Int. Herald Tribune
Croatian PM vows a path of change

By Justin Keay

Paris, Wednesday, May 10, 2000

London - Ivica Racan became prime minister of Croatia in a coalition formed in February after elections that followed the death of President Franjo Tudjman.

Along with President Stipe Mesic, Mr. Racan, whose Social Democratic Party broke from the Yugoslav League of Communists in 1990, has stressed a need for radical economic and political change. Croatia is seeking early membership in NATO and the European Union.

Mr. Racan was interviewed in London by Justin Keay for the International Herald Tribune.

Q. Throughout the 1990s, under President Franjo Tudjman, Croatia suffered from the effects of war and authoritarian government. How difficult will be the process of normalization?

A. Croatians showed their dissatisfaction with the former government in the elections, which were decisive: We won by a landslide. Far-reaching changes in domestic and foreign policy have been demanded, although this will not be easy after 10 years of stagnation.

In many ways, Croatia 10 years ago was ahead of where it is today; other transition countries have overtaken us. We are facing a social crisis, while the economy has suffered from too much political intervention. The last government also isolated Croatia from the world. Another concern for us is that those who were defeated in the elections do not accept their loss of power easily. They are afraid of being accused of economic and even war crimes. There is a lot that needs to be done, although we cannot always move as quickly as people would like.

Q. Your government and President Stipe Mesic have stressed the need for swift integration with NATO, the EU and other Western structures. How optimistic are you that this can happen?

A. Although we know that the new government and its policies have the support of Europe, we are well aware that the pace with which we move depends on Croatia. The truth is, we want to move as fast as possible. With the EU, we feel we will catch up with the first group of applicants [the Czech Republic, Hungary and Poland]. When they are ready, so, too, will we be. We hope for an early Association Agreement and would like to begin membership negotiations soon after. We also hope to join the World Trade Organization very soon.

With NATO, we expect an invitation to join Partnership for Peace after the Florence meeting later this month. Once we have that, we will apply for full membership straight away. To prepare ourselves, we will start the reform of the armed forces and their position in Croatia.

Separately, we have always favored a unitary Bosnia. Now we are in government, we can do our best to assure that. I feel the preconditions for NATO membership are being met.

Q. Some tough economic decisions need to be taken in Croatia, particularly with ending the previous government's policy of subsidies to unprofitable enterprises. What are your priorities?

A. There are two main goals: creating a safe, profitable environment for investment and continuing with privatization of banks and companies, without the criminal practices of the past.

In particular, we want to speed privatization in the tourist industry so it can recover to what it was. With the economy generally, for this year we expect some growth, although at this stage I cannot say how much.

Q. Within the last week, the central bank governor, Marko Skreb, and other senior officials resigned. What guarantees can you give that his tight money policies will be maintained?

A. Our program calls for stable development, a stable currency and keeping inflation in single digits. It also emphasizes the independence of banks and monetary authorities from the government. The criticisms of the governor were justified. They were not aimed at his policies in keeping the currency stable but at his failure to stop criminal activities in certain banks and control their bad loans. I emphasize: Croatia needs an independent central bank.

Q. The 1990s were a terrible decade for the Balkan region. How do you view prospects now?

A. We want to cooperate with everybody in the region. The big hindrance to stability and cooperation however, is the Slobodan Milosevic regime. I think we are witnessing its last stages, although I am unsure it can end without conflict.

He fought for a Greater Serbia. Now he is fighting for survival. If he wants to stay alive, he cannot retire peacefully: he can't leave Serbia except to go to The Hague. Conflict has kept him afloat; therefore, there is the danger of further conflict.

I do feel independence is likely for Montenegro. If this is what people want, their wishes must be respected. If it leaves, that will be the logical end to the process of disintegration for Yugoslavia. Original article