The Croatian parliament approved on Wednesday a reshuffle of Prime Minister Jadranka Kosor's centre-right cabinet focused on economic recovery and the conclusion of EU entry talks before a general election due in late 2011. "The new people will help achieve our aims - implement our economic recovery programme, reduce unemployment, attract investment, conclude European Union accession talks and continue the fight against corruption," Kosor told the deputies.
She replaced the finance, defence, construction and culture ministers in the cabinet she inherited from Ivo Sanader, who suddenly quit as premier in July 2009 and is now being investigated for corruption in Austria and Croatia. The finance ministry will be run by economist Martina Dalic, who worked there before going on to head the small private Partner Bank.
Analysts said Dalic's main task will be to keep public spending under control and win back foreign investors' trust, after Standard and Poor's last week cut Croatia's credit rating to BBB- from BBB, bringing it just a notch above junk status. It cited slow fiscal consolidation and structural reforms. The new defence minister will be Davor Bozinovic, a former diplomat and military expert.
Kosor also appointed a local businessman, Domagoj Milosevic, as a deputy prime minister in charge of improving the stifled business climate and attracting investment. "We want to become the EU's 28th member as an economically strengthened country. This will help both EU member states when they take the final decision about us and our citizens when they take part in the referendum on EU membership." Opposition leaders and many analysts say the reshuffle was meant to improve the ruling HDZ party's image but was unlikely to produce concrete benefits in less than a year before the election, due in November or December.