Close Croatian election points to continued uncertainty
By Igor Ilic and Ivana Sekularac ZAGREB (Reuters) - Croatia's Social Democrats were narrowly ahead in Sunday's snap parliamentary elections, according to exit polls, but it was unclear whether the party had enough coalition partners to unseat the rival conservative Croatian Democratic Union. According to state television's exit poll, the Social Democrats would win 58 seats in the 151-member parliament, just one more than their conservative rivals, the senior partner in the outgoing coalition. The outcome, barely different from the previous vote, looks unlikely to provide a firmer mandate to push through with the painful privatisations and restructuring being urged on the country by the European Union. "A period of difficult coalition talks is ahead of us," senior SDP official Pedja Grbin told state television. The poll forecast the centre-right Most ("Bridge") party, which wants to end the 20-year dominance of the big parties, which it accuses of clientelism and corruption, would win 11 seats. This second vote in less than a year was triggered when the previous government, an HDZ-Most coalition, collapsed after just five months amid rows over public administration reforms and government appointments. Under former Prime Minister Zoran Milanovic, the SDP hoped to wrest control from the short-lived technocratic government, and the HDZ hoped a new leader, European Parliamentarian Andrej Plenkovic, would win back lost ground and renew the coalition. But, voting in far smaller numbers than last time, voters declined to give lawmakers the certainty they wanted, and any government could end up even more unwieldy than the previous one, especially if it is dependent on a likely eight seats representing ethnic minority parties. "It would be good if this election yielded political stability," said Goran Uzelac from Zagreb just before he cast his ballot. "Unfortunately, I don't think the biggest parties really want major reforms." EU URGING PAINFUL MEASURES The new government will face a huge task in revitalising one of the European Union's weakest economies, which is dominated by state enterprises and where red tape deters private investment. The EU wants its youngest member to tame high public debt, reduce the budget deficit and improve the business climate to spur economic growth. Yet a government relying on even smaller, populist parties to govern may shy away from painful measures. Over the past months, political life in the country, which emerged from the wreckage of Yugoslavia 25 years ago, has been dominated by populist rhetoric and gestures from all sides that has brought relations with neighbouring Serbia to their lowest point since the end of the 1990s Balkan wars. Three years after joining the EU, the country's record on drawing down European funds is poor, pointing to public administration shortcomings and contributing to macroeconomic imbalances the European Commission sees as excessive. Parties offered few details during the campaign on how to deliver promised higher standards of living for the 4.3 million people of Croatia, where unemployment is 13 percent. All promised lower taxes financed by expected higher growth. With public debt at 85 percent of gross domestic product, Croatia spends about 3.5 percent of GDP on interest payments alone. Growth of 2.5 percent expected this year is far short of the 4 percent growth that would be needed to make a dent on persistent low living standards, analysts say. Preliminary official results are due at around 10 p.m. (2000 GMT) with near-definitive results due two hours later. (Writing by Thomas Escritt; editing by Ralph Boulton)
