EU report says Croatia must work harder

The European commission’s progress report on Croatia’s EU bid shows that substantial progress is needed, particularly on judicial reform, corruption and economic reform.

The November 8 report is an important milestone for Croatia, which started its EU talks in October 2005.

It says that while the country has a functioning market economy and an improved political situation, it still has a way to go before it is ready to join the EU.

“It will not be a walk in the park,” warned EU enlargement commissioner Olli Rehn. 

Political criteria

The report says “significant challenges lie ahead” before Croatia’s parliament fulfils the criteria on democracy and the rule of law – notably on tackling conflicts of interest.

It goes on to argue that the reform of the country’s public administration “continues to represent a major challenge”, with limited progress in the decentralization process and the police reform.

The judicial system is also inadequate: the paper asserts that “Croatia is still some way from enjoying an independent, impartial, transparent and efficient judicial system, the establishment of which will be an important indicator of Croatia’s readiness for eventual membership”.

Corruption is listed as a “serious problem” – “there continues to be a need for greater efforts to proactively prevent, detect and effectively prosecute corruption”, the paper says.

Implementation of a law protecting minorities “continues to be slow and problems persist particularly in terms of under-representation of minorities in state administration, the judiciary and the police”.

Economic criteria

Brussels notes that “economic growth has continued on the back of stronger private investment” but flags up a few areas of concern in economic policy.

“A relatively high unemployment rate and limited job turnover and job creation remain some of the most pressing economic problems,” the report argues.

While “important public finance reform measures” are being implemented in the country, “significant fiscal risks remain” and “the transparency of public debt management remains weak”.

The report argues that Croatia’s macroeconomic policy has been “largely adequate” but that “fiscal consolidation needs to be strengthened”.

It also emphasises that “state intervention in the productive sector remains significant” and that privatisation has proceeded at a pace “significantly slower than envisaged”.

Specific chapters

The second half of the report assesses Croatia’s ability to “assume the obligations of membership” according to the 33 chapters of the EU acquis.

Progress on the free movement of goods has been “uneven”, with “little progress” made on aligning Croatia’s law with the EU’s general principles.

The report says Croatia has achieved “limited progress” on the free movement of workers, adding that Zagreb will have to make “considerable and sustained efforts…particularly in terms of developing administrative capacity for the coordination of the social security systems”.

Brussels warns that there has been “limited progress” on employment policy, noting that “specific gaps” remain with regard to administrative capacity.

“Substantial efforts” are also required in chapter 23 on the judiciary and fundamental rights: the report notes that “improving the functioning of the judiciary remains a major challenge for Croatia” and adds that the fight against corruption “remains a serious problem”. 

On the environment, the report notes “good progress” on areas including nature protection and GMOs but insists that “very significant efforts are still needed”, with weak administrative capacity and a lack of strategies for financing.

Chapter 4 on the free movement of capital notes “some progress” but adds that money laundering laws “need further alignment” and that “administrative and enforcement capacity should be strengthened”.

On food safety, Brussels urges Croatia to make “substantial efforts” to speed up its implementation on food and veterinary safety.

The paper is more positive on the law chapters: it says good progress has been made on company law and adds that continued efforts should enable Zagreb to also meet the requirements on intellectual property law.

Macedonia: efforts must be stepped up

A separate commission report assesses Macedonia’s EU bid, concluding that it is “well on the way to satisfy the political criteria” and “well advanced in establishing a functioning market economy” but must step up its overall efforts.

“Macedonia has continued to make progress but at a slower pace,” Rehn warned.

The report says reforms of the police and judiciary must be implemented.

“Concrete results in the fight against corruption remain to be achieved, which will require strong political will and the full implementation of the legal framework,” it goes on.

In the economic field, Brussels notes “institutional weaknesses such as cumbersome administrative procedures, corruption, as well as a low degree of legal certainty, affecting the business climate and a proper functioning of the market economy”.

“Labour and financial markets are functioning badly, and the informal sector distorts the economy,” the report says.

It also points to a number of “major challenges” in preparing for the internal market, noting that Macedonia “needs to intensify its efforts in areas such as agriculture, food safety, competition, environment, justice, freedom and security”.

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