| ZAGREB, Sept 11
ZAGREB, Sept 11 Croats choose a government for
the second time in less than a year on Sunday, and polls predict
a close outcome and another coalition that lacks a clear mandate
to push through painful cuts and restructuring being urged by
A Social Democrat-led four-party alliance stands to win
about 60 of 151 seats in a fragmented parliament, while its
conservative rival, the Croatian Democratic Union (HDZ), should
be a few seats behind, polls say.
That would leave them seeking support from the centre-right
Most (Bridge) party, also the kingmaker after last November's
elections, which wants to end the 20-year dominance of the big
parties, which it accuses of clientelism and corruption.
The previous HDZ/Most coalition collapsed after just five
months amid rows over political appointments, public
administration reforms and a conflict of interest
Under former Prime Minister Zoran Milanovic, the SDP hopes
to wrest control from the short-lived technocratic government,
but the HDZ hopes a new leader, European Parliamentarian Andrej
Plenkovic, can make up lost ground and renew the coalition.
Any government will face an enormous task in revitalising
one of the European Union's weakest economies, where state
enterprises still dominate and red tape discourages private
Three years after joining, the country's record on drawing
down European funds is poor, a waste of free money that points
to glaring public admnistration shortcomings, contributing to
macroeconomic imbalances seen as excessive by the European
Yet a government that may need the help of even smaller,
populist parties to govern may have every incentive to shy away
from pushing through reform measures.
"Most of our politicians are not really interested in the
economy," said one economic official. "Now we have some growth
and a lower budget deficit, there is a risk that reforms will
Parties offer few details on how to deliver promised higher
standards of living for Croatia's 4.3 million people, where
unemployment runs at 13 percent. All promise lower taxes to be
financed by expected higher growth.
With public debt at 85 percent of gross domestic product,
Croatia is spending about 3.5 percent of GDP on interest
payments alone. Growth is finally accelerating after six years
of recession ended in 2014, but the 2.5 percent expected this
year is not enough to raise living standards, analysts say.
"Our current growth potential is 1.5-2.5 percent, but we
need at least 3.5-4.0 percent for new jobs and better living
standards," said Raiffeisen analyst Zrinka Zivkovic Matijevic.
(Reporting by Igor Ilic, editing by Thomas Escritt and Angus