In his address President Mesic spoke critically of the agreement which the Ivo Sanader cabinet drafted with the Republic of Austria to regulate the restitution of property belonging to ethnic Germans who fled Yugoslavia after 1945, in the wake of the Second World War.
Mesic said he felt it was his duty to inform citizens that he had not been consulted in any way in the process of drawing up the agreement, despite the fact that the Croatian constitution stipulated that one of his duties was to participate in designing foreign policy.
"Only after I indirectly learnt of that, I intervened, but - and this was a few weeks ago - I was told that the entire matter was at the stage of preparation, only to be told now that the agreement has been concluded, sent to Austria and to the Parliament," Mesic said.
Mesic said he wanted to state unequivocally that he disagreed with the agreement and that he perceived it "as a dangerous precedent" which would not affect only Croatia.
He then went on to cite five facts which he said were very well known to the Croatian government and which he believed the government had intentionally ignored.
"First, during the Second World War, Austria was part of Hitler's Third Reich, which means that it was not a subject of international law. Possible outstanding issues in relations with Austria were regulated with a state treaty which gave Austria independence fifty years ago. Yugoslavia was one of the co-signatories to that treaty.
"Second, the value of the property owned by members of the German ethnic group, which was confiscated or which they abandoned when they left Yugoslavia, was included in the total value of the war damage caused by the German occupying forces, which was enormous.
"A form of compensation was subsequently regulated by the Tito-Brandt agreement. Croatia, as one of the successors to the former Yugoslavia, took over the state treaty as well as the latter agreement, which solves this issue as well.
"Third, although I cannot claim that the treatment of the German ethnic minority was always fair, I must say that it was in line with what was concluded at the conference of the victorious allied forces in Potsdam.
"Fourth, forcible evictions and property confiscation was not applied to those members of the German ethnic group in Croatia who had taken part in the anti-Fascist struggle and liberation war. This policy was not applied indiscriminately and against people of a specific ethnic descent, but against people who were declared collaborators. Croatia, which has the anti-Fascist struggle built into its foundations, has no reason to renounce its basic position on Nazism, fascism or its collaborators.
"Fifth, the former Yugoslavia was only one of the European countries which acted in this or similar ways.
If Croatia now ignores all those facts and if with regard to its relations with Austria it abandons international agreements which have definitely solved some issues from its relations with Germany, Austria and Italy, it will set a precedent...
"The only remaining obligation in this context is the payment of the last installment to Italy in compliance with the Osimo Accords. Once we do that, we will remove from the agenda the issue of compensation to the optants for good," Mesic said referring to ethnic Italian refugees who left Croatia after WW II.
He warned that the functioning of the Croatian state could be brought into question if the authorities started paying compensating to everybody under the pretext of redressing injustices inflicted by the Communist regime.
This, Mesic says, was the reason for his intervention and address to the nation.
"I am in favour of redressing injustice wherever it is possible... I am in favour of admitting one's own mistakes and wrong moves. But I am also in favour of honouring agreements which have been reached so far".
The Croatian head of state says that he is also aware of the important role which Austria plays in bilateral economic relations and extends gratitude to Vienna for the help it offered Croatia during the Homeland Defence War, as well as for its support to Croatia's efforts to join the united Europe.
Mesic adds, however, that he is also aware of the concern which the Ivo Sanader cabinet's move has provoked in several European countries.