Croatia gears up for EU entry amid economic worries

(ZAGREB) - Croatia is gearing up to lavishly celebrate joining the European Union on July 1, but economic worries are overshadowing the festivities planned to mark the successful end of the Balkan country's 10-year bid for membership.

More than 100 European dignitaries -- among them German Chancellor Angela Merkel and European Council president Herman Van Rompuy -- will fly into Zagreb to join top Croatian officials and thousands of citizens attending celebrations at the capital's main square.

Symbolically, at midnight on Sunday, the "Customs" sign will be removed at a border crossing with Slovenia, the only other former Yugoslav republic that has joined the EU since the bloody breakup of the ex-communist federation in 1990s.

At the same time, the "EU" sign will be put up on the land border with Serbia, another former Yugoslav republic which is struggling to get a date to start membership negotiations with the bloc.

Fireworks will light up the skies over Zagreb and other Croatian towns as part of the celebrations, but for many of the country's 4.2 million inhabitants, membership of the EU has lost its sparkle.

Croatian President Ivo Josipovic, himself a strong supporter of EU entry, acknowledged the crisis within the bloc had influenced the mood in the country.

"But we are stronger together... and the only way out from the crisis is through 'more Europe and not less Europe,'" Josipovic told AFP in an interview.

Recent surveys show that support for Croatia's EU entry is now just above 50 percent, while only one of seven Croatians wants fireworks and concerts to celebrate EU membership.

"What is there to celebrate? The fact that our politicians have secured their future and that we will be slaves as we are too small to have any influence among the big guys," wondered Zorka Horvat, a Zagreb administrator in her 50s.

A decade ago most Croatians embraced the prospect of EU membership as a way to leave behind the legacy of the 1990s Balkans wars. But prolonged accession talks and difficult demands from Brussels have turned many towards euroscepticism.

Croatian macro-economic figures are worrisome. The country will be among the poorest in the EU, which itself is struggling with recession in nine of its member states and with the eurozone debt crisis.

Croatia's per capita gross domestic product (GDP) is 39 percent below the EU average, with only Romania and Bulgaria behind it, the EU's statistics office Eurostat figures show.

The 2008 financial crisis in the EU, which accounts for 60 percent of Croatian exports, sent the country's economy, oriented mostly on tourism, into a tailspin.

The economy has either been in recession or stagnated in the past four years. Unemployment is around 20 percent.

"We, seriously ill, are joining the EU, which is itself seriously ill," prominent analyst Zarko Puhovski warned.

Loss-making shipyards have been shut down or restructured.

A major clampdown on corruption has been conducted. Former prime minister Ivo Sanader was jailed for 10 years for graft and several ministers and ruling party officials have also been convicted of corruption.

The government hopes that EU membership will send a signal of stability for badly needed foreign investment and is eyeing 11.7 billion euros ($15 billion) of potential EU financial aid.

Political demands from Brussels included extraditing to a UN war crimes court some of Croatia's top army officers, considered heroes by many at home, and improving minority rights for ethnic Serbs, with whom relations have remained strained since the war.

Former president Stipe Mesic, one of the architects of Zagreb's EU membership bid, told AFP that "July 1 will mark the end of a long journey."

"We definitely moved away from narrow-minded nationalism that marked the first years of our independence and accepted European standards," said Mesic.

The influential daily Novi List noted in an editorial that "Croatians share the feeling that the EU is no longer a secure shelter or salvation."

"But the only alternative to Europe would be a return to what we had yesterday, and we know that we do not want that," it said.

Factfile on Croatia