, however, crystal clear that over time the EU has no longer been pursuing the route of a free trade area but it became increasingly politicised, and the idea was to set up a centralised power structure in Brussels to transfer national sovereignty rights on to the supranational decision making structure. Now the EU policy is about interventionism, they try to interfere in all sorts of economic and social fields to push through all kinds of political concepts and that’s a very dangerous idea. This being so, one cannot quietly and compliantly accept Prime Miniser Andrej Plenkovic’s statement from 30 October 2017 in which he said: “We said yes to the Eurozone when we joined the EU. The reason we’re not there yet is that we still have to meet all the criteria and not because we need the political decision.” This only gives muscle to the EU political battle for survival while living standards in Croatia keep plummeting and working-age people keep emigrating in droves. What a mess! It’s a mess that can possibly be sorted to benefit Croatia, rather than the EU, by people political power. If Croatia’s government keeps referring to the EU referendum of 2012 as something Croatian people committed themselves to then the reality and people-legitimacy of that referendum needs to be re-examined. It was, after all, a referendum at which barely 29% of Croatian voters turned out for voting! Ina Vukic

Filed Under: Uncategorized Tagged With: Andrej Plenković, Boris Vujcic, Brexit, Croatia, Croatia to join eurozone, Eurozone, failure of eurozone, Jean-Claude Juncker

Croatia Drowning Its Diaspora In EU Financial Problems

September 17, 2017 by inavukic 13 Comments

One would need to be totally blind, or stupid, not to see the politically orchestrated communications from the pro-EU-leaning leftist Croatian mainstream media and European Commission (EC) President Jean-Claude Juncker’s announcement mid-last week. Croatia’s so-called demographic experts say that Croatia could take at least 50,000 new immigrants in short-term to make up for the potential work-force losses that emerged through mass exodus of people due to unemployment the day before EC’s Juncker in his annual state of the union speech made an announcement regarding “swift inclusion in Europe’s visa-free Schengen area”. The fact that there was no reference to the rich and large Croatian diaspora as part of Croatia’s demographic “experts” contemplating immigration earns concern and utter disillusionment; after all, Croatia’s government’s mouth is full of calling upon the Croats from the diaspora to return to Croatia! Were this not a lip service only, there would, one justifiably expects, have been some kind of Croatian government reaction to the mainstream media immigration claims, stating its position on the progress of any plans targeting the diaspora return to bolster workforce deficit.

Both Bulgaria and Romania should be swiftly included in Europe’s visa-free Schengen area, said in his annual state of the union speech Wednesday 13 September, adding that Croatia also deserves full membership of the zone.

“If we are to have a stronger European Union, it needs to be more inclusive too. If we want to bolster our external borders, and rightly so, then it is high time to bring Romania and Bulgaria into the Schengen area. Croatia too deserves full membership of the Schengen area as soon as all of the criteria are met,” Juncker said.

Juncker’s story emerged as a story hardly anyone foresaw. According to his claims the Eurozone is growing faster than the United States! Europe’s booming economy was near the top of Juncker’s topic list. Ten years since the crisis struck, “Europe’s economy is finally bouncing back,” the European commission president told MEPs, declaring: “the wind is back in Europe’s sails”.

The Eurozone might overall be doing better, but this masks the fact that the crisis sweeping it during the past few years has left deep scars and many wounds are far from healed. In France, the economy is expanding at an annualised rate of 1.7%, fuelled by confidence in French president Emmanuel Macron and his reform agenda, but growth continues to lag the Eurozone average. Germany’s economy remains solid, but Germans are increasingly worried about inequality and low-wage jobs. Spain has bounced back from the crisis, but inequality is rising and unemployment remains painfully high at 17% – second only to Greece. Italy’s economy is doing better, but worries remain over its heavily indebted banks. Despite the rapid pace of job creation, Eurozone unemployment remains high at 9.1%, worse than the EU 7.7% average and the US 4.3%.

Juncker’s boasting that the Eurozone is doing better than the US certainly does not seem to be supported by the actual unemployment figures. High unemployment figures ripple with negative and suppressing effects on other areas and this is at the top of the list of reasons why the Eurozone is looking for economic reforms, especially keeping an eye at the Macron’s proposals for far-reaching labour reforms in France, which would reportedly make it easier for the young and low-qualified to enter the labour market. There are those who believe that Macron’s formula of reforms could kick-off a golden age for the Eurozone, hence, it is expected that Macron will unfold a detailed blueprint of his labour reforms plans, which include a Eurozone finance minister and parliament, a couple of days after September 2017 elections in Germany.

In the push to transition the Eurozone from an imperfect monetary union into a solid economic continent is reflected in Juncker’s proposals that include significantly more help for all EU member countries so that the ones who already haven’t could to join the euro, which, he said, would truly make the EU into “the single currency Union”. He further proposed a wide range of institutional changes, including the creation of an EU finance minister and the widening of the Schengen area, in which passport-free travel is allowed and, presumably, workforce mobility between the member countries.

