Croatia: Finally in the EU but Still in Search for a Place Under the (EU) Sun

Abstract

Accession to the European Union has been a long-standing goal of Croatia’s foreign policy ever since it proclaimed independence from the former Yugoslavia in 1991. This goal had finally been achieved in July 2013, much later than initially expected. Croatia has passed the longest and the most demanding accession negotiations of all new member states from Central and Eastern Europe, and one would expect that it is rather prepared to compete in the single market. However, as the economic crisis of 2008 has revealed, Croatia still faces many structural difficulties that have made its economic recovery the longest among member states, with the exception of Greece. Positive economic trends in the last couple of years were insufficient to counter the effects of prolonged economic crisis and increased job opportunities in Germany, Ireland, and other member states with much higher wages. Consequently, the long-standing problem of a diminishing domestic demographic situation has been further exacerbated after the accession, as emigration has reached record levels in the last two years. In short, Croatia’s European dream that was nominally fulfilled by the accession to the EU is still far from materialisation in the sense of achieving lasting clear economic and social benefits. On the contrary, Croatia’s position has slipped from one of the most developed transition economies in 1990 to the bottom of the Central and Eastern European economies. While the bloody dissolution of the former Yugoslavia should be acknowledged as a great contributing factor to such an outcome, the sustained deficiencies in the Croatian economic governance system and other related factors are still slowing down its economic recovery and have kept the country from catching up with the rest of the EU.