Eurozone: A Hobson’s Choice For Croatia

European Commission president  Jean-Claude Juncker welcomes  Croatian President Kolinda Grabar-Kitarovic (R)   prior to a meeting at the EU commission  headquarters in Brussels, Belgium, 30 April 2015.  Photo: EPA/Oliver Hoslet

European Commission president
Jean-Claude Juncker welcomes
Croatian President Kolinda Grabar-Kitarovic (R)
prior to a meeting at the EU commission
headquarters in Brussels, Belgium, 30 April 2015.
Photo: EPA/Oliver Hoslet

Rather often one comes across people debating, surveys taken on whether Croatia should join the Eurozone. The reality, though, is that if Croatia wants to say a member of the European Union it must join the Eurozone, sooner or later. It’s like a Hobson’s choice: Take it or leave it. To qualify for Eurozone membership every EU country (except UK and Denmark) must meet the required Convergence criteria and these are:
• Budget deficit must not exceed 3% of GDP (“Stability and Growth Pact” applies after Euro adoption/ i.e. agreement among EU member states to facilitate and maintain the stability of the Economic and Monetary Union [EMU]);
• Public debt must not exceed 60% of GDP (“Stability and Growth Pact” applies after adoption of Euro too);
• The currency should be stable against the Euro for at least two years – no devaluation;
• Inflation must not be 1.5% points above the average of the three economies with the lowest inflation;
• Interest Rates: Long-term government bond yields must not be more than 2% points higher than in the three lowest inflation member states.



Croatia has quite a bit of work to do before it satisfies the Eurozone Convergence criteria and on 30 April 2015, in Brussels it transpired from the meeting between European Commission president Jean Claude Juncker and Croatian President Kolinda Grabar-Kitarovic that Croatia does not meet the conditions for Eurozone membership – certainly not before 2020 – but aims to join the Schengen area in a couple of years.

Croatia has a natural vocation to become a member of the Eurozone, but the country has to make many more efforts to achieve that goal’‘ Juncker said, agreeing with Grabar-Kitarovic that ”the earliest date would be 2020”.

Croatia knows that it is necessary to regain control of the public finances and that its deficit is too high”. However, Zagreb could join the Schengen area in a couple of years. ”I hope that in two years inspections will have been completed and that we will have met all the technical criteria to enter the Schengen area”, Grabar-Kitarovic said, also emphasizing the importance of freedom of movement for the Croats. ”We do not want our citizens to leave Croatia, but they should be able to work and establish their own company wherever they want, just like any other EU citizen” the Croatian president said.



As expected, Croatia’s Prime Minister Zoran Milanovic brushed off a prediction from the opposition-backed president, Kolinda GRabar-Kitarovic, that the country will adopt the euro by 2020 as too optimistic, sharpening a political divide before general elections. Zoran Milanovic, of course, would not know the significance of forward planning, such as nominating a year by which to achieve the positive economic results, then focusing on achieving the plan, if it hit him in the face.



President Kolinda Grabar-Kitarovic also said in Brussels that Euro adoption in the next five years would help tie the country close to the European Union, its main trading partner and source of tourism revenue. Premier Zoran Milanovic said Croatia would join “when we are ready”! Of course, it cannot be otherwise! But it’s up to his government to ensure readiness as soon as possible because that also means that Croatian economy would pick up to a stable level. He would have done much better had he actually nominated a year by which Croatia would be ready! This way, his failings in governing and leadership are all the more pronounced.



This Euro petty quarrel seems to have intensified the evident Prime Minister-driven tenseness in relations between the President Grabar-Kitarovic, who scored an opposition-backed victory in a January vote, and Prime Minister Milanovic, who has presided over a recession his entire term (since late 2011) and whose popularity is sinking fast and deep before new elections expected late this year/beginning of 2016.
In talking about the real prospects of reaching the criteria for Eurozone entry, President Grabar-Kitarovic said last week that her experience outside the country gives her an advantage over other domestic politicians on how to return the country to growth and attract investors to diversify the economy. She said the key to preparing the economy for future challenges, including the Euro, lies in more cooperation between employers and employees, and in investors willing to set up businesses in the country’s interior, away from the tourism-dominated Adriatic coast.



