LEAD: Croatian opposition wins elections to face daunting tasks

Dec 4, 2011, 21:34 GMT

Zagreb/Belgrade - Voters humiliated the once all-powerful Croatian Democratic Union (HDZ) in elections Sunday, punishing it for corruption scandals and the devastated economy with less than half of the votes they awarded the opposition.

According to early figures, HDZ took only 48 out of the 151 seats in the next legislature, while the Kukuriku (Cock-a-doodle) coalition led by their archrival Social Democrats (SPD) tallied 78, enough to form a government alone.

Though no official results were released, the projections were clear.

Opinion polls had predicted the win, but not the magnitude of the upset - which may reflect rising cynicism about the country's political and economic affairs.

The former HDZ leader, who was also premier from 2003 to 2009, is on trial on charges that he and his cronies stole tens of millions of dollars.

Croatia is on the brink of a financial crisis, after a bloated, corrupt administration - run by HDZ for all but four years since independence - and economy spent for years beyond its means.

The SDP leader and next premier-apparent, Zoran Milanovic, now faces the daunting task of reforming the economy and the administration, but without access to cheap, if any, credit, as the rising debt-to-GDP ration has slashed the country's credit rating.

The reforms are certain to include massive lay-offs, not only from the administration, but also from the moribund shipyards. The sackings there could trigger thousands of job cuts in related private businesses.

While Milanovic will likely lead Croatia to European Union membership in July 2013, it will be his predecessor, Jadranka Kosor, who will sign the accession treaty in Brussels on December 9.

After that, Kosor - who forced Sanader out in 2009 and unleashed a crackdown on corruption in line with EU demands - will have time