With or without EU

In 2005, the biggest news in Croatia revolved around the interconnecting issues of co-operation with The Hague War Crimes Tribunal and the start of accession negotiations with the EU. In March, the start of negotiations was postponed as one of the Tribunal’s most wanted, General Ante Gotovina, was still at large, leading to criticism that the Croatian government wasn’t doing enough to bring suspected war criminals to justice.

Although little had actually changed in that the elusive general still roamed free, on the 4th October a new verdict was passed: the Croatian government was doing everything that could reasonably be expected to find and arrest Gotovina. Negotiations were officially opened forthwith. The government was jubilant, but rumbles of dissatisfaction could be clearly heard from the country’s Euro-sceptics.

A feeling prevails that, on entering the EU, Croatia will resemble Harrods at the January sales—buyers queuing up to ransack the shelves, leaving behind a trail of devastation and a few dishevelled shop assistants to pick up the pieces. One indicator of such confidence in an influx of moneyed investors is the pace at which commercial real estate is springing up in Zagreb. A city of less than a million souls will soon have over one million square metres of office space. A little optimistic, maybe?

The fact is that whoever wants to be a serious player in Croatia is very probably already over here. The multinationals are very bold about venturing into new, 'risky’ markets. They arrived in Croatia as soon as the dust of the war had—more or less—died down. Once here, they found themselves competing for the custom of a few million people against some robust local competition.

Nowadays, only products and services of exceptionally high quality, low price or unique appeal stand a chance. Croatians are also keen to assist in the creation of local jobs by supporting local industry where possible. Business-friendly developments such as the simplification of the process for starting up a business and a tidier, digital land registry, are sure to be joined by further incentives for foreign investors, particularly for greenfield developments.

But a small population and the restricted amount of property for sale mean that the Croatian market has limits and that the EU-generated tide of incomers may wash over unnoticed.