Croatia may join the European Union by 2011, later than the government's plan to become part of the 27-member bloc by the end of this decade, Raiffeisen Zentralbank Oesterreich AG said.
Should the former Yugoslav republic continue adapting to EU standards at a moderate speed and joins in four years, the economy may expand faster than 4.5% between 2008 and 2012, the Austrian bank, Raiffeisen Zentralbank Oesterreich AG said in a report today.
The Croatian economy grew 4.3% in 2005 and last year's growth is estimated at 4.6% by the bank. Croatia started EU entry talks in October 2005. It fell behind other former communist countries, many of which joined the bloc in 2004, due to ethnic conflicts that followed the breakup of the Yugoslav federation in 1991.
It needs to improve its judiciary, public administration and intensify the fight against corruption before it becomes ready for full membership, the report said. A slowdown in implementing these structural changes would postpone the Balkan state's entry to 2013 or 2014 and GDP growth may fall to less than 4.5%, it said.
If the reforms speed up and the country joins the EU in 2011, growth may accelerate to slightly more than 5%, the bank said. Croatia, with the most developed economy in southeastern Europe, according to the report, is due to hold elections in 2007. Raiffeisen does not expect the process to significantly influence the entry negotiations with the EU. (Bloomberg)