Croatia set to sign landmark stability deal with Union

Date: 26/04/01

By Simon Taylor

CROATIA could next month become the second former Yugoslav republic to strike a landmark economic and trade deal with the EU.

Diplomats say Zagreb is expected to wrap up negotiations on a Stability and Association Agreement (SAA) with the Union in the coming weeks, giving pro-reform forces a major boost in the run-up to local elections on 20 May.

"It is important that the European flag is kept flying high," said one Swedish diplomat, referring to the Union's policy of offering the prospect of eventual EU membership as an incentive to reform.

The EU is keen to show Croatians that their country can move closer to the Union provided it keeps on the path of reform and does not back nationalist politicians who have been gaining ground in Bosnia.

But diplomats say chances of striking a deal in time for the May deadline could be jeopardised if some Mediterranean countries insist on Croatia making further agricultural trade concessions. Spain is reportedly calling for safeguards on the exports of "Mediterranean" products including olive oil.

"The Croatians have shown willingness to compromise," said one EU official.

Croatian diplomats say agreeing to open the country's markets to imports of industrial products from the EU has been a painful step which had provoked opposition from domestic business groups.

Officials say that provided the outstanding issues can be resolved at a meeting between Croatian negotiators and their Commission counterparts this week, the agreement could be endorsed by EU ambassadors with formal approval by foreign ministers at their next session on 14 May.

The Former Yugoslav Republic of Macedonia became the first Balkan state to sign a Stability and Association Agreement with the EU in April.

Croatia could become the second former Yugoslav republic to strike a landmark economic and trade deal with the EU.