Croatian Prime Minister Andrej Plenkovic has arguably never been more powerful than he is today. In his eight years in office, he has steered Croatia away from Russian influence and aligned it squarely with its partners in the European Union and NATO. Compared to Croatia’s multiyear recession in the 2010s, he now presides over one of the highest GDP growth rates in the EU. And in April, despite high inflation and the lingering effects of the COVID-19 pandemic, Plenkovic bucked the anti-incumbent trend that has dominated voting in 2024 by securing a fourth straight victory in parliamentary elections for his center-right party, the Croatian Democratic Union, or HDZ, and its allied parties.
And yet, the HDZ-backed candidate in Croatia’s presidential election, the first round of which takes of place in December, looks set to lose to incumbent President Zoran Milanovic. A former prime minister himself, Milanovic reentered the political sphere to run successfully for his first term in 2019. Since then, he has seemed determined to ensure that Plenkovic is not the only game in town.
The two men could not be more different. Milanovic’s populist nationalist appeal has won him the nickname “the Croatian Trump.” By contrast, Plenkovic has positioned himself as an effective technocratic leader since coming to power in 2016. To be sure, Croatia has had its share of tumult in that time. In 2017, Agrokor, then the country’s largest private company and the biggest employer in the Balkans, nearly collapsed, which would have threatened Croatia’s entire economy. It was only saved by government intervention. Then in 2020, in the midst of the pandemic, two earthquakes caused billions of dollars of damage. Subsequently, as elsewhere, inflation soared, prompting the government to cut taxes on food and heating, while also freezing the price of electricity and dozens of supermarket products.
Despite the cost of these measures, Croatia recently received an upgrade across the three main credit rating agencies, a reflection of economic growth and Plenkovic’s medium-term fiscal reform policies. The country’s economic growth is also expected to average 3.1 percent from 2024-2026—well above the EU average. As noted, that stands in stark contrast to 10 years ago, when Croatia was coming off a six-year recession.
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Croatia also joined both the eurozone and the Schengen free movement area in 2023, further embedding it in the EU mainstream. With growing affluence, the country is now a candidate to join the Organization for Economic Cooperation and Development, or OECD, a grouping of affluent countries.
“Plenkovic is running a tight ship for sure,” says Bojan Glavasevic, who until recently was an independent opposition MP. “He’s perhaps most successful … in managing EU funds, which is demonstrated in a positive investment environment.”
That may explain why Plenkovic was able to lead the HDZ to reelection in April with 34.4 percent of the vote, a full nine percentage points ahead of the coalition headed by the center-left Social Democratic Party, or SDP, of which Milanovic was once the leader.
Controversially, Milanovic attempted to stand as the SDP’s candidate for prime minister in the elections while retaining the presidency, a move that was blocked by Croatia’s Constitutional Court, which he then accused of being a pawn of the HDZ. Milanovic’s intervention did not reap an electoral reward anyhow, and the HDZ entered a new governing coalition with the hard-right populist Homeland Union, or DP.
“DP has emerged as a right-wing nationalist alternative to the HDZ, drawing on the populist wave sweeping across Europe,” says Domagoj Juricic, senior consultant at the Zagreb-based political consultancy MKPS. “However, internal divisions within DP quickly weakened its momentum after the general election, particularly after entering a coalition with HDZ, as many political analysts had predicted.”
Plenkovic and his government have benefited from the fact that, with the exception of Milanovic, Croatia’s opposition has proved unable to capitalize on his biggest weakness: economic issues.
That there is a vacuum on the right at all is largely thanks to Plenkovic, who shifted the HDZ closer to the center when he took over as party leader in 2016. His predecessor, Tomislav Karamarko—who served as deputy prime minister during the short-lived HDZ-dominated government from January to October 2016—was seen as pushing HDZ to the right, embracing nationalist rhetoric and raising concerns that Croatia could be sliding toward the far-right populist governance seen at the time in Poland and Hungary. Croatia’s government during this time was accused of undermining press freedom, threatening civil society and turning a blind eye—or even a kindly one—to those sympathetic to Croatia’s pre-1945 fascist regime.
