Just a couple of days before the parliamentary election was held on 5 July, Croatia handed over the presidency of the Council of the EU to Germany. Symbolically, 1 July also marked the 7^th anniversary of Croatia becoming the EU’s 28^th member state, the last enlargement of the European Union and the culmination of a journey which started 17 years ago. Given that context, it is not surprising that Croatia pushed hard during the presidency in favour of the next enlargement.

Presidency marked by the COVID-19 pandemic

The COVID-19 pandemic changed the world, set a “new normal” and changed the Croatian presidency. It will surely go into the history books, and not just because the large majority of meetings and conferences were transferred online. Before it all started, Prime Minister Andrej Plenković presented the top three priorities – Brexit, the Multiannual Financial Framework, and the EU-Western Balkan Summit – but all three were altered by the pandemic. If the pandemic was not enough, Zagreb, the Croatian capital, was hit by the major earthquake which left many families without homes and is estimated to have caused up to €7 billion in damage.

While the COVID-19 pandemic engulfed the world, Brexit dropped down the priority list, especially as the lockdowns across Europe stalled economic activity. The Croatian presidency had no influence over the matter and it will now be up to the Germany to oversee the arrangements between the EU and UK.

Negotiations on the Multiannual Financial Framework were, naturally, also transformed by the COVID-19 pandemic and the hole it created in state budgets across the EU. Two years have passed since the first adoption of the MFF proposal for 2021-2027. On 27 May, it was revamped with the ‘Next Generation EU’ recovery plan which proposed a budget of €750 billion as a temporary reinforcement of EU economies alongside the MFF’s budget of €1,100 billion. It is planned that Croatia will receive up to €10 billion and given the latest GDP projections – a 10.8% decrease – the funds will certainly be needed to kick-start the Croatian economy. The agreement has not been reached yet, as some countries, such as, Austria, Denmark, the Netherlands and Sweden, are pushing for a lower level of spending and, again, it will now be up to Germany to lead the negotiations to their conclusion.

Balkan Summit and the Zagreb Declaration

It is no secret that Andrej Plenkovic marked EU enlargement as the top priority and the biggest success of the presidency. The Summit became a virtual meeting where EU and Western Balkan leaders (Albania, Bosnia and Herzegovina, Serbia, Montenegro, the Republic of North Macedonia and Kosovo) discussed the future of the region. Croatia wanted to spark the idea of the next enlargement, but the word enlargement was omitted from the Zagreb Declaration that was adopted during the meeting. Instead, EU leaders reaffirmed “unequivocal support for the European perspective of the Western Balkans” and the Summit itself was directed towards financially supporting the Western Balkans – where a package of over €3.3 billion was mobilised for the immediate support of the health sector.

Grayling’s commentary

Not only did the COVID-19 pandemic overshadow the Croatian presidency, it will certainly impact the German presidency as well. The new normal will shape politics and policy in multiple ways in the years to come. Croatia’s biggest priority – achieving a breakthrough on EU expansion – was only half achieved. EU leaders gave the green light but did not commit to any immediate enlargement plans.

Unsurprisingly, Croatia did not have a significant influence in the MFF and Next Generation EU plans but is certainly counting on those grants from the EU. Croatia is a small country with limited influence in Brussels and was always unlikely to shape the most important policies which will guide the future of EU – that is for countries such as France and Germany.

Croatia was a bystander and missed an opportunity to form alliances with other countries like Slovenia, Czechia, Slovakia etc. to push a joint agenda which could potentially have achieved better socioeconomic results for Central and Eastern Europe.

Lastly, during the lockdown, Croatia was called out for staying silent at Hungary’s (and, to a lesser extent, Poland’s) undermining of the rule of law. However, in the end, other countries did the same thing. Even though the fundamental principles of democracy may have been affected, but it is up to EU as a whole to form a strong and unified response to these situations.

***

Through its offices in Zagreb and Brussels, Grayling is strongly positioned to support clients with market intelligence, Public Affairs activities, stakeholder outreach etc.