October 5, 2015 / 2:43 PM / 2 years ago

Croatia to hold parliamentary elections on Nov. 8

ZAGREB (Reuters) - Croatia’s president on Monday called a parliamentary election for Nov. 8, with the opposition conservatives bidding for a return to power in the European Union’s newest member after six years of recession.

The Social Democrat-led ruling coalition of Prime Minister Zoran Milanovic is trailing in opinion polls and faces a fight to defeat the conservative HDZ, led by former intelligence chief Tomislav Karamarko.

The gap between them has closed in recent weeks, with Milanovic appearing to benefit from the economy’s return to growth this year, his handling of the migrant crisis buffeting Europe and a decision to impose on banks the cost of converting Swiss franc-denominated loans into euros to aid borrowers..

A poll published on Sunday by Promocija Plus put the HDZ-led opposition coalition on 32.9 percent and Milanovic’s bloc on 31.9 percent. That suggests smaller parties may yet decide who gets to govern.

Croatia, which joined the EU in 2013, is emerging from its worst economic crisis since the country was forged in a 1991-95 war after splitting from Yugoslavia. Six years of recession wiped 13 percent off national output.

Output is expected to grow around one percent this year. But analysts say the government has failed to reform the economy enough for strong long-term growth, to contain public debt and significantly reduce unemployment, now around 16 percent.

President Kolinda Grabar-Kitarovic, who was elected in January from the ranks of the HDZ, called the regular parliamentary vote for Nov. 8.

The HDZ says that, if elected, it will have the economy growing by five percent by the end of the four-year mandate. Critics, however, say its program offers little radically new, and it is unclear on how it would tackle Croatia’s bloated public sector, a task successive governments have ducked.

”We see few details and key differences in the economic rhetoric offered by the top parties,” said economic analyst Damir Novotny.

“They both promise growth will accelerate, but without making clear how they plan to change an economy still dominated by the state and with a relatively weak private sector.”

The migrant crisis has injected fresh uncertainty, with almost 120,000 people flowing across Croatia’s eastern border since mid-September, when Hungary closed off access across its southern border with Serbia.

The influx has strained ties between fellow EU members Croatia and Hungary and triggered a bitter border row between Croatia and Serbia, foes during Yugoslavia’s collapse.

Analysts said Milanovic may have benefited in the short term, but that things might change if Hungary follows through on a threat to close off access to migrants along its frontier with Croatia, too.

“The government’s humane attitude toward the migrants strike a chord among local people who remember suffering from the independence war in the 1990s,” said political analyst Ivan Rimac.

But another analyst, Davor Gjenero, warned: ”A month or so is a long period, and we still don’t know what could happen if there are more border closures and if the migrants get stuck in Croatia.”

Reporting by Igor Ilic; Editing by Matt Robinson and Larry King

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