Croatia: Podravka affair unsettles government
Overview:
The arrest of leading member of conglomerate Podravka has caused a major political storm in Croatia. Those arrested are implicated in a corporate governance scandal. However, as Podravka is both part-owned by the government and is also a major donator to leading political parties in Croatia the affair has also sparked allegations of incompetence and/or corruption against Deputy Prime Minister and Economy Minister Polancec. While no specific evidence has been produced to back these assertions Polancec’s assertion that he supports the management of Podravka have led to calls for his dismissal. Indeed, some junior coalition partners have threatened to leave the government over the issue. The leading coalition parties are backing Polancec for now but he may be replaced to limit the political fallout.