Croatia and EU enlargement
Croatia will become part of the EU on the 1st of July

On July 1st, 2013, Croatia will become the 28th member state to accede to the European Union. It will also be the second republic from former Yugoslavia and the eighth Mediterranean country to do so.

The difficult road to accession

Croatia submitted its membership application in 2003. The ensuing ten years – which included the negotiation of the accession treaty and its ratification – were anything but easy. Negotiations opened in 2005.

In 2008 talks stalled for over a year since two international disputes with Slovenia needed to be solved. One of these involved a maritime border in the Gulf of Piran whilst the other dealt with financial compensation for Croatian depositors who lost savings during the liquidation of the Ljubljanska Banka in the early 90s.

Negotiations were finalised in June 2011. In January 2012, Croatia held a referendum regarding EU accession. 66% voted in favour. The referendum had a low turnout of approximately 44%. After the referendum the Croatian Parliament unanimously ratified the Accession Treaty.

The last hurdle before accession was the ratification of the Treaty of Accession by the 27 member states. The dispute between Slovenia and Croatia was solved when both parties agreed to internationally brokered talks. This paved the way for ratification of the Treaty by the Slovenian Parliament.

The last country to ratify Croatia’s accession treaty was Germany. A progress report by the European Commission on Croatia's membership requested the urgent implementation of structural reforms. The report outlined some problematic areas such as the justice system, the fight against corruption and crime, and public administration. It urged the Croatian government to strengthen the rule of law and embark on economic reforms to help Croatia cope with the pressures of the single market. Germany withheld ratification until the publication of the last monitoring report, which was released on the 26th March.

Reforms

There is no disputing the initial economic and administrative challenges of membership. The single market offers Croatian industries the chance of opening up to 500 million customers. Conforming to competition rules and the standards of the single market is not easy. Nonetheless, adhering to these rules has the benefit of making industry more competitive.

These reforms have not been well received by everyone. Some view the opening of the market and the termination of state subsidies as being detrimental to the economy. They fear this will result in a rise in unemployment. Indirect taxation is expected to increase as a result of membership.

These challenges may be offset by Croatia’s direct access as a full-member state to the decision-making table. Moreover, Croatia will be able to benefit from a number of EU funds, may total up to 655million in 2013 alone.

EU enlargement in the Balkan region

Croatia’s success is likely to encourage applicant states in the Balkan region. The challenges these states face are very similar to those that Croatia managed to overcome. Concerns mostly centre on the strengthening of the rule of law and the democratic process, the fight against corruption and organised crime, as well as administrative and economic reforms.

The EU engages with the Western Balkans through its Stabilisation and Association Process. Albania, Bosnia-Herzegovina, the Former Yugoslav Republic of Macedonia, Montenegro, and Serbia have all signed a Stabilisation and Association Agreement which explicitly include provisions for future EU membership of the country involved.

Although progress has been slow, these developments show willingness and goodwill to engage. This augurs well for the future of the once war-torn region.

Beyond Lisbon

EU enlargement brings with it a number of positive benefits. The coming together of nation-states around a discussion table encourages debate. Nonetheless, stakeholders must also answer questions regarding the governability of an ever-enlarging union.

The Treaty of Lisbon was meant to “enhance the efficiency and democratic legitimacy of the Union and improve the coherence of its action.” Almost four years after this Treaty came into effect, one would doubt whether these aims can be met. Disgruntlement over the decision-making process and the democratic legitimacy of the EU are as pressing as ever before.

These concerns do not show any signs of decreasing. Indeed, this was one of the main concerns which emerged during the Croatian EU-accession referendum campaign. It is an issue which is raised every five years during the EU Parliament elections. 

There is no doubt that the process of enlargement should be encouraged to go ahead. Nonetheless, one should ask whether the time has come to question the overall governance model adopted and perhaps take difficult, but much needed, decisions in this regard.