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INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 03 ZAGREB 000950 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EUR/PPD, EUR/SCE, DRL, INR 
 
E.O. 12958: N/A 
TAGS: PREL PGOV HR POLITICAL PARTIES
SUBJECT: SCENESETTER FOR CROATIA'S NOVEMBER 25 PARLIAMENTARY 
ELECTIONS 
 
¶1. This is the first in a series of reports on Croatia's upcoming 
elections, providing a general overview of the issues central to the 
election.  Further installments will discuss specific parties and 
issues in greater detail. 
 
¶2. SUMMARY: As Croatia gears up for parliamentary elections 
tentatively scheduled for November 25, polls are predicting a very 
close race between the ruling center-right Croatian Democratic Union 
(HDZ) and its biggest opponent, the center-left Social-Democratic 
Party (SDP). With few differences between the parties' campaign 
platforms, swing voters are expected to be swayed primarily by their 
perceptions of candidates' credibility and honesty.  The results 
will also depend on the degree to which the Croatian electorate 
expresses its desire for a change of government. Neither major party 
is likely to win an absolute majority on election day, and will 
therefore need coalitions with smaller parties in order to form the 
next government. One thing is clear: neither an SDP nor an HDZ 
victory will represent a significant departure from Croatia's 
bilateral relationships and multilateral commitments.  END SUMMARY. 
 
 
TIMELINE: ELECTION DAY WILL BE NOVEMBER 25 
-------------------------------- 
 
¶3. On September 17, 2007 the Speaker of the Parliament announced 
that the Croatian parliamentary elections would "most certainly" 
take place on November 25, 2007.  Croatia's current Parliament, 
formed for a four-year term after the November 2003 elections, has 
152 members representing 12 electoral districts.  At the last 
election, Croatia had 4.4 million voters registered, including some 
some 400,000 registered Croatian citizens in the diaspora, mostly in 
Bosnia and Herzegovina. (NOTE: Only 2.2 million votes were cast in 
the last election.  NGOs and other observers have pointed out that, 
in a country with an estimated population of 4.4 million, having 4 
million domestically registered is surely an inflated figure, 
although no serious allegations of ballot-box stuffing have been 
made.  Efforts to clean up the register, deleting deceased 
individuals and multiple addresses, have been underway, but no 
official number of registered voters for the upcoming election have 
yet been issued.  END NOTE.) 
 
THE PLAYERS: IT'S HDZ VS. SDP 
--------------------------- 
 
¶4. GOVERNING MAJORITY: In the current Parliament, the HDZ holds 62 
seats and heads the ruling majority in coalition with a host of 
smaller parties: Croatian Social Liberal Party (HSLS - 3 seats), 
Croatian Party of Pensioners (HSU - 3 seats), eight representatives 
of national minorities, and two independents.  The right-wing 
Croatian Party of Right (HSP - 7 seats) generally votes with the 
governing coalition, although it has not formally joined the 
coalition. 
 
¶5. THE OPPOSITION: The opposition consists of the SDP which 
currently holds 33 seats, in coalition with the Croatian People's 
Party - Liberal Democrats (HNS - 11 seats), Croatian Peasant Party 
(HSS - 9 seats) and the Istrian Democratic Congress (IDS - 4 seats). 
The far-right Croatian Democratic Alliance of Slavonija and Baranja 
(HDSSB - 3 seats), and the lone Democratic Center (DC) 
representative also consistently vote against the government. 
 
THE POLLS: INCREASINGLY, A DEAD HEAT 
------------------------------ 
 
¶6. According to the International Republican Institute opinion poll 
conducted in September, if the elections were held today, 30.2% of 
voters would vote for SDP and 26.6% for HDZ. No other party earned 
more than 8%.  Translated into parliamentary seats, SDP would win 58 
and HDZ 51, leaving both parties in need of coalition partners to 
assemble a majority (currently 77 seats). The SDP's lead has been 
slipping gradually throughout the year, since a peak just after the 
illness and death of former SDP leader Ivica Racan galvanized public 
support for the SDP. 
 
CAMPAIGN PLATFORMS: LITTLE TO CHOOSE BETWEEN 
---------------------------------- 
 
¶7. With less than two months to go, the parties are busy preparing 
their electoral slates. Even with the campaign rhetoric heating up 
during and after the conventions, however, few dramatic differences 
exist between the major political parties' campaign platforms. 
Reduction of unemployment, accelerated economic growth, the fight 
against corruption, judicial, fiscal and health reforms, decreasing 
the budget deficit, cautious privatization, membership in EU and 
NATO, are all shared themes of both parties' platforms.  Minor 
policy differences, such as whether to introduce a capital gains 
tax, or whether to call a public referendum as a prelude to joining 
NATO (both of which are favored by the SDP), do not seem to have 
caught the electorate's attention so far.  The elections are 
therefore expected to center more on personalities, i.e. on which 
 
ZAGREB 00000950  002 OF 003 
 
 
party is seen as more honest or less corrupt, and which is more 
credible that it will be able to deliver the promised policies. 
Public opinion on which party is more competent is split, depending 
on the issue.  According to IRI's April 2007 poll, SDP was perceived 
as a better solver of Croatia's key problems - from economic 
development and unemployment to corruption, workers' rights and 
health and education. HDZ was perceived as more successful in 
bringing Croatia into NATO and EU, helping war veterans and 
defending the dignity of Croatia's Homeland War. 
 
