LSE: Public Lectures and Events

Episode: Croatia’s EU Membership: Expectations and Realities
Date: February 24, 2014
Host: LSE Film and Audio Team
Speaker: Zoran Milanović, Prime Minister of Croatia

Overview

This episode features Croatian Prime Minister Zoran Milanović delivering a candid, nuanced, and often witty address on Croatia’s new status as the European Union’s 28th member. Milanović explores the expectations versus realities of EU membership, Croatia’s historical context, economic and social challenges, and the broader implications for EU integration in Southeastern Europe. The event also includes an open Q&A session covering everything from treaty reform and Balkan enlargement to youth unemployment, migration, investment climate, and social policy.

Main Themes

• EU Membership as Process, not Destination
• Economic “Straitjacket” and Reform Imperatives
• Challenges of EU Integration: Past, Present, and Future
• Domestic Social/Economic Issues: Unemployment, Youth, Investment & Growth
• Regional Relations and Enlargement (Balkans)
• Debate on “Enough Europe” and the Future of Integration
• Role of Social Policy and Minority Rights

Key Discussion Points and Insights

1. The Meaning of EU Membership

[01:29–06:00]

• Reflected on Croatia's lengthy, difficult path into the EU: wars, negotiations, and reforms.
• EU accession is “a journey, as a process, because process for me is more or less everything. And the goal, you never know when you get there.” (B: 01:51)
• Despite “harshly scrutinized” negotiations, Milanović sees the true reforms as just beginning: “Did we really reform? We didn't. Actually, it starts only now.” (B: 02:30)
• The major achievement so far was “transposition of a huge mass of documents and legislation into our legal system. Now it has to work.” (B: 02:46)

2. Historic Perspective: Yugoslavia and the EU

[06:00–08:20]

• Compared Yugoslavia’s failed attempt at economic harmonization with current EU imbalances.
• “70 years down the road, the regional imbalances… were exactly the same as in 1918… So the whole project was a failure.” (B: 05:53)
• Observed that, even post-crisis, relative European economic positions have hardly changed. Ireland being a rare exception.

3. The Reality of Economic Reform and Growth

[08:20–12:20]

• Warned against complacency: historic growth models are “simply not working anymore.”
• Urged Croatians to accept that “we unfortunately have to work more, have to be paid… less, to retain the current standard of living, not to go down, not to plunge.” (B: 09:08)
• Resistance to reform is natural, but unavoidable: “The bad thing is that we cannot pay for that. We don't have that money.” (B: 10:12)
• Praised Croatia’s assets (ports, educated workforce, tourism, shipbuilding) but noted demographic challenges.

4. Balancing Tourism and Industrial Heritage

[12:20–15:50]

• Tourist industry is “robust and growing,” but not a panacea: “Tourism is not necessarily the branch of the economy that employs the most highly talented and educated people.” (B: 12:37)
• Croatia’s shipbuilding once ranked globally but relied on unsustainable state subsidies; EU accession forced needed restructuring: “If it wasn’t for the EU… it would have never come to pass.” (B: 15:23)

5. The Straitjacket of Economic Stagnation

[15:50–16:04]

• Croatia has long been “in a kind of straitjacket… the economic and social level Croatia attained… at the beginning of the '70s…” (B: 07:15)
• Reforms and flexibility in labor markets are essential, but “not to the point of break.” (B: 15:41)

Notable Audience Q&A: Insights and Memorable Quotes

EU Membership: End or Beginning?

[16:21]
Kevin Featherstone: How do Croatians view EU membership and Milanović’s calls for sacrifice?

Milanović:

• “We're a Workers party, so people are presumably in favor of hard work, but also in favor of good remuneration… Decent pay for decent work. That's the platform on which we run at least once and won, but it's only a platform, it's not much more than that.” (B: 17:17)
• Voter turnout for the first European Parliament election was only around 19–20%: “So people didn't bother at all. It just passed by. It seems as if we have achieved one goal and it's here to stay. Now we have to make up our mind…” (B: 16:59)
• Optimistic about medium-term improvement: “I think we're going to be substantially better off in five years time.” (B: 18:51)

EU Treaty Reform & Free Movement

[20:00]
Journalist: View on treaty reform, free movement?
Milanović:

• “I'm not much in favor of any fundamental or in principle any changes to the existing framework, because that's something that we have agreed to.” (B: 20:48)
• On monetary union/fiscal discipline: “When you create a monetary union, some kind of fiscal discipline or fiscal grip must exist. And Europe had none.” (B: 21:21)
• “We have enough Europe and it's great, but it's enough.” (B: 22:28)

EU Enlargement: Western Balkans

[22:56]
Anthony Sheridan: Future membership for Montenegro, Serbia, others?
Milanović:

• Advocates for Bosnia and Herzegovina’s EU perspective: “If Europe really cannot absorb and digest Bosnia, then it’s not worth a thing.” (B: 24:34)
• Warns against exclusion: “I will not... exercise any kind of authority or mentorship over our recent neighbors. I'm not in that business… But as a Croatian politician and ethnic Croat, I cannot totally wipe the fact that half a million Croat citizens… live there. And they should have European perspective.” (B: 26:33)
• Montenegro is “the best off or better off than it was before. So I think the talks should start shortly.” (B: 28:13)

Youth Unemployment & Emigration

[28:24]
Jasmine Killen: Plan for Croatia’s young people?

Milanović:

• Blunt on demographics: “Now we are getting old as a society, and I'm afraid we're going to get old before we get rich, because we have promised ourselves things that we apparently will not be able to deliver.” (B: 29:31)
• Youth unemployment rate “is stunning. 50%... but it's not that huge, because... 95% youngsters [complete] secondary education… The quality is debatable.” (B: 29:53)
• Pledges efforts but is realistic: “There are solutions. There are youth guarantees… But whether we're going to deliver soon, I don't know. Nobody does.” (B: 31:39)
• “Those who adapt, they survive. That's very social democratic.” (B: 32:35)

UK Migration Debate & Croatian Perspective

[33:32]
Martin Kripps: How does Croatia view UK migration fears?

Milanović:

• “When we discuss immigration in Croatia, actually it's never been addressed as an issue and we'll certainly need some immigration.” (B: 34:17)
• On free movement: “People are much, much easier and much more comfortable coming over and searching for a job. I don't think it's hurt Britain, not at all. To the contrary.” (B: 35:29)

Investment Climate Obstacles

[36:44]
Audience: How is Croatia tackling difficulties for foreign investors?

Milanović:

• “The basis for all this is trust. Without trust there is no interconnections, there is no affinity or willingness of people to take risks.” (B: 37:14)
• Legal/investment framework is “just fine,” but “it's not enough.” Access to credit for SMEs is a particular barrier. (B: 39:17)

Regional Economic Cooperation

[40:18]
Audience: Is Croatia’s future regional?

Milanović:

• “Where else would Croatian entrepreneurs and industrialists invest, if not primarily [in the former Yugoslav region]? … But we should also project beyond.” (B: 41:02)
• Emphasized tourism and niche engineering exports as key areas. (B: 41:29)

Protests, Social Risk, and Social Policy

[43:45]
Bruna Škarica: Will there be social unrest?

Milanović:

• “Riot is not about competitiveness. Riots you had in England… It never happened in Zagreb. … What we have in place… is a kind of legitimate, sometimes aggressive conservative movement…” (B: 44:20)
• “We are very liberal government in social values… Croatia is not by definition liberal society.” (B: 45:39)
• Confident things will be “much better in five years time.” (B: 46:41)

The Euro and Convergence Criteria

[46:45]
John Hume: Will Croatia be forced to join the euro?

Milanović:

• “It's also our obligation… contingent upon fulfillment of certain conditions… We have been taken under the custody of the European Union lately in the so called excessive deficit procedure.” (B: 47:15)
• Fiscal discipline is both a technical and political challenge: “Technically always possible, but politically it's difficult…” (B: 48:21)
• “It's always about political ability, audacity and will to address issues...” (B: 48:53)

VAT Policy and Fiscal Fairness

[50:03]
BENJAMIN Baker: How do you justify VAT increases while wages fall?

Milanović:

• VAT has been increased, but with cuts elsewhere: “At the same time… we’re going to diminish some other taxes and lower the pressure on the employers and labor… It didn’t fly. It barely left a trace.” (B: 50:21)
• Essentials like bread taxed at 13%, lower than the standard: “It’s Difficult to explain to the person who is left to her own devices… But essentially our intentions were to make it easier on the labor side…” (B: 51:40)
• Croatia has “no property tax. Welcome to Croatia. Buy property, nil.” (B: 52:23)

Tourism as Economic Engine

[53:33]
Elvira Zelko: Tourism seasonality and local livelihoods

Milanović:

• “For many [coastal residents], it's supplementary activity… But it became serious business… and real enterprises and world class hotels… So it's actually, rather sophisticated economic activity, especially wanted to run throughout the year.” (B: 54:34)
• On zoning/environment: “The coast is empty, not polluted. So it's. It's simply waits to be properly used to be optimized.” (B: 55:06)

“Enough Europe”, Integration, and National Sovereignty

[56:07]
Cyprus High Commissioner: What is “enough Europe”?
Milanović:

• “When I said we have enough Europe, politically, I think I mean what I say… Maybe more coordination, maybe the betterment of the system. But please, no new institutions, not self illusions or delusions about direct democracy in the eu.” (B: 57:16)

Absorbing EU Structural Funds

[59:23]
Will Bartlett: Is Croatia able to access EU funds?

Milanović:

• “If you fail to draw sufficient percentage of the structural funds… then your whole enterprise ends in failure.” (B: 59:34)
• “We fare much better in that respect, and it's statistically measurable even at this point.” (B: 59:50)
• On political values: “Sometimes I’m very scary about referendum as a tool of democracy, because sometimes it turns into opposite. It’s very manipulative… But I will never allow… that minority rights are compromised…” (B: 64:54)

Highlights & Notable Quotes

• “Is it a goal or is it a means? Is it a journey or is it a destination? I view it as a journey, as a process.” (B: 01:49)
• “Croatian path was different. We've been through war lately… I'm the only member of the European Council… from the generation which had to go through the war.” (B: 04:18)
• “The growth and the model of growth that we have been taking for granted… simply doesn't work anymore, neither for us, nor on a much higher level, United Kingdom, nor for other countries.” (B: 08:57)
• “Reforms, hard work changes, labor, legislation… that we have to make our labor code more flexible in the interest of all, in the interest of job creation in the first place, that is beyond any doubt.” (B: 15:41)
• “If Europe really cannot absorb and digest Bosnia, then it's not worth a thing.” (B: 24:34)
• “We're going to get old before we get rich.” (B: 29:31)
• “People are much, much easier and much more comfortable coming over and searching for a job. I don't think it's hurt Britain, not at all. To the contrary.” (B: 35:29)
• “If you fail to draw sufficient percentage of the structural funds… then your whole enterprise ends in failure.” (B: 59:34)
• “But I will never allow that to happen, never to come to pass, that minority rights are compromised practically one year after we joined the EU.” (B: 65:09)

Timestamps for Key Segments

| Time | Segment | |------------|-------------------------------------------------------------| | 01:29–06:00| Opening reflections & Croatia’s unique path | | 06:00–08:20| Yugoslavia’s failure & EU parallels | | 08:20–12:20| Economic reforms, growth model crisis | | 12:20–15:50| Tourism and shipbuilding | | 16:21–19:00| Audience Q: EU a process vs. goal (Featherstone) | | 20:00–22:51| Audience Q: Treaty reform, free movement | | 22:56–28:24| Audience Q: Western Balkans, Bosnia’s EU perspective | | 28:24–32:47| Audience Q: Youth unemployment and emigration | | 33:08–36:44| Audience Q: UK migration debate | | 36:44–39:32| Audience Q: Investment obstacles | | 40:18–43:45| Audience Q: Regional economy & future | | 43:45–46:44| Audience Q: Social risk, unrest, values | | 46:45–49:59| Audience Q: Euro adoption, fiscal issues | | 50:03–53:33| Audience Q: VAT, tax fairness, property tax | | 53:33–56:02| Audience Q: Tourism seasonality | | 56:07–59:07| Audience Q: “Enough Europe”, integration vs. sovereignty | | 59:23–65:30| Audience Q: EU structural funds, minority rights |

Tone and Style

Milanović’s tone is direct, sardonic, at times self-deprecating, and unflinchingly honest. He combines humor (“Croatian lawyers, beware. Croatian engineers, that's much better.” [29:28]) with hard truths about Croatia’s readiness for the future. He frequently challenges his country and the EU to move beyond inertia, to address hard social and demographic realities, and to uphold liberal and minority values against rising conservatism.

Conclusion

Prime Minister Milanović presents Croatia as a nation at a crossroads: proud of its European identity and historical achievements, but also deeply aware of the economic, demographic, and political hurdles ahead. He positions EU membership as an ongoing process of reform and adaptation, not a static achievement, and he highlights the country’s responsibilities both domestically (youth, jobs, minority rights) and in supporting broader regional stability and integration. Throughout, he reinforces a message of cautious optimism, pragmatic leadership, and commitment to European values.