In a call for the presidencies of the European commission and the European council, the body comprising the member states’ leaders, to be combined and directly elected in the future, Juncker said the EU needed to be more flexible and streamlined. “Europe would be easier to understand if one captain was steering the ship,” he said.

According to the Guardian UK report Juncker also put his weight behind calls for the European parliament seats previously held by British MEPs to be elected on a transnational basis.
Juncker added that the council should adopt qualified majority voting, rather than unanimity, on foreign policy issues and drive forward in European defence. “By 2025 we need a fully-fledged European defence union,” he said. “We need it. And NATO wants it.” He also added the EU would establish a European cybersecurity agency. “Cyber-attacks know no borders and no one is immune,” he said.

Juncker told MEPs he intended to start trade talks with Australia and New Zealand, and promised to legislate to protect strategic interests from foreign purchases through industrial screening. Given the Brexit and the CANZUK proposal for increased ties between the nations of Canada, Australia, New Zealand and the United Kingdom one wonders what fight the EU might have on its hands in attempts to encroach on the traditional Commonwealth alliances. While a joint statement from the French, German and Italian governments following Juncker’s speech endorsed the move, the scenario will be most interesting to watch and keep an eye on as, indeed, it spells out new forces muscling in onto the traditional Commonwealth “unity of sorts” inclinations.

Now more than ever it appears that those in Croatia who at the 2012 EU referendum were not in the mood for signing Beethoven’s Ode to Joy are paving the streets with the “I told you so – EU will suck the life out of Croatian hard-earned independence and sovereignty”. While leading political parties fuel divisions on historical lines Croatia has been increasingly sucked into the Eurozone’s financial and economic problems, and unlike Ireland, increasingly neglecting its diaspora that should be its ticket to national prosperity. What a shame! Time to act! Time to pull the diaspora reins in! Ina Vukic

Filed Under: Uncategorized Tagged With: CANZUK, Croatia, European Commision, Eurozone, Eurozone financial problems, Jean-Claude Juncker, neglecting of Croatian diaspora

Croatia Caught in EU Refugee Bedlam

September 20, 2015 by inavukic 43 Comments

Refugees stream into Croatia
Saturday 19 September 2015
Photo: Marko Mrkonjic/Pixsell

According to Croatian HRT TV news, Saturday 19 September evening edition, 21 000 refugees have entered Croatia from Serbia since Wednesday. The refugees, often referred to as the migrants, mostly from poor or war-torn countries in the Middle East, Africa and Asia, have streamed into Croatia since Wednesday, after Hungary blocked what had been the main route with a metal and razor-wire fence and riot police at its border with Serbia. Serbian authorities had then steered them and assisted them to Croatia’s borders and after Croatia closed its border with Serbia during the week, the refugees found alternative routes: they walked into Croatia through forests, corn and farm fields.

Crossing the border to Croatia
across farms and cornfields

Croatia’s prime minister, Zoran Milanovic wants to redirect the refugees flowing into his country to Hungary and Slovenia. He says Croatia can no longer receive refugees. However, the Hungarian government has, during the past couple of days, raised a barbed-wire fence along some 41 kilometer land border between it and Croatia (the rest of the border is a river) to keep the refugees out. Croatia has already transferred to the Hungarian border some 4,000 refugees and a couple of thousand to the Slovenian border. Both Hungary and Slovenia are resisting receiving the refugees and keep pounding vitriolic comments against Croatia.

Croatian Prime Minister
Zoran Milanoviuc inspects
a refugee food and first aid tent

After suddenly finding itself in the path of Europe’s biggest tide of migrants for decades, Croatia said on Friday it could no longer offer them refuge and would wave them on, challenging the EU to find a policy to receive them.
“We cannot register and accommodate these people any longer,” Croatian Prime Minister Zoran Milanovic told a news conference in the capital Zagreb.

“They will get food, water and medical help, and then they can move on. The European Union must know that Croatia will not become a migrant ‘hotspot’. We have hearts, but we also have heads.”

The arrival of 21,000 since Wednesday morning, many crossing fields and some dodging police, has proved too much for Croatia. It cannot sustain the burden economically or facilities wise.

The refugee crisis has left the EU scrambling for an effective response. Hungary has begun threatening Croatia that it will not recommend it becomes a Schengen area member state since it cannot contain its borders or offer aid to the influx of refugees. This criticism regarding humanitarianism comes from a country that just built 4-meter fences along its borders and chased off the refugees with tear gas and other types of violence as well as still sending bus loads to the Austrian border!

Police assist refugees in Croatia

With tempers clearly fraying, anything could happen in EU. Croatian Prime Minister Zoran Milanovic on Friday 18 September talked on the telephone with German Chancellor Angela Merkel and the two agreed that the problem of the current migrant wave had to be solved on the EU’s external borders.

Such a scenario is actually alarming given that the refugees clearly do not want to remain at EU’s external borders – Greece, Bulgaria, Hungary, Croatia, Italy…so one wonders what Merkel and Milanovic meant by solving the problem on the EU’s external borders? Would force need to be used?

Refugees in Tovarnik, Croatia
waiting in line for food

Italy and Greece say they cannot cope with migrants coming by sea who, under the EU’s Dublin system, should be given shelter and potentially asylum in the first EU state they enter. Germany, France and other northern states complain Italy and Greece are ignoring the Dublin rules on registering asylum-seekers and helping them travel north through the Schengen area. They now complain Italy and Greece are slow to accept EU help to properly register migrants and send back non-refugees, meaning many can drift across Europe working without documents. Hungary blames Greece for the tens of thousands arriving there this summer and has now fenced off its border with Serbia and its new target to throw blame against is Croatia! Slovenia has also entered the blame and rejection game. It too, like Hungary says it will protect the Schengen borders! Greece and Italy are within the Schengen area also but have not protected the borders and, instead, moved the refugees onward into Europe – let someone else worry about them, would sum it up.

Assisting refugees onto buses
in Croatia
Saturday 19 September 2015

Germany, France and others criticise eastern states led by Slovakia, the Czech Republic and Hungary for blocking a larger Jean Claude Juncker plan to relocate 120,000 according to quotas. Some say these ex-Communist states lack solidarity after years of receiving EU subsidies and could be penalised by having their grants cut. These eastern European countries accuse Germany of bullying, say relocation will only draw in more immigrants who will, in any case, not want to stay in eastern Europe but will defy the unenforceable Dublin rules and cross Schengen borders to Germany. They say that the EU bailed out Greece on a number of occasions and yet it does not seem to be getting the harsh criticism from Brussels as they are. Obviously EU isn’t going to change its composition of egotistical states any time soon.
Stung by criticism of “Brussels” for not being able to quieten the squabbles between member states affected by the refugee crisis, European Commission officials have noted that their power is limited. Variations in the welcome given to refugees or benefits offered are national prerogatives.

Croatia and
refugee crisis in EU

An EU emergency response system to provide extra frontier guards has been canvassed in Brussels but such a mechanism can only be triggered by invitation – something Athens, caught up in debt crisis and new elections, has yet to issue, reports Reuters.

Comforted by a strong vote on Thursday 17 September for its mandatory quota proposal in the European Parliament, another federalist institution, the European Commission declared this “a clear signal to … ministers … that it is high time to act and finally agree”.
But national leaders insist on first seeking consensus among states. “I feel an allergy to coercion,” their summit’s chairman Donald Tusk, a former Polish prime minister, said last week.
Juncker last week suggested a common EU border guard service and some officials believe a single EU asylum system could make better sense than a patchwork of national policies.

Syrian refugees (or migrants?) in Croatia

Now, one cannot throw caution to the wind and not ponder on the unwanted eventuality of EU setting up large refugee camps in Croatia as part of the solution, given that Croatia is outside the Schengen area. Could that possibility be in what Milanovic and Merkel reportedly agreed upon? That the problem needs to be solved on EU’s external borders! Could Croatia end up being a huge camp in which the refugees are housed until processed, until their refugee status confirmed or rejected and from where they would either be distributed to other EU countries or deported out of EU? Large numbers are in question. It’s estimated that besides the 500,000 that have already entered European Union countries, another 500,000 are expected the coming year. Having in mind points of entry one can estimate that about 200,000 will enter through Greece and then up to Croatia/Hungary. Such overwhelming numbers would have alarming and destructive effects on the culture and life in Croatia as we know it with large doses of security issues to breeding of radicalism and terrorism as has been observed in other EU countries where multiculturalism has been developing for decades.

Kolinda Grabar-Kitarovic
President Of Croatia
Photo: Ivo Cagalj/Pixsell

Croatia’s Vecernji List reports that president Kolinda Grabar-Kitarovic had Saturday 19 September spoken to the UN Secretary General Ban Ki-moon and several state leaders about the migration crisis. She emphasised that the problem of the crisis is not only Croatian but also European and global and that it needs to be solved according to those premises. She said that Croatia would insist on solving the problem as being a global one as opposed to a local one. She expects that some 40,000 refugees will enter Croatia in the coming two days and that measures of security and other matters must be put in place in order to secure stability.
“Croatia is not a country of first entry, Serbia is qualified as a safe country and therefore there is no need for thousands of migrants to cross over daily to Croatia, we cannot absorb them. We must, first of all, be realistic, secure safety of our own citizens and the stability of our country. We must know who the people crossing our borders are, that it be under supervision, at official crossings, not illegally, then we need to know where they are going because we cannot take care of so many on a long term basis,” she said.
Now all Croatia needs is a consensus between the Prime Minister Zoran Milanovic and President Kolinda Grabar-Kitarovic regarding the safety and security but the likelihood of that happening to an ideal level is quite slim with general elections “around the corner”. I do so agree with President Grabar-Kitarovic that the problem is global and the UN must start playing a bigger role. That particularly with view to establishing more refugee camps outside the EU countries, including Serbia if they reach it from Turkey/Greece. Ina Vukic, Prof. (Zgb); B.A., M.A.Ps. (Syd)