ELECTIONS: SANADER'S HDZ WINS BIG, BUT WILL HAVE

1. (SBU) The Croatian Democratic Union (HDZ) founded by
former President Franjo Tudjman was a big winner in Croatia's
November 23 parliamentary election, but will still have to
form a coalition in order to seat a government. According to
unofficial results, the HDZ won 65 of 76 seats needed for a
majority. But its likely coalition partners performed so
poorly that HDZ President Ivo Sanader's government may have a
parliamentary majority of only a handful of seats.



2. (U) Voter turnout was just over 68 percent, as expected.
OSCE and local NGO monitors concluded that the poll was
conducted in a professional and transparent manner with no
incidents which would affect the outcome. Results will be
made official within ten days, once the period for candidates
to appeal results has expired.



3. (SBU) The next step is for President Mesic to consult
with political leaders and then decide who gets the first
chance to form a government, based on that individual's
ability to demonstrate to Mesic that he will be able to
command a majority of seats in the new parliament. Sanader
expects to get the nod soon, but Mesic seems to be in no
hurry. The law sets no time limit for these consultations to
be completed, but Mesic is expected to name a PM-Designate by
the end of the week. This individual would then be required
to present a government to the new Parliament for a
confidence vote within 30 days. It is likely that the next
Croatian cabinet will be seated before Christmas. End
Summary.

HDZ Machine Campaign Delivers Results


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4. (C) Voters went to the polls on November 23 to elect a
successor to Croatia's first post-Tudjman parliament. The
"official" portion of the campaign was short, but very
intense, and the powerful HDZ campaign machine made the most
of the natural pessimism of Croatian voters, convincing them
that -- most empirical evidence to the contrary -- they were
not better off than when the Racan government came to office
in January 2000.

HDZ Exceeds Even Its Own Expectations ...


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5. (U) Sanader's HDZ won in eight of Croatia's ten
geographical electoral districts and won big in the
nationalist-leaning areas of Dalmatia and Eastern Slavonia
which still feel the effects of war. As expected, the HDZ
was weakest in central Zagreb and in Istria, Croatia's most
developed regions. According to unofficial results, the HDZ
won a total of 65 out of 151 seats in the new parliament.
The number of seats assigned to representatives of voters
outside of Croatia -- the "diaspora district" -- is
determined by voter turnout. The results of precincts in
Bosnia and Herzegovina are still being tabulated; the result
for the HDZ and the total number of seats in the new
parliament may be increased by one.

But Will Still Have Trouble Seating A Government


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6. (C) Despite winning almost twice as many seats as his
closest rival (Racan's SDP), Sanader will have to work hard
to form a coalition with even a narrow majority. His most
likely coalition partners, a grouping of the Croatian Social
Liberal Party (HSLS) and the Democratic Center (DC), were
dealt a humiliating defeat by the voters, electing only three
MP's. Neither party president will enter the Sabor, which
almost certainly means the end of their political careers.
Sanader can count on the support of the extreme right-wing
Croatian Party of Rights (HSP), which won eight seats
(doubling its total from the previous parliament), but he
would rather not be saddled with the HSP's ultra-nationalist
baggage.

HSS Is Down, But Not Out of the Horsetrading


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7. (C) The Croatian Peasants' Party (HSS) had expected to be
a major player in the next parliament, but instead lost
ground. Analysts suggest that voters interpreted Party
President Tomcic's coyness during the last days of the
campaign about whether his party would go right or left as
"these seats for sale." Rather than the 20 seats projected
by reliable polls just two weeks before the election, the HSS
secured only 10, down from 16 in the previous parliament.


Nevertheless, the HSS could still try to bargain with the HDZ
to enter government. The HDZ would have to choose which
partner, the HSP with its nationalist reputation or the HSS
with its economic goals smacking of central planning, would
be the lesser of two evils.

Election Surprise -- Pensioners Win Three Seats


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8. (C) As expected, Racan's SDP was the other big loser in
Sunday's poll, but his party -- together with coalition
partners -- will remain a significant force in the new
parliament. The Croatian People's Party (HNS), which had
only two seats in the previous Sabor, made important gains
and now has 11 seats. The one surprise was the Croatian
Party of Pensioners (HSU), which enters the parliament for
the first time with three seats. Croatia's pundits are still
scratching their heads about the success of the HSU, but
speculate that they benefited from the HSS' loss.

Thirteen Parties In Sabor Equals One Big Mess


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9. (C) When all the various coalition partners are counted
separately, there will be a total of thirteen political
parties represented in the next Croatian parliament. Add to
this cacophony an additional eight seats reserved for ethnic
minorities (which in the last parliament almost always voted
against the HDZ).

Slim Majority May Force the HDZ to "Play Nice"


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10. (C) If the HSS decides not to align itself with the HDZ,
Sanader will have a majority of only five seats in the new
parliament. This could be further eroded if the few seats
from the HSLS/DC grouping decide to declare themselves as
free agents (anything is possible). On one hand, this may
force Sanader to reach across the aisle to seek consensus
before setting any new policy course. But this slim majority
will also mean that he will find it difficult to get the
business of government done. Because the SDP and HNS share
the main policy goals which Sanader claimed the HDZ would
pursue after elections, one might hope for non-partisan
consensus on issues related to Croatia's integration into
Euro-Atlantic institutions. Unfortunately, as there is no
love lost between the right and left in Croatia, the new
opposition may look for opportunities to repay the HDZ's
dirty parliamentary tricks which so often embarrassed the SDP
during Racan's tenure.

OSCE and NGO's Praise Election Process


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11. (U) Long-term monitors from OSCE's Office of Democratic
Institutions and Human Rights (ODIHR) cited a number of areas
for improvement in Croatia's electoral legislation, but
concluded that the conduct of the poll was professional,
transparent and the result was the democratic expression of
the voters. As it did in 2000, the highly successful
Croatian election watchdog NGO "GONG" mounted a full scale
election monitoring effort with nearly 3000 participants.
They reported a number of minor incidents, but concluded that
the process was professional and in accordance with election
law. A parallel vote tabulation carried out by GONG
confirmed the general results presented by Croatia's State
Electoral Commission. No political party has so far
challenged any of the results in any of the polling stations
in Croatia or abroad.

Timelines: Mesic to Name PM-Designate


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12. (SBU) Now that the voting is over and reliable -- but
not official -- results are available, Croatia's constitution
calls for President Mesic to name a PM-designate, after
consultations with the various political parties. Mesic told
the press that he would not necessarily name the PM-designate
on November 24, but would seek evidence from the next
potential prime minister of agreements with other political
leaders which demonstrates that they would be able to win a
vote of confidence. Neither Croatia's constitution nor the
election law specify the amount of time the President has to
make his designation, but Mesic's political adviser told us
the President would act before the end of the week. Once a
PM-Designate is named, he will have thirty days to present a
cabinet to the parliament to pass a vote of confidence.

Government In Place by Year's End


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13. (SBU) The results of the election will become official


when the State Electoral Commission has received all of the
signed originals of the protocols certifying results from all
polling stations around the world and when all appeals of
these results have been considered by Croatia's
Constitutional Court. Election officials tell us this should
take about 10 days. The new parliament must convene within
20 days of "completion of the election" -- which is
interpreted as publication of the official results. Ideally,
the first act of the new parliament should be to vote its
confidence in the new government proposed by the
PM-designate. If Croatia's democratic process continues to
function as efficiently as it has for this election cycle, a
new Government could be in place before Croatia's public
institutions begin to shut down for the Christmas and New
Year holidays.
FRANK


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