December 23, 2015 / 3:12 PM / in 2 years

Croatian president nominates pharmaceutical exec as next PM

Croatia's Prime Minister designate Tihomir Oreskovic arrives at the Presidental office in Zagreb, Croatia, December 23, 2015. REUTERS/Antonio Bronic

ZAGREB (Reuters) - Croatia’s president on Wednesday designated pharmaceutical executive Tihomir Oreskovic to become prime minister, nominating a technocrat put forward by conservatives and reformists after weeks of talks following an inconclusive Nov. 8 election.

The European Union’s newest member state needs stable government quickly as it is under pressure from Brussels to decisively tackle fiscal woes and high public debt as well as pave the way for more investment notably in the private sector.

“He (Oreskovic) convinced me that he has support of 78 parliamentary deputies,” President Kolinda Grabar-Kitarovic said. Parliament has 151 seats.

Oreskovic, 49, a pharmaceutical expert working as a senior manager in Israel-based Teva Pharmaceuticals, now has 30 days to win approval for his cabinet in the parliament.

“I’ll invest all my knowledge and energy so that we can start solving the huge number of problems that we have,” Oreskovic said after his nomination.

The conservative HDZ and the reformist “Most” (Croatian for “bridge”) party struck a deal on Wednesday after six weeks of talks on potential coalitions, which also included the outgoing government’s Social Democrats..

Most, made up of municipal politicians and independents, insisted on a technocrat prime minister as a guarantor of reformist intentions on fiscal management and the economy.

Croatia, once part of old socialist federal Yugoslavia, is under EU pressure to overhaul its costly and inefficient public sector and liberalize its economy to spur investment and tame high public debt, now close to 90 percent of GDP.

A failure to do so would expose Croatia to a downgrade in its credit rating, which is now at the highest speculative grade with a negative outlook.

This year Croatia will post its first year of growth, seen at around 1.5 percent, after six consecutive recession years.

“I think the reformist capacity of a new cabinet will largely depend on the pressure from Brussels. The first test will be the 2016 budget, which should make savings worth at least one percent of GDP, or some 3.5 billion kuna ($500.64 million),” economic analyst Damir Novotny said.

Reporting by Igor Ilic; Editing by Mark Heinrich

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