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CROATIA SLIPS ON STABILITY INDEX

ZAGREB, March 19 (Hina) - Croatia's stability decreased as turbulence within the ruling coalition again raised the possibility of early elections, according to an analysis by the US consulting company Euroasia Group and Lehman Brothers investment bank. The assessment was cited by the Croatian Employers' Association. It said the instability began when the president of the Social Liberal Party (HSLS), Drazen Budisa, rejoined the government. Lehman's LEGSI stability index for Croatia fell to 59 points in March from 60 in February and 62 in January. The index measures political stability in countries in transition and their resistance to internal crises. The patience of Prime Minister Ivica Racan is lessening, and the possibility of new elections is the highest since last summer's coalition crisis over cooperation with the Hague war crimes tribunal, reads the analysis. The analysts say that the fact that right-wing
ZAGREB, March 19 (Hina) - Croatia's stability decreased as turbulence within the ruling coalition again raised the possibility of early elections, according to an analysis by the US consulting company Euroasia Group and Lehman Brothers investment bank. The assessment was cited by the Croatian Employers' Association. It said the instability began when the president of the Social Liberal Party (HSLS), Drazen Budisa, rejoined the government. Lehman's LEGSI stability index for Croatia fell to 59 points in March from 60 in February and 62 in January. The index measures political stability in countries in transition and their resistance to internal crises. The patience of Prime Minister Ivica Racan is lessening, and the possibility of new elections is the highest since last summer's coalition crisis over cooperation with the Hague war crimes tribunal, reads the analysis. The analysts say that the fact that right-wing nationalist Ivic Pasalic could be elected president of the Croatian Democratic Union is a risk factor for the coming period. According to their assessment, Pasalic will halt the HDZ's transformation into a modern right-centre party. Despite the turbulent relations within the ruling coalition, the Croatian government instigated a series of laws to stimulate investments and begin the privatisation of oil and gas monopolies (INA oil company, Croatian Power Supply). The analysts positively assess these processes. They also take a positive view of relations between the Croatian government and the International Monetary Fund. This, however, will not have a particularly favourable short-term effect on the public's mood, considering the fact that its dissatisfaction was caused by a further increase in the unemployment rate. According to the anylysts, the security component of stability increased slightly as regional normalisation picked up with the expansion of Croatia's largest food company into Yugoslavia. As diplomatic relations improve, Croatia has expressed interest in becoming involved in more joint ventures and privatisation in Yugoslavia, said the March report. In relation to other countries, Croatia is in fifth place in March, according to the LEGSI index. Hungary is first and Poland, Brazil and Bulgaria follow. Croatia is followed by Thailand, Russia, Turkey, Ukraine, Columbia, Indonesia, Venezuela, Argentina and Azerbaijan. (hina) it.

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