The agency's latest report, which the Zagreb-based BonLine company released on Friday, notes that President Stjepan Mesic was re-elected in a landslide victory at January's polls. The report says that although both candidates in the runoff supported Croatia's admission to the European Union and NATO, Mesic was much more outspoken about the need to cooperate with the war crimes tribunal in The Hague. The report adds that the election results showed that voters were in favour of EU entry.
The EU is ready to start entry talks with Croatia on March 17 although EU leaders told Prime Minister Ivo Sanader in mid-January the talks might be postponed if Gotovina was not handed over to the UN court, the report says.
It adds that other politically sensitive issues in Croatia's EU integration are the return of 200,000 Serbs who fled the country at the end of the war in 1995, judicial reform and closure of border issues with Slovenia.
The report says that although Croatia wishes to join the Union in 2007, the year 2009 is more realistic.
The report notes that Croatia has been implementing changes in the tax system as of this year, including the abolishment of the dividend tax, which is expected to increase foreign investment, and the re-establishment of the Financial Police, which is expected to improve tax collection.
Croatia is ranked 11th, with a grade of DB4d, among the 25 countries of the region covered by the report. It is preceded by Bulgaria and Romania. Slovenia tops the list with the grade DB2c as a small investment risk country, while the bottom of the list is occupied by Albania, Belarus, Bosnia-Herzegovina, Tajikistan, Turkmenistan and Uzbekistan as high investment risk countries.