Croatia: The Kukuriku coalition dominates elections
Overview:
The Kukuriku coalition, a four-party coalition led by the SDP, won a solid majority in parliamentary elections over the weekend. The HDZ was heavily defeated as a result of a string of corruption scandals and poor economic performance. The new government will face significant challenges. The parties within it must seek to work more coherently together than was the case the last time the SDP came to power in 2000. The economic situation is also a lot worse. The economy is barely growing and public and external indebtedness has risen consistently over the last few years. Croatia has not had problems financing itself in the markets but this can no longer be taken for granted given the ongoing sovereign debt crisis and potential credit rating downgrades. A more flexible and competitive economy is needed to deliver growth.