Croat President Taps HDZ Leader Plenkovic to Lead Government

  • HDZ, Bridge parties agreed last week to form ruling coalition
  • Plenkovic must be approved by parliament in next 60 days

Croatian President Kolinda Grabar Kitarovic nominated Andrej Plenkovic of the conservative Croatian Democratic Union to become prime minister, setting the stage for a new government to end months of uncertainty that threatened to an undermine economic recovery.

Plenkovic demonstrated at a meeting in Zagreb on Monday that he had the backing of 91 lawmakers in the 151-member parliament, Kitarovic said in a live address on state TV. The Croatian Democratic Union, known as HDZ, and the smaller Bridge party won a combined 74 mandates in last month’s elections. They also have support from the Croatian Peasant Party, deputies representing ethnic minorities, and others. Plenkovic has 60 days to win confirmation in parliament, which will next meet Friday.

“Economy, jobs, legal security and demographic renewal will be the new government’s priorities,” Plenkovic told reporters after receiving the nomination. “Together with our partners, we will also work on creating an inclusive, tolerant society.”

The prospect of a new government may end political turmoil that has prevailed since the June collapse of the previous government, also composed of HDZ and Bridge, in a conflict-of-interest scandal surrounding former HDZ leader Tomislav Karamarko. The cabinet’s collapse delayed a planned administrative overhaul and threatened to impede recovery from the longest recession on record in the European Union nation of 4.2 million.

"The first thing the new government needs to do is to introduce a budget proposal for 2017 before the end of this year, and to cut expenditure,” Velimir Sonje, an analyst at Arhivanalitika, a forecasting and advisory firm in Zagreb, said by phone.

Finance Portfolio

Plenkovic, a 46-year-old career diplomat who took over at the HDZ’s helm in July, last week said junior partner Bridge would control the ministries of interior, justice, administration, and of environment and energy, while signaling the Finance Ministry, currently headed by HDZ appointee Zdravko Maric, would stay under his party’s control.

Under Plenkovic’s leadership, HDZ has pledged to cut income and value added taxes. He has also vowed to reduce public debt, which reached 87 percent of gross domestic product after a 2008-2014 recession wiped out 12 percent of economic output.

Bridge, an alliance of local mayors led by psychiatrist Bozo Petrov, has demanded the creation of an exclusive economic and fishing zone in the Adriatic Sea, fewer benefits for politicians and lawmakers, and more control over the central bank, a goal that’s already drawn criticism from the European Central Bank.

The yield on the governmentás euro-denominated bond maturing in 2025 traded at 2.863 percent at 1:16 p.m. in Zagreb, unchanged from Friday. The yield hit a record-low 2.68 percent on Sept. 29.

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