PERSONALITY FACTOR: STRONG LEADER VS. STRONG TEAM 
---------------------------------- 
 
¶8. One local observer has told the Embassy the campaign battle 
essentially consists of one side (HDZ) "with a strong leader but a 
weak team", and another (SDP) "with a stronger team, but untested, 
even uncertain, leadership."  Croatian Prime Minister Ivo Sanader, 
who is also president of the HDZ, remains a relatively respected 
figure for most Croatians, after four years in the office. The party 
he leads, however, has been tainted by corruption allegations and 
scandals. Most of his ministers are inconspicuous figures whose 
accomplishments are few and little known to the average Croatian 
voter, while others are polarizing figures who appeal to parts of 
the HDZ's political base, but also suffer high negatives. 
 
¶9. The SDP will also be banking heavily on its belief that Croatian 
voters are simply ready for a change. 
The SDP leader, 41-year old Zoran Milanovic, clearly represents the 
face of a new generation of Croatian politicians.  The election in 
June of this young urban professional as the president of SDP, 
combined with sympathetic nostalgia at the passing of former PM 
Racan, contributed to an upsurge in SDP popularity.  Milanovic has 
sought to leverage his popularity, and to signal the SDP's breadth 
of competence, by personally rolling out a slate of SDP candidates 
for ministerial positions who are in general well-respected 
individuals.  This effort to impress voters with the strength of the 
SDP's team, however, has been complicated by the SDP's decision to 
nominate economist Ljubo Jurcic, rather than party president 
Milanovic, as the party's choice for Prime Minister.  Both Milanovic 
and the party insist there is no discussion, but several 
non-partisan Embassy contacts have suggested that after the 
elections the SDP may look to shift Jurcic aside in favor of 
Milanovic. 
 
WILD CARDS: THE DIASPORA AND THE SMALLER PARTIES 
------------------------------------ 
 
¶10. With the election likely to be a dead heat between the HDZ and 
SDP, other factors will gain in importance: the diaspora seats, how 
many seats smaller parties can hold on to, and with whom they decide 
to go into coalition. 
 
¶11. DIASPORA:  Under Croatia's electoral rules, since 1995, the 
seats of the eleventh electoral district come from votes of some 
400,000 Croatians who do not reside in Croatia, but rather largely 
live in neighboring Bosnia and Herzegovina.  Diaspora voters have 
generally leaned towards the HDZ, giving them all four diaspora 
deputies in the current Parliament. The number of seats from the 
diaspora is determined by a so-called "unfixed quota", based on the 
average number of votes cast for a seat in Croatia. In 2003, that 
number was 17,209. The greater diaspora turn-out at the election, 
the greater the number of diaspora seats in the Parliament. And 
vice-versa: the greater in-country turnout, the fewer diaspora 
representatives get elected. It is therefore theoretically possible 
that HDZ gets fewer votes than SDP in Croatia proper, but still wins 
most of the seats once the diaspora votes are added. 
 
¶12. COALITION POLITICS: As noted, either HDZ or SDP will likely need 
smaller parties to form a coalition government.  The SDP can almost 
certainly count on the support of the HNS and IDS parties.  The 
right-wing HSP and HDSSB are unacceptable coalition partners for the 
SDP, and the HDZ would accept a coalition with them only as a last 
resort.  Both the HNS and HSP, however, have experienced internal 
political struggles recently, leaving in doubt how many seats they 
may hold on to.  The pensioners of the HSU and the representatives 
of ethnic minorities, which are "interest groups" more than they are 
political parties, are expected to support whichever major party 
wins the most votes.  This could leave a centrist alliance of the 
HSLS and the HSS, where the former supported the HDZ government and 
the latter is currently in opposition, to tip the balance.  While 
HSLS and HSS politicians would relish the role, both parties have 
been fading political stars over the past eight years, and even if 
they end up as kingmakers, are not likely to be heavily influential 
ones. 
 
BOTTOM LINE:  EITHER PARTY A GOOD PARTNER FOR THE U.S. 
------------------------------ 
 
¶13. Both major parties are genuinely pro-Western and understand the 
need for continued reforms, so any government formed after the 
 
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elections should be one that can work well with the U.S.  The 
declared preference of the SDP to hold a referendum on NATO 
membership poses a political risk, if it is carried out, but it does 
not raise any question about the SDP's pro-NATO orientation.  On the 
other hand, the outside chance of an HDZ-led government that 
depended on the right-wing HSP, while not an appealing option, would 
be more likely to mean the dilution of the HSP's nationalist agenda, 
than to raise worries about Croatia's human rights performance.  In 
the end, the real impact of these elections on US interests, as for 
Croatia itself, will be whether it delivers a government that can 
effectively implement its program. 
 
BRADTKE