Croatia Elections: New Prime Minister Will Not Be Milanović or Karamarko, Says MOST

By 10 November 2015

MOST outlines some of the demands SDP or HDZ will have to accept, as they state that neither party leader will be the new prime minister.

Drago Prgomet, one of the leaders of MOST, party which has a decisive role in deciding who will be the next prime minister, said yesterday for RTL that the new government will not be formed without MOST and that they will propose the future prime minister. He revealed that it will be neither Milanović nor Karamarko, reports Index.hr and Jutarnji List on November 10, 2015.

"We are ready to enter the government. The fact is that, when we entered the elections, we did not think we had such a big support. People want changes, and if you want changes, you have to be among those who can implement these changes, and that is the government. On the other hand, Božo Petrov made it clear that we will not form a coalition with parties which do not want to accept our program. Now we will start with the negotiations, we will offer a set of reforms that we expect our political opponents to accept. The number of mandates we have received gives us the responsibility to carry out reforms. We will not run away from this responsibility", he said.

"It is interesting that on election night the two leading parties have started talking about reforms and changes, but during the campaign we could not hear that. We respect the legitimacy of both parties, but the new prime minister will be decided by MOST, and it will not be Karamarko nor Milanović. We will do everything for the negotiations to succeed and that we do not have new elections", Prgomet added.

He did not disclose which party is closer to them, but has admitted that contacts with both sides are taking place. "Petrov has spoken with both Milanović and Karamarko. The fact is that Milanović congratulated me, and that HDZ international secretary Miro Kovač called me, although I could not answer the phone. So, obviously, there are contacts and there is a will", Prgomet concluded.

Yesterday, MOST held a meeting of its National Council where the members discussed further actions which will decide who will form the next government. Party leader Božo Petrov said after the meeting that they discussed the list of reforms which will be proposed during the negotiations.

According to report by Jutarnji List, if SDP and HDZ want to form the next government, in the next four years they will have to cut the number of counties for more than half and abolish and merge many existing municipalities. In addition, they will have to reduce the number of local officials, stop employing people according to their political affiliations, directors of public companies will have to be chosen via public competitions, all loans denominated in foreign currency will be converted into the kuna, the tax burden for businesses will be relieved, special fiscal charges abolished, the second pension pillar turned into a voluntary one, state property which is not used sold, 18 billion kuna invested in national irrigation system, tax deductions for personal income increased, while natural resources such as forests, water, energy facilities will be privatized only if voters agree with it in a referendum.

The negotiations should begin on Wednesday, and Most will focus on conditions regarding the reform of the state and local governance and the reform of the tax system. They are reportedly interested in three ministries covering these reform areas – administration, judiciary and finance.

As far as the MOST election manifesto is concerned, it was divided into two parts – the conventional set of popular reforms such as the reform of the public and local government and tax reform, and the insistence on controversial changes in the monetary system which would make the Croatian National Bank directly stimulate the real economy and employment. In addition to abolishing loans denominated in foreign currency, MOST advocates in its manifesto an expansionary monetary policy through giving cheap loans in kuna. The combination of these measures would lead to a strong devaluation of the kuna, although MOST does not speak publicly about it.

Economic analyst Velimir Šonje doubts that such measures are really possible. "How could that even be achieved? There are private contracts between banks and customers, and recently the Constitutional Court upheld the legality of a foreign currency clause for loans", said Šonje.