She has called on the Prime Minister to resign for failing to fix the economy. One doubts Milanovic will resign, however one firmly hopes he and his incompetent red lot will not make it across the winning line at the coming general elections.



So, what would be some advantages for Croatia of membership in the Eurozone:
• Will help elimination of volatile monetary exchange rates, thereby improving business confidence and exports, which would lead to economic growth in Croatia;
• Travellers, tourists between Eurozone member countries no longer have to change money (because currency is common) and save on transactions, which leads to tourism industry boost and greater consumer satisfaction for Croatia;
• European Central Bank strives to keep the interest rates and inflation as low as possible, which would lead to more investments in Croatia;
• Since all member countries have same currency prices are transparent between the countries, which makes it easier for companies and consumers to buy cheaper goods and supplies, which is linked to sustainability and good health of business.



On the disadvantageous side of being a member of the Eurozone one may see the loss of autonomy over monetary policy as a major drawback. The member countries lose the discretion of using devaluation as a means to boost exports or to borrow more to boost job creation or use fiscal measures such as tax cuts that they deem to be appropriate for their respective country. But so many countries experiencing recession and reaching the verges of bankruptcy have had such autonomy over their monetary policy and yet have made no steps forward, on the contrary, have made the economic woes insurmountably worse.



So, as far as Croatia is concerned, being a member of the Eurozone can only improve its chances of developing and retaining a vibrant economy. It’s already tied to the Euro, anyway.



Joining the Eurozone is as much a political question as it is economic. The political benefit plays out as being a part of an inner core and being a part of the Eurozone for Croatia will only cement further its political distance from the Balkan region, in which Croatia never felt comfortable and from which it differed in many ways of life. So, next time I come across a survey about whether it’s good or bad for Croatia to join the Eurozone, I will simply skip it, throw it in the bin. Of course it’s good! Look at the alternative: leave the EU and get pushed into the Balkan region, back to unrest, treachery and hell.



Unlike the government, the President of Croatia evidently has clear goals for Croatia as far as Eurozone is concerned and one can conclude from this and from what she says that she will endeavour to lift up “the game” in improving the economy, facilitate needed negotiations and partnerships in order to achieve the best results for Croatia. President Grabar-Kitarovic appears focused on stimulating domestic growth in Croatia, on assessing the consequences of reliance upon Global factors and the room for reducing any detrimental effects these have on domestic growth and economic recovery. While some will say that Croatia has no chance in turning the economic burdens (growing public debt, severe export/import imbalance, high unemployment) around, such pessimists and speculators have been proven wrong before. One may well be an optimist and say that through intensive work, reforms and efforts, the negative trends can be turned around and Croatian economy can grow even to 3 or 4% by 2020 and achieve the standards required for Eurozone. Croatia has had enough of Prime Minister Milanovic’s complacency and laziness in the matters of Eurozone standards regardless of whether Croatia becomes a member or not. After all, these standards define a good standard of living which all citizens deserve. Ina Vukic, Prof. (Zgb); B.A., M.A.Ps. (Syd)

Croatian MEP Joins Urge For Stepping-Up Dealing With Communist Crimes



With the new European Union Parliament on the way since elections in May 2014 and the election last week of Jean-Claude Juncker as the European Commission President there is a movement that caught my attention from the European Peoples’ Party (EPP) to make stronger steps forward regarding doing something about communist crimes rather than just sitting inanimately on the EU 2009 declaration which condemned totalitarian regimes.

