Croatia on the Eve of EU Membership
As Croatia prepares to join the European Union on July 1, its citizens continue to debate the broader economic implications of the coming transition. During a three day stay in Zagreb, participants of GMF’s Transatlantic Leadership Seminar met with a range of political leaders, entrepreneurs, and civil society leaders to discuss Croatia’s emergence from conflict and its prospects for the future.
Vesna Pusnic, First Deputy Prime Minister and Minister of Foreign and European Affairs, stressed the landmark status of EU membership. An unstructured labor market and poor climate for public enterprise continue to limit Croatian growth, but membership in the EU will quicken liberalization. The very act of applying for EU membership has begun to change Croatian political culture. The translation of 140,000 pages of EU regulations into Croatian and the painstaking process of aligning local laws with EU standards has shifted the terms on which local politicians and bureaucrats conduct public affairs, and changed the tone of public discourse.
EU membership also stands as an important symbolic move for the wider region, noted Seminar leader and GMF Vice President, Ivan Vejvoda. Croatia’s successful bid signals to other countries that the application process is fair and transparent. Croatia’s membership will likely attract significant foreign investment in the region and pave a path to membership for neighbor states like Serbia.
Seminar participants also met with creative entrepreneurs from the public relations and media strategy firm Bruketa&Zinic. The group met over locally produced wine and artisanal hors d’oeuvres in the firm’s ultra-modern headquarters accented with visual puns and whimsical vignettes. The founder of the startup, Davor Bruketa, and his team are all under 35, locally educated, and have executed some of the nation’s most celebrated recent ad campaigns. Yet Bruketa also noted that while the Croatian business climate continues to improve, the export market for local talent remains competitive. Despite being ranked the world’s second most effective agency internationally, his team continues to lose out on bids for contracts from multinationals to higher profile firms based in international metropoles like New York. Though they generate and execute equally sophisticated concepts at a fraction of the price and enjoy tremendous local success, Bruketa&Zinic struggles to gain a foothold beyond Croatia and traditional trade partners, Italy and Austria. It remains to be seen whether EU membership will help shift perceptions, though the indicators are positive, considering entrepreneurialism is a key predictor of economic growth.
Croatia’s economic future appears bright compared to the business climate in Bosnia, where Leadership Seminar participants learned earlier in the week that the country remains so divided along language and ethnic lines, that foreign investors cannot afford to devise strategies to penetrate what remains essentially three separate markets dividing one small nation. In Zagreb, meanwhile, street cars glide across the main square with two flags affixed to their helms: the Croatian waving on one side and the European on the other.
The Transatlantic Leadership Seminar moves next to Belgrade. GMF’s Leadership Seminars take participants to regions of the globe that have recently experienced significant change to study effective leadership in action.