Croatia’s year of EU entry seen as slipping to 2010 or possibly later

ZAGREB (Reuters) – Croatia is unlikely to join the European Union before 2010 and is also seen as struggling to cut its budget deficit to below 3 percent of gross domestic product, a Reuters quarterly poll showed yesterday. Prime Minister Ivo Sanader’s government, which faces a general election in November, has made membership in the EU and NATO its top priority. While it is almost certain to be invited to join NATO next year, its earlier aim to enter the EU in 2009 looks unfeasible and the EU has so far refrained from setting an entry date. Only one of 11 local analysts polled by Reuters expects EU membership to remain on schedule, which diplomats have always referred to as overambitious. Five analysts put 2010 as the entry year, four opted for 2011 and one for 2012. «Croatia has yet to meet conditions for opening two, in my view, most difficult negotiation areas – competition policy and judiciary. Also, it will take time to ratify the accession treaty in all 27 member states,» said Goran Saravanja, an analyst at CAIB investment bank, who predicted 2012 as the entry date. The budget deficit, which Sanader’s government has halved from around 6 percent of GDP in 2003 to 3 percent in 2006 is likely to hover around those levels this year and next despite government efforts. Most analysts expect this year’s fiscal gap to end higher than the planned 2.8 percent of GDP. The median figure in the poll put it at 3.3 percent. «The state did not include in the fiscal deficit projection the repayment of its debt to pensioners. Also, this is an election year and it’s possible that expenditures will rise even though revenue collection is also doing well,» said Ivan Mrsic of Splitska Banka, part of France’s Societe General. Only a marginal reduction was seen in 2008, when Zagreb hopes to conclude most of its negotiations with the EU, with analysts putting it at 3.0 percent – the ceiling for countries wishing to join the eurozone.

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