“The HDZ were hard right under Karamarko, and [they] couldn’t win over the country and couldn’t win elections,” says Kresimir Macan, a political consultant who worked as an adviser to Plenkovic and has consulted other Croatian parties. Ironically, the HDZ-led government fell in 2016 in large part because of scandals surrounding Karamarko’s wife, including her connections to MOL, a Hungarian oil company locked in a long-running dispute with the Croatian government, as well as allegations about her reported ties to Russian interests.
In addition to shifting his party back to the center, Plenkovic has also steered Croatia away from Moscow’s influence, which in the 2010s appeared to be growing in the country. Russian state-owned Gazprom’s share of Croatia’s energy market was increasing, and when the dust had settled after Agrokor’s near-collapse, Russia’s Sberbank emerged as its largest shareholder. Even HDZ-backed then-President Kolinda Grabar Kitarovic was forced to defend her seemingly warm relations with Russian President Vladimir Putin, and a number of senior Croatian businesspeople and policymakers were understood to have at least friendly relations with Russian interests.
That was considered unusual, though, since Croatia has not had historically close ties with Russia, and the trend has shifted in recent years. Russia’s full-scale invasion of Ukraine in February 2022 chilled domestic sentiment toward Moscow. Plenkovic, who is known to have a strong personal commitment to and understanding of Ukraine, has been unequivocally on Kyiv’s side and has even drawn parallels between Ukraine’s defense and Croatia’s war of independence from Yugoslavia. Meanwhile, the opening of the first liquefied natural gas terminal in Croatia in 2021 has facilitated the country’s diversification away from Russian gas.
And Agrokor—now the Fortenova Group—has been sold by Sberbank to a Croatian businessman who was until recently a partner of Russia’s Gazprom but is now locked in a commercial dispute with the company. Fortenova also recently sold its strategically important agriculture business to a company part-owned by the Croatian state, bringing it closer to home.
“Before Russia’s invasion of Ukraine, many European nations were actively engaging with Russia, both politically and economically,” says Juricic. “Croatia’s dealings with Russia—particularly through energy imports and financial ties, such as Sberbank’s role in Agrokor—were more a reflection of economic necessity than a shift in geopolitical alignment. Today, Croatia remains firmly aligned with Western policies, particularly in light of the ongoing war in Ukraine.”
Still, although what Glavasevic calls the “open door policy for Russia” has now officially ended, he warns that Russia-connected figures, including some linked to the HDZ, have not gone away entirely. And Milanovic has broken with most of Europe’s center-left by opposing sanctions on Russia and arms supplies to Ukraine. His positions have led to accusations that he is backed by Moscow and fueled the narrative that the upcoming presidential election could put Zagreb’s support for Kyiv at stake, although Milanovic has so far been unable to meaningfully shift Croatia’s official position.
Instead, his appeal for voters lies in everyday economic issues, which is also Plenkovic’s biggest weakness. After a period of double-digit inflation, there remains a stark contrast between Croatia’s impressive topline economic figures and people’s lived experience in one of the EU’s least-affluent countries.
“The reality of everyday life is a different thing,” Glavasevic says. “We’ve seen some rise in salaries, but not enough to keep pace with inflation. Croatia is definitely not doing well in terms of quality of life, and the less well-off are doing worse.” Indeed, the government is now making moves to address the high cost of housing, which particularly affects young Croats.
Plenkovic and his government have benefited from the fact that, with the exception of Milanovic, Croatia’s opposition has proved unable to capitalize on these issues. While the SDP has avoided the collapse experienced by a number of center-left parties across Europe in recent years, its support has also plateaued, polling consistently at around 25 percent. Meanwhile, the leftist Mozemo party has lost support since the April elections, in part due to its perceived ineffectiveness running Zagreb, where it holds the mayoralty.
That leaves Milanovic as the opposition’s rallying point, setting him up to win another term, during which he will continue to clash with Plenkovic. And while the prime minister undoubtedly still holds the real power, he is also reportedly eyeing an EU or NATO position, which would mean an exit from Croatian politics despite having no clear successor. If and when Plenkovic departs, Croatia’s deep-seated economic challenges—and potentially Russia’s baleful influence—could become more politically salient.
Andrew MacDowall is an independent consultant and writer. He is the founding director of the strategic consultancy Toros Advisory and has written extensively for publications including the Financial Times, The Guardian and Politico Europe.
The post Croatia’s Populist President Looks Set to Win Another Term appeared first on World Politics Review.
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Publish date : 2024-11-28 09:10:00
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