Balkan tensions
February 2, 2013
There were obstacles to Croatia's membership of the European Union ever since the Balkan country took the first step to joining the bloc ten years ago. Chief among them has long been lack of cooperation with the war crimes tribunal in The Hague. But there is another roadblock, set by neighboring Slovenia, which is demanding a solution to an ongoing dispute concerning Slovenia's Ljubljanska Banka and its debts.
Ljubljanska Banka and its debts
When the former Yugoslavia crumbled at the beginning of the 1990s, its banking system fell apart with it. The Ljubljanska Banka, headquartered in Slovenia, was deemed unable to pay its debts, which meant many private depositors lost their savings. A portion of the bank's debts to Croatian depositors - about 278 million euros ($380 million) - was taken over by the Croatian government at the time. In 1993, a pair of Croatian banks paid the debts owed to former Ljubaljanska Banka customers.
Then the Croatian government permitted these two banks to demand the money they paid out be refunded by Slovenia. The Slovenian government, however, has called on Zagreb to withdraw that permission. That would make the 278 million euros simply another item on the list of payments made as part of Yugoslavia's still incomplete break-up process and part of the material legacy of the former Yugoslavia - and not a direct burden on the Slovenian budget.
No one has yet dared to predict what any future compromise could look like. Both sides have indicated that a solution may be in sight, but time is pressing - because without a deal on the Ljubljanska Banka issue, the Slovenian parliament will not ratify Croatia's entry into the EU. That puts the planned July 1 entry date in doubt.
Slovenia's domestic issues
Croatia's EU entry process has been delayed by its conflicts with Slovenia before. In 2010, Slovenia blocked further negotiations between Croatia and Brussels because the border between the two countries in the Gulf of Piran had not yet been legally set. Before that dispute, there had also been a row over the creation of an economic zone in the bay, but Croatia's unilateral decision was soon overturned by the Croatian parliament.
Slovenia's actions, meanwhile, have attracted criticism from European politicians. "It is completely unacceptable to hold up the expansion process with such bilateral problems," Elmar Brok, chairman of the European Parliament Committee on Foreign Affairs, told DW.
He also blames the new political conditions within Slovenia for the escalation of the bank conflict. Prime Minister Janez Jansa recently lost his majority in parliament after a critical report from the Slovenian anti-corruption authority, which is likely to trigger early elections. "It is always tempting to let questions escalate ahead of elections, even though you could easily solve them otherwise," said Brok, a member of the German center-right Christian Democratic Union.
No room for two bridges
On top of that, political analyst Denis Romac of the Croatian newspaper Novi believes it is in Slovenia's interests to be the only former Yugoslavian state to be an EU member. "It's not just about the symbolism, it's about the concrete economic advantages," he said. "Slovenia was the EU's gateway to the western Balkans, and Ljubljana profited from that a lot. Now that lucrative role will be taken over by Croatia."
Croatian politicians have indeed promoted their country's position as "the bridge between the EU and the western Balkans" since the entry negotiations began. Perhaps they have done that a little too often and too loud for Slovenia's taste, Romac conceded, but he added that from the EU's point-of-view, Slovenia has already squandered its privileged role through its irrational policy towards Croatia.
Croatiahas tried to avoid open conflict with Slovenia, for fear of endangering the difficult path to EU membership any further. Only the euroskeptics in the country have raised their voices, hoping to exploit the conflict with Slovenia to support their theories about what they call subjugation under Brussels. But leading Croatian politicians have repeatedly said that they would even help their other neighbors to become part of the EU.