Business, Economics and Jobs

The EU gets a new member

ZAGREB, Croatia — Two decades after war tore this small country apart, Croatia will become the 28th member of the European Union on July 1 following an accession process that’s lasted a dozen years.

Although some may raise an eyebrow at the thought that anyone would want to join the crisis-ridden union, officials in this former part of communist Yugoslavia have no such doubts.

Among them, the Foreign Ministry’s Mirna Vlasic calls the move a “huge leap.”

“Twenty years ago we had war here, now we’re entering the EU,” she says.

Croats see their membership as the strongest guarantee that their dark recent history will remain in the past. Some 200,000 were killed during the 1991 - 1995 wars in Yugoslavia, the bloodiest conflict on the continent since World War II.

“The framework the EU gives us will enable us to have stability and security in this region,” Vlasic says. “That’s very important for us.”

Others don’t see EU membership as an unqualified boon, however. Political analyst Zarko Puhovski describes it as a lesser evil.

“We depend on the EU economically and politically,” he says. “If we’re objects of the union, it’s wise to at least try to be a part of it, and be there when decisions are made.”

EU officials will arrive in the capital Zagreb at the end of the month to welcome the new member. In the city center’s main square, where the main celebrations will take place, locals who don’t seem completely convinced by the logic of joining nevertheless hope for the best.

“The EU is not in a good economic situation, but we’re not going to give up now,” says Tomislav Barac, an IT engineer.

Although Angelo Marivacic, who works in a bar just off the square, is worried the accession will lead to a significant increase in prices, he says he’s convinced Croatia belongs in the EU.

“We are European, geographically and traditionally,” he says, adding that he’s especially looking forward to the opening of free borders with other EU members.

“We’ll be able to find work in the EU,” he says. “Croatia is just for holidays.”

That’s no hyperbole. Tourism provides Croatia’s major industry: Almost 12 million tourists, most European, flocked to its 1,000 miles of picturesque Adriatic Sea coastline and numerous islands last year.

Tourism generates around 15 percent of annual GDP. Judith Cuculic-Zupa, an advisor in the European department of Croatia’s National Bank, believes that’s not enough.

Other industries are “almost nonexistent,” she says. Finding a product stamped “made in Croatia” is almost “mission impossible.” When they’re available, she adds, they usually cost more than imported goods.

A tiny country of four million people, Croatia has been in recession for the past five years, and unemployment stands at 18 percent. Entering the EU’s big open market under those conditions may be a “big challenge,” Cuculic-Zupa warns.

“Our companies are less competitive than average EU businesses,” she says. “In the short run, it may have some very negative consequences, such as the closing down of uncompetitive businesses, and higher unemployment.”

In the long term, however, Cuculic-Zupa believes the “inevitable” accession to the EU — “we’re too small and we’re too close [not to join]” — will benefit the economy by imposing higher standards and better legal protection.

“It’s forcing us to carry out reforms we actually should have made many years ago. It’s been a very good push in the right direction.”

That’s something Croat officials have stressed throughout the dozen-year accession process.

“Joining the EU has actually assisted us in the transformation of society,” Vlasic says. Prodded by EU requirements, Croatia has initiated a series of political, economic and judicial reforms that have transformed the country.

However, there’s much left to do. “The real work starts now because we have to function as a member state, adjust to new circumstances,” she says.

That’s especially true for the country’s relations to its neighbors.

Last year’s acquittal at The Hague’s International Court for former Yugoslavia of two Croat generals previously sentenced for war crimes reignited tensions between Croatia and its former enemy Serbia, which viewed the decision as a denial of Serb suffering.

Puhovski believes EU accession may complicate the process by prompting “feelings of superiority” among Croats.

“The Serbs are still lagging behind, we’re going to be in the EU, our generals have been freed… this is our victory,” he says. “That’s what nationalists will say.”

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But Vlasic insists Croatia has no intention of giving up on the reconciliation process.

“Regional cooperation is one of Croatia’s national priorities,” she says, adding that the country has initiated a series of projects to assist its neighbors in the EU integration process.

“EU integration gives this region prospects for future development, democracy, a functioning rule of law and a way of avoiding new conflicts.”