Croatia: country overview

Croatia is an acceeding country. The EU and Croatian leaders signed Croatia's EU Accession Treaty on 9 December 2011. Subject to ratification of the Treaty by all the Member States and Croatia, Croatia will become the EU's 28th Member State on 1 July 2013.

Political system: Presidential/parliamentary democracy

Capital city: Zagreb

Total area: 56 594 km²

Population: 4.48 million

Currency: kuna

Official language: Croatian

Country overview

Croatia applied for EU membership in 2003 and was in negotiations from 2005 until 2011.

On 9 December 2011 leaders from the EU and Croatia signed the accession treaty. Subject to its ratification by all EU countries and Croatia, then the country will become the 28th EU member country on 1 July 2013.

Throughout the interim period until the accession, Croatia as an acceding country will have active observer status in the European Institutions. The purpose is to allow Croatia to become familiar with the working methods of the EU institutions and to be involved in the decision-making process.

Economy Overview

Though still one of the wealthiest of the former Yugoslav republics, Croatia's economy suffered badly during the 1991-95 war. The country's output during that time collapsed and Croatia missed the early waves of investment in Central and Eastern Europe that followed the fall of the Berlin Wall. Between 2000 and 2007, however, Croatia's economic fortunes began to improve slowly with moderate but steady GDP growth between 4% and 6% led by a rebound in tourism and credit-driven consumer spending. Inflation over the same period remained tame and the currency, the kuna, stable. Croatia experienced an abrupt slowdown in the economy in 2008 and has yet to recover. Difficult problems still remain, including a stubbornly high unemployment rate, a growing trade deficit, uneven regional development, and a challenging investment climate. The new government has announced a more flexible approach to privatization, including the sale in the coming years of state-owned businesses that are not of strategic importance. While macroeconomic stabilization has largely been achieved, structural reforms lag. Croatia will face significant pressure as a result of the global financial crisis, due to reduced exports and capital inflows. Croatia re-entered a recession in 2012 and Zagreb cut spending, particularly on social programs. Croatia's high foreign debt, anaemic export sector, strained state budget, and over-reliance on tourism revenue will hinder economic progress over the medium term.

Source: Europa, The World Factbook