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KUHNER: Croatia, the next Greece
Offer of EU membership is a Faustian bargain
Croatia is on the verge of national surrender. This small Balkan nation is poised to follow the disastrous path of Greece - dramatically affecting European and U.S. taxpayers. On Dec. 4, Croatians will hold parliamentary elections. The ruling Croatian Democratic Union, known by its acronym HDZ, is expected to lose - and rightly so.
The HDZ has been mired in corruption scandals. Its former leader, Ivo Sanader, is in prison awaiting trial on charges of embezzling millions. Croatian Prime Minister Jadranka Kosor has sought to improve her party’s badly tarnished image. She has failed.
For years, Zagreb’s governing class has pillaged the Croatian economy. More than $1 billion has been siphoned off or stolen. Shady privatization deals have enriched HDZ-connected oligarchs. Bribery is rampant. The regime harasses independent journalists and media critics. Judges frequently are political hacks. The rule of law is almost nonexistent. Property rights are violated routinely. More than 1 million court cases remain backlogged - a stunning number for a country of about 4 million citizens.
The results have been disastrous. The unemployment rate hovers at 20 percent. Youth unemployment is near 40 percent. Growth is anemic. Yet the HDZ’s most destructive legacy has been its reckless borrowing and spending. The national debt has skyrocketed. Croatia’s per-capita debt-to-gross-domestic-product ratio is one of the highest in Europe. In response, Ms. Kosor’s government has refused to do what is required: slash public spending and overhaul the country’s lavish entitlement programs. Instead, Zagreb has raised taxes - especially on foreign corporations. The HDZ’s high-tax, statist polices have fostered economic sclerosis, chased away investment capital and stifled job creation.
Moreover, the country is so saddled with debt that Croatia's Central Bank is warning of possible national bankruptcy and financial collapse. Croatia’s future is bleak. That is why its largest export has been people - the vast brain drain of the most educated and skilled young Croatians.
The HDZ has staked everything on joining the European Union. Brussels has agreed to accept Croatia as its newest member. According to Zagreb, EU accession is the magic solution to the country’s woes. It isn’t.
The current EU agreement is a dagger aimed at the heart of Croatia’s national sovereignty and economic independence. It literally sells the country down the river - Croatia’s fishing and agricultural sectors will be decimated; its economic zone in the Adriatic Sea, estimated to possess vast potential reservoirs of oil and natural gas, has been abandoned to Brussels; its wine exports will be crippled; and its fiscal policy will be subordinated to EU bureaucrats. In short, Croatia will be transformed into a political vassal.
The deal is also bad for Europe and America. Brussels will be assuming another Greece - a debt-laden Balkan nation that will require constant expensive bailouts to stay afloat. So far, EU and American taxpayers have provided more than $1 billion in foreign aid to Croatia. The money has not gone to advance anti-corruption reform measures. Instead, it largely has been misappropriated, misused or simply embezzled. Zagreb’s political class has been pushing to join the EU for one reason: to get its dirty hands on the 4 billion euros Brussels is promising as part of Croatia’s entry. It is a Faustian bargain that threatens to cost Croatians - and Europeans - dearly.
The surging opposition leftist coalition is expected to win at the ballot box. Composed of former communists and social democrats, it promises to offer the same broad policies of the HDZ - EU membership, high taxes, stifling regulations and big government spending - minus the corruption. Even this will not happen. Left-wing parties control numerous local cities and towns. Yet graft, cronyism and bribery remain pervasive. Nothing will change except party labels and different oligarchs. The Croatian people, however, will continue to bleed.
This is why voters need to overturn the political status quo. It is time to confront Croatia’s entrenched corruption and incompetent governing class. There are some promising new parties offering viable options to reverse the country’s decline.
One of them is Croatia 21st Century. Its leader, Natasha Srdoc, champions a tax-cutting, pro-growth agenda. She advocates reducing government spending, balancing the budget and unleashing the private economy. She is also one of the few politicians truly serious about tackling Zagreb’s culture of corruption. Ms. Srdoc is demanding that any Croatian government official who has amassed unexplained illicit wealth while in office be prosecuted and have his or her assets seized. This alone would smash Croatia’s mafia state.
She also is a Euro-skeptic who vows to scuttle Zagreb’s deal with Brussels. Her party has close ties to European conservatives. In contrast to the HDZ, Ms. Srdoc is a genuine traditionalist. She is pro-family, pro-life and seeks eventually to end the mass murder of unborn Croatian children by making abortion illegal - but only through a referendum. In short, she poses a mortal threat to Croatia’s venal kleptocracy.
Hence, the HDZ has branded her “an enemy of the state.” Nearly two dozen of her party’s members and supporters have been harassed and intimidated by HDZ and leftist officials. Recently, Aleksandar Radovic, a candidate for Croatia 21st Century and a well-known anti-corruption author, was arrested by government authorities. His crime: He had extensively documented the vast illicit wealth and corruption of Interior Minister Tomislav Karamarko - a thug who uses the police as his personal henchmen. Mr. Radovic is rotting in jail, a political prisoner in a supposedly democratic country.
Jeffrey T. Kuhner is a columnist at The Washington Times and president of the Edmund Burke Institute.
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