Both Croatia and the European institutions are coming under fire after fresh allegations that Zagreb has been mistreating migrants. Over the past month, multiple groups of migrants have reported abuse by the heavily militarised Croatian police. This ill treatment ranges from acts which appear designed to humiliate the migrants—spray painting their heads with crosses and smearing packets of ketchup and mayonnaise on their faces—to far more disturbing allegations about bands of balaclava-clad Croatian authorities beating asylum seekers so severely with metal sticks and pistol grips that they broke the migrants’ limbs and collapsed their lungs.
It’s far from the first time that Croatia has been accused of heavy-handed policing along its border—but with recently-leaked emails suggesting that officials at the European Commission may have helped hush up Zagreb’s failure to oversee its border control, this round of troubling reports has particular staying power. Indeed, it’s cast a renewed spotlight on what’s a broader pattern: Brussels has repeatedly failed to mete out consequences when Zagreb has fallen short of the expectations applying to all of the Union’s member states. Instead, it’s played an unsustainable balancing game—parcelling out moderate criticism of Croatia’s approach to border control and populist financial measures, while suggesting that the EU’s newest member state is ready for the Schengen area and the eurozone waiting room.
Who’s overseeing Croatian border officials?
The European Commission has responded to the latest round of troubling assertions by promising to send an independent monitoring mission to the Croatian border, but this hasn’t been enough to staunch criticism that Brussels is wilfully turning a blind eye to the abuses. For one thing, the monitoring mission is slated to take place at some unspecified time in the future “as soon as the pandemic eases up”—an excuse which carries little water given that Croatia currently only has 87 active cases of the novel coronavirus
Leaked emails between European Commission officials, reported on in The Guardian, have cast a further pall over the Commission’s pledges to ensure that Croatian border police are complying with the rule of law and with the bloc’s fundamental rights. Fearing a “scandal”, the officials in Brussels apparently decided to conceal—including from MEPs—the fact that Croatia had failed to sufficiently supervise the behaviour of its border officers as it was required to under a 2018 agreement which saw Zagreb receiving €6.8 million in EU funds. What’s more, Commission officials discussed intervening themselves to put the “final touches” on Croatia’s report about its border supervision, ostensibly to whitewash Zagreb’s poor performance.
The EU’s executive branch has roundly denied allegations that it helped Croatia cover up its lack of commitment to border monitoring. But it’s hard to fathom how, while harbouring such severe concerns about Zagreb’s performance humanely policing its border, the European Commission and the European Parliament alike are recommending that Croatia join the Schengen zone. As NGOs like Human Rights Watch have repeatedly underlined, admitting Croatia to the free travel area before it cleans up its act on the border “sends the message that serious human rights abuses are no obstacle to Schengen accession”.
Flaws in the financial sector overlooked
In a similar vein, allowing Croatia to move forward in the process for joining the euro by joining the Exchange Rate Mechanism (ERM-II) this year while— in the European Central Bank’s own words—the quality of its institutions and governance remains weak gives Zagreb little impetus to become a better steward of its financial sector.
If Croatia has rigorously kept the kuna within a narrow band against the euro, it’s fallen well short of the mark on other elements of managing its financial sector. Specifically, Croatia’s banks and its standing as a destination for foreign investment are both suffering from a populist decision to convert loans originally denominated in Swiss francs into euros.
It’s easy to see why Zagreb carried out the controversial conversion back in 2015. Thousands of Croatians had taken out Swiss franc loans in the early 2000s to take advantage of low interest rates—after the Swiss central bank stopped pegging its currency to the euro, however, the value of these loans suddenly increased. For Croatia’s ruling Social Democrats, who were on the back foot ahead of the November 2015 elections which took them out of government, forcibly converting these loans into euros was a way to curry favour with borrowers.
All talk, no action
It’s harder to understand why the European institutions failed to take a tougher line on the loans conversion. At the time, the European Commission asked Zagreb to rethink the law, highlighting the €1 billion of losses it imposed on local lenders— the vast majority of whom are owned by parent companies from other European Union member states—as well as the troubling signal it sent to foreign investors in Croatia. The European Central Bank’s public opinion on the forced conversion questioned whether elements of it, in particular the fact that it was imposed with retroactive effect, was in line with European directives. MEPs blasted the conversion as “an effort by European populists to violate the legal order of the EU for their short-term gain in the elections”.
Brussels failed, however, to take concrete action that might have convinced officials in Zagreb to walk back the problematic conversion. As a result, Croatian courts are now considering whether borrowers who voluntarily converted their Swiss franc mortgages into euros might receive additional compensation—something that could impose another €2.6 billion hit on Croatian banks right as they are trying to shore up the country’s economy amidst the unprecedented economic downturn sweeping across Europe.
Giving Croatia the green light to join the eurozone waiting room even as its populist decisions are fragilizing its financial sector risks sending the wrong message, just as fulfilling Zagreb’s longstanding dream to join the Schengen area while it’s apparently sending heavily-armed patrols to beat up asylum seekers does.