It is well established that the European Parliament emphasises the need to keep alive – through remembrances etc. – memories of Europe’s tragic and horrendous past in order to keep paying respect to the victims, condemn those who perpetrated the crimes and to thus build foundations for reconciliation, which foundations are to be based on truth and remembrance. It also holds that Nazism was the dominant historical experience in Western Europe while Central and Eastern Europe had experienced both Nazism and Communism to equally dominant proportions that affected nations.

Regardless of what the EU Parliament may hold, the fact remains that the “original” EU, prior to expansion into Eastern Europe, had existed, and in many instances still does, quite comfortably under the conviction that World War II was good because it fought against fascism and Nazism. Along came Eastern Europe countries that do not fit this formula, that do not share this European memory – they brought to the EU the memory of Communism in its ugly robes, the robes that can perhaps be weighed through arguments of conservative European intellectuals and historians, particularly from Germany, who in the second half of 1980’s articulated their convictions that the Holocaust was not fundamentally different to other experiences of state terror and mass extermination in the 20th century, such as Stalinism, Communism. As one may expect such claims and views were strongly repudiated by mainstream left-wing intellectuals who insisted on the uniqueness of the “Final Solution” and denounced the historians’ writings as politically charged and revisionist, despite the fact these were founded on historical truths of horrendous crimes. Ten years later, in 1997, “The Black Book of Communism” was published in France – a critique of blindness among both intellectual and political elites towards Communist crimes due to focusing entirely on the Holocaust; a critique that was immediately rebuffed by a broad front of left-wing French writers and politicians who rejected outright any direct comparison between Nazism and Communism.

In April of 2009 the EU Parliament passed its Resolution on European Conscience and totalitarianism, condemning all totalitarian regimes crimes including communist regime ones.

Meanwhile and counting, over 850 mass graves of communist crimes victims had been discovered in Croatia alone – a horror story equally as atrocious as the Holocaust.

The achievements of European post-WWII integration are often described as a direct response and a real alternative to the suffering inflicted by two world wars and the Nazi tyranny that led to the Holocaust and to the expansion of totalitarian and undemocratic Communist regimes in Central and Eastern Europe. And, indeed, a united Europe shall never be achieved until the EU recognises Nazism, Fascism and Communism as a common legacy and persists on dealing with their crimes thoroughly. While the crimes of Nazism and fascism have been dealt with strongly ever since the Nuremberg trials immediately after WWII such justice has conspicuously eluded the communist regimes’ crimes.

Remembrance debates at the EU level over the last decade can be seen as the replication of previous struggles in EU member states over how best to deal with the past and, as such, these debates remain just that – debates. Unlike in Western European Member States, where the notion of the historical uniqueness of the Holocaust still takes centre stage as an identification-marker, I believe, due to the lack of other viable founding narratives for European integration, at the more generalised European level the idea of Nazism and Communism as equally damnable is gaining acceptance particularly in the process of EU enlargement into the Eastern European countries. The latter have thus brought into the EU different cultures of remembrance where Communism joins Nazism at the helm of condemnation.

Full integration of EU will depend on the success of the process dealing with Communist crimes; lifting these to the level the Holocaust occupies in the collective psyche and historical memory and remembrance in the EU. Perhaps the relevant EU member states will see a more visible platform for dealing with communist crimes in the coming few years especially given the contents in the EPP letter to Jean-Claude Juncker and the possibility of actions, rather than declarations, to follow on the matter.

The European project is based on common values of democracy, truth and reconciliation. The EPP Group emphasises the need to increase public awareness about European history and the crimes committed by totalitarian regimes. The EPP Group believes that the European Institutions, and notably the European Commission, should encourage a broad, European-wide discussion about the causes and consequences of totalitarian rule. This is not merely an historic or emotional problem. It is a problem for a truly comprehensive integration of Europe”, the 17 July EPP letter to Juncker states.
I strongly believe that the European project can be built only on truth and reconciliation. The European Parliament has already condemned crimes committed by totalitarian regimes. But still, we are witnessing the relativisation of these crimes, especially in some countries of Central and Eastern Europe. Therefore the new Commission should continuously address this issue and support projects related to promoting European remembrance and conscience“, said Croatian Andrej Plenkovic MEP.
I am convinced that it is of key importance to raise public awareness and to encourage a broad, European-wide discussion led by the European Commission about the causes and consequences of totalitarian rule to achieve historical conciliation. It is a question of reasserting and defending European values, which are being challenged by those countries outside the EU that have not yet come to terms with the past and are using falsified history to justify aggression against their neighbours“, emphasised Latvian Sandra Kalniete MEP, Vice-Chairwoman of the EPP Group.
Unaddressed and neglected heritage of totalitarian crimes has proved to be a real obstacle to deepened European integration and remains a fertile soil for Euro-scepticism and extremism. Integrating different historic experiences of 28 member nations and sharing them mutually is the best guarantee of our common future“, underlined Estonian Tunne Kelam MEP.
The European Parliament emphasised in its Resolution on ‘European Conscience and Totalitarianism’ of 2 April 2009 that the goal of disclosure and assessment of the crimes committed by the Communist totalitarian regimes is reconciliation which can be achieved by admitting responsibility, asking for forgiveness and fostering moral renewal.
In order to attain the objectives of the EP 2009 Resolution, EPP Group MEPs believe that it is necessary that one of the new European Commissioners in Juncker’s team also includes in her/his portfolio topics related to European history and remembrance. More than 20 EPP Group MEPs signed an appeal to President Juncker in this regard.
The EPP Group is also of the opinion that the European Commission should find the most appropriate means to ensure an adequate degree of institutional and financial support for the work of the Platform of European Memory and Conscience which assumed a key role in promoting the prevention of intolerance, extremism, anti-democratic movements and the recurrence of any totalitarian rule in the future. Ina Vukic, Prof. (Zgb); B.A.; M.A.Ps. (Syd)

Croatia: Benghazy Scrubber Scrubs Western Balkans


Croatia Forum

Lately, Victoria Nuland, US Assistant Secretary of State for Europe and Eurasia, is best known, or, rather, notorious, for her role in objecting to the initial set of the Benghazi attack talking points when she reportedly asked that references to al Qaeda and previous CIA warnings about threats posed to U.S. diplomats in Libya be scrubbed from the document. I.e., she is said to have demanded that (accurate) assessments of terrorist involvement be scrubbed, along with references to (accurate) intelligence warnings about the deteriorating security situation in Benghazi leading up to the 9/11/2012 attack on US diplomatic compound in which four Americans were murdered. Nuland’s role provided the closest thing to smoking-gun evidence of a cover up.

Then I assume all of us remember when in January/February of this year on YouTube, there was uploaded an audio recording of a confidential telephone conversation between Nuland and U.S. Ambassador to Ukraine – Jeffrey Payette. Offended by the indecision of European Union leaders in the fight against Moscow’s “evil intentions” in Ukraine, the cheeky high-ranking American did not hesitate to use dirty words towards the European Union (“Fuck the EU”).

Episodes like these draw attention to the type of people who are deciding the destinies of the world – trying to teach others.

Victoria Nuland,  AP Photo/Boris Grdanoski

Victoria Nuland,
AP Photo/Boris Grdanoski

And on Friday 11 July 2014 Nuland attended in Dubrovnik the 9th “Croatia Forum” held around issues of EU enlargement into the Western Balkans region. She called for struggle against corruption and for democratic recourse to preserve the values of transatlantic community. She sent a serious message to the corrupt Balkan politicians that the United States know for their corrupt practices and their undemocratic rule.

Europe can’t be whole when kleptocrats treat states as a bonanza of spoils for themselves and their cronies. And it can’t be free when elections are rigged, independent media is silenced and minorities are vilified. And it can’t be at peace when corrupt officials use political, economic and judicial intimidation to stifle opposition and rip off their own citizens,” Nuland said to the participants of the forum and continued:
Corruption also threatens national sovereignty because every dirty politician in our midst, every dirty non-transparent contract that we allow, creates another wormhole of vulnerability and an opportunity for mischief by outside forces. From the Balkans to the Baltic to the Black Sea, we must understand, as those on the Maidan did, that corruption is not just a democracy killer, it’s another grey tool in the arsenal of autocrats and kleptocrats who seek to extend their influence, weaken our democracies and enrich themselves at the expense of our citizens”.

Nuland said the gas price dispute, Moscow’s annexation of Crimea and fighting in eastern Ukraine underlined the energy security threat facing Europe. Europe’s energy security needs much work and “building up diverse flow capabilities and capacities and building up deeper networks throughout the continent,” was what was needed. “Croatia has an essential role to play, as an energy security hub for the 21st century… You (Croatia) have spectacular assets to do that so long you as you make smart choices as you are going forward,” Nuland said.

Nuland did not spell out what choices she considers “smart” but given that Croatia is already an EU member perhaps she was using the Croatian platform to address the non-EU members at the forum such as Serbia, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro, Albania… Perhaps it her address was not about energy security but about gaining anti-Russia support and in doing so all sorts of compromises, scrubbing of war crimes etc., could emerge to fast-track some of these countries into EU membership as a matter of harnessing might for the looming cold war against Russia.

According to Croatian news agency HINA, Russian Deputy Foreign Minister Alexey Meshkov said in Dubrovnik on Saturday 12 July that the European Union should not use Western Balkan countries’ desire of joining the bloc to force them to choose between Europe and Russia.

Swedish Foreign Minister Carl Bildt said for Croatian Radio that Jean-Claude Juncker’s (European Commission President-designate) statement, that there will be no new EU members in next five years, may be true but sends a wrong message because without enlargement, there will be no security and thus the credibility of the EU is at risk, while Serbia’s First Deputy Prime Minister Ivica Dacic said that every EU member state should undergo an assessment every ten years and that he is certain that many would not pass on the criteria test that Serbia is now expected to pass.

Carl Bildt, who was one of the architects of the abysmally failed Dayton agreement for Bosnia and Herzegovina, should truly stay out of this exercise of contemplating EU extension into Western Balkans. He has nothing to offer for any real peaceful solution.

The likelihood that Croatia’s leaders will swallow head-and-shoulders Nuland’s glowing compliments to Croatia as a country that “could become a regional energy hub” is very, very high. The carrot is likely to become even more attractive now that Germany’s Angela Merkel said 15 July in Dubrovnik at a meeting of eight Western Balkans heads of state that her country would support the “region’s” future in the EU.

Croatian current leadership of communist extraction will do everything and anything to intercept and set back any processes dealing with post WWII communist crimes and there are two such cases in German courts at this very moment. One wonders whether justice in these will be compromised for a goal of uniting Western Balkans against Russia. Perhaps Nuland’s “smart choices” include a scenario where Croatia should stop pursuing justice for its own victims of communist crimes and of 1990’s war crimes.

While I completely agree with Nuland on the points of corruption and kleptocrats I find it extremely unsettling that it was she who points to the wrongs of it. If I consider the definition of corruption as a moral impurity or deviation from the ideal then her Benghazy scrub would certainly brush at least some corruption against her character. One wonders how much scrubbing of corrupt individuals’ tracks may occur in the process of making Croatia the energy hub of Europe. One wonders what the price the people will pay if their leaders take up the “offer” to lead the way in that region in a cold war against Russia. The huge numbers of unemployed, hungry and poor are not interested in any cold or hot war; their prime concern is how to bring food to the family table.

Certainly, it would be welcome if Croatia picked up on investments necessary to make it that hub, but I fear the biggest beneficiaries of such an exercise will not the Croatian people or workers. I gladly wait to be proven wrong on this. Ina Vukic, Prof. (Zgb); B.A., M.A.Ps.(Syd)

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