Transcript
A (0:00)
Your Excellencies, ladies and gentlemen, let me welcome you here to the London School of Economics. My name is James Ker Lindsay. I'm a senior research fellow in lisi, which is our research unit on Southeast Europe. It gives me great pleasure to introduce our speaker this evening, Prime Minister Zoran Milanovic. Prime Minister Milanovic has been Premier of Croatia since 2011 and President of the Social Democratic Party since 2007. During his political career, he's held a number of senior positions. He served as Chairman of the Social Democratic Party parliamentary group in the Croatian Parliament and was a member of the Committee for the Constitution, Rules and Procedure and Political System. He's also had a very strong involvement with the development of Croatia's foreign policy over the past 15 years, having previously served as Assistant Foreign Minister for Political and Multilateral Affairs, National Coordinator for NATO at the Croatian Ministry of Foreign affairs, and as Chairman of the National Committee for Monitoring the negotiations between Croatia and the European Union. He graduated from Zagreb law School in 1986 and completed his Master's degree in European Union Law at the Flemish University in Brussels. The subject of his talk this evening is Croatia's EU membership expectations and realities. Prime Minister.
B (1:29)
Ladies and gentlemen, dear colleagues, it is extreme privilege for me to address the audience in this institution over which I came across for the first time many years ago when I read some biography of jfk, and then I read that after graduating from Harvard, he enrolled on the London School of Economics. And I wondered what kind of guy that is. I mean, after graduating from the university, he went back to the school. I had no slightest comprehension as to what this august institution is. So again, it's my privilege, and that's what I read in the book five minutes ago, to be here to briefly address you and then to have interchange of ideas. So you will be, understand, free, to ask and to challenge my views and positions. And there will be few, not many, just the focus. So after long years of negotiations, procrastinations and perils and wars, we finally made it and we became 28th member of the EU. Now, fundamentally, 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, because process for me is more or less everything. And the goal, you never know when you get there. So in the process of the EU talks, we've been, should I say harshly scrutinized because it took so long, because it was so intense, so deep, so different from the. From the approach and the treatment the others were accorded. Did it create Any rancor or anger on our part? Not exactly. It didn't. Did we learn a lot? We did. Did we really reform? We didn't. Actually. It starts only now. All that we've been through lately, or 10 years ago, over the last 10 years, without undermining the position or the merits of the others, contributed to the achievement of this goal was simply, well, transposition of huge mass of documents and legislation into our legal system. Now it has to work. It doesn't work impeccably. By default, as we see it these days in Europe, we have entered into, well, not the best of times. This is very. These are very interesting times, as the old Mandarin curse goes. And we are having interesting times in Europe and we are entering in the status of the upper middle income country. Well, that's the status that we have enjoyed and we've been into like in a kind of straitjacket for the last 45 years. That's more or less the economic and social level Croatia attained as a part of Yugoslavia at the beginning of the 70s, after two decades of consecutive steady growth. And the figures, which sometime resemble Chinese figures, we relented, we stopped. And then the political crisis started, which lasted for years, years of procrastination, of delays, reforms we needed. And then finally the war broke out and we are actually catching up with something that a whole generation feels she was entitled to. But it never came to pass. So Croatian path was different. We've been through war lately. Everybody experienced that war in his or her special way. And actually I'm the only member of the European Council at this point in this composition, that comes from the generation which had to go through the war. There's no choice. So it makes us different, it doesn't make us better. In some aspects, it makes us stronger, but also sometimes worse. People, each of us individually. Now we've been in Yugoslavia for. This is the point I want to make next. We've been in Yugoslavia for 70 years. The country was created in 1918, 1919, after the Versailles Conference, and it lasted for a little bit more than 70 years. If there was a single goal to attain in the federal first kingdom and in federal union, that goal should be the economic and social harmonization, single market with uninterrupted flow of the goods and ideas and services. But actually it never came to pass because 70 years down the road, at the eve of the collapse of the country, the regional imbalances were exactly the same as they were in 1918. Slovenia versus Kosovo, Kosovo versus Croatia. In economic terms, relatively. In relative terms, nothing changed. So the whole project was a failure. Now, to put it into broader context, one being a member of the eu, actually we are witnessing pretty much the same, but on a much larger scale after this historic deleverage. In the aftermath of the financial crisis, all the European countries stand more or less where they stood 40 years ago in relative terms to each other. Greece as rich or as poor as it was 40 years ago in relation to Germany, Denmark in relation to Spain, as if nothing has changed, at a standstill. So it's also a lesson that I take from history. Actually the only country that managed to make a quantum leap in economic standing, but which is more of an exception, is Ireland. Ireland only made quantum leap. Everybody else stands where it stood before. So this is not that we should curb any enthusiasm to the contrary, but also take some things as real that the growth and the model of growth that we have been taking, we've been taking for granted over the last couple of decades simply doesn't work anymore, neither for us, nor on a much higher level, United Kingdom, nor for other countries. We have to convince ourselves that we unfortunately have to work more, have to be paid, should I dare to say less, to retain the current standard of living, not to go down, not to plunge. That's what Germany did some 11 years ago. And the fruits of that audacious move by social democratic government of Schroeder is still being enjoyed by his political successors of whichever political color. That's something that we still have to do. We haven't done it yet. And in trying to take that course, I'm being confronted with a, well, stiff resistance in my country, because it's natural. It's natural people feel that they are entitled to things. But the bad thing is that we cannot pay for that. We don't have that money. We are, as a country, in a way, well in doubt that we are small, we are not overpopulated. Sometimes that's also a blessing, but sometimes a curse. I will refer to the latter example later. We have a good geographical position. We have relatively well educated and talented workforce. Of course, everybody thinks of himself exactly the same way. Everybody's special. In reality, it's not true, but we think of ourselves as we are special, at least at the average of Europe, not the world. And this is potential for a great economic yield. Country has good links, good connections with Europe, port facilities, very strong, robust and growing tourist industry. And when we're talking about a country of four and a half million, it can speak volumes if you put things in place in the right way. So work hard, but not work, just anything. We are only four and a half million. That's what I said. So this is the setback. We have the most elaborate network of highways in this part of Europe, which we paid for dearly through the loans, not through European funds. We didn't tap on that resource because we were not a EU member. And now we eventually realized that we are like 8 million people short in order to pay back the loan because we don't pay enough tolls. It's expensive for us, it was one of those moves that you make once in the history of generation. For us, it's a great thing. For you it can sound minuscule, marginal issue that we dared to invest to spur the growth of the one important branch of economy. That's tourism. Now, the tourism is not necessarily the branch of the economy that employs the most highly talented and educated people. People who work here or people who study here will not necessarily tomorrow be hotel managers, which is the profession that I respect hugely. But this is not something that adds the top value, especially in the tourist resorts. But that's certainly one of the. And some of the people here in the audience actually have been active in Croatian tourism as entrepreneurs, pioneers, risk takers. They profited, they lost. I see them in the audience and they will probably come back or they will not. But that's one of the areas where small country with good tradition can really make a lot. We have shipbuilding industry, which has been there for years and years. Of course the market has changed substantially. But did you know that in 1985, in terms of brutal tonnage, Yugoslavia, which means Croatia 95%, was the third in the world after Japan and South Korea. China was not around yet. So the third builder of ships in the world in terms of birth Atonic, was Yugoslavia, of course, with a lot of losses accumulated in state subsidized industry. But there is a tradition, there is knowledge, there is a potential for diversification and entry into the new areas. Because it's a knowledge based industrial activity. Well, of course not. If you build tankers, that's what is being done these days elsewhere. But if you resort to other means and possibilities, it can be very profitable. And that's also something that we have fundamentally restructured in the course of EU talks, because we were compelled, we had to do that. If it wasn't for the eu, that's one of those bright examples. It wouldn't have ever came to pass, never. Because the subsidized would go on, subsidies would go on forever, for decades. It was a system that was simply self generating. Everybody felt happy. But at the end of the day, taxpayer had to carry the bill. The bill was borne by the taxpayer. It also changed in this course. So it's private now. It started to make profits, but the future is uncertain, as in every industry. What else to say? This is in general lines the picture of my country, which is not a big mystery for you, which is European country, which is small country, which is country of good potential, which is now around the same table going to the same ordeal of the European Council meetings that last long into the night for two days, having very complicated decision making process in which we now participate. My government is social democratic government. I'm a social democrat of I believe, European kind of liberal type. Even though when you say liberal in Croatia you got a hard, nasty look, you know, it doesn't come with sympathy to be liberal. Well, it's like you're leaving people to their own devices. You're not compassionate enough. I think that we live, act and work to the contrary, that we are both compassionate but also aware of the challenges that the current state of affairs in the world and the world and European economy puts before us. It's competitive, it's unpredictable, but we have those core, I should say, anchors that we can stick to. So I'm an optimist about Croatia's future in terms of breaking free from that straight jacket that I mentioned at the beginning that we've been into for the last 45 years. Actually the economy and the society have been stationary for the last four and a half decades. As a kid, I remember at least as a children, as a child from the middle, higher middle income family, from the capital, enjoying relatively good living standard. And I was not alone. There were many of those, of course, in a system that was not democratic, that was one party controlled, but that's the level that we have once achieved and still stationary. And in the times of crisis, this can give way to, or this can cause frustrations among the people. For the time being, Croatians are not taking to the streets as some others did. But it's always about expectations. Never about real troubles, real problems, always about expectations. So reforms, hard work changes, labor, legislation, which has to be altered slightly, but not fundamentally, because I don't believe that in scrutinizing workers to the point of break, you can achieve a lot, but 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. That's something I believe in. So since I'VE started repeating myself. It's a good sign that I should pull the brake here and allow you to ask me to make comments or to challenge my views. Thank you.