Croatia may have just become that one party guest who turned up when all the booze had run out and the cops were on their way.
Last weekend, Croats took to the polls to vote on a referendum determining whether or not the country could proceed towards accession into the European Union (E.U). With almost all votes counted, 66 per cent of Croats supported membership, 33 per cent were opposed and 1 per cent of ballots were invalid. It was estimated that 44 per cent of Croatian voters turned up to the polls.
The higher than expected “yes” vote would have certainly eased fears in Brussels of a backlash after the lead up to the referendum coincided with the EU facing its worst economic crisis to date. However, Croatia currently finds itself facing a high unemployment rate of 17% and a large deficit. The Global Financial Crisis heavily hit its tourist-based economy and the country has been in recession in 2009. The Croatian War of Independence in 1991 structurally weakened the Croatian economy as previously steps were being taken towards privatization and a move towards a market driven economy. From 1989 to 1993, Gross Domestic Product fell 40.5%.
Croatia now finds itself in a position similar to countries such as Ireland and Portugal upon their entry into the EU; structurally weak economies that see the EU and its common market and currency as providing a path to prosperity. If Croatia becomes a full member in July 2013, the country can begin to benefit from the various structural funds available and will eventually work towards preparing its economy for entry into the Eurozone.
But in the meanwhile, it is interesting to note that even after months of speculation about the future of the EU and the Euro, enlargement is still a reality. There still remain potential member states such as Turkey and Iceland waiting in the wings. And yet, it appears that the internal battles between member states over how the current crisis should be resolved are yet to finish. Earlier this month, we witnessed Brussels’ main bailout fund being stripped of its AAA rating and there is still the matter of Merkozy’s new treaty being taken to national parliaments and referendums within the next few months.
It is hard to predict how 2012 will pan out for Europe. Perhaps Merkozy and Co. should take a gander at this Guardian editorial from the 18th of January:
If the European project can be summed up in a word, that word is supposed to be solidarity. It has been evident from the beginning that this is exactly what is required to escape the eurozone’s crisis. If its disparate nations could only make common commitments to creditors, take common responsibility for co-ordinating themselves and submit to common disciplines, then the emergency would be over. A shared debt burden, comparable to America’s, could then be managed over the decades, not through panic measures every few weeks.
As nice as that sounds, the reality most likely is we are facing a year of Europe plodding along with various wheelings, dealings and multiple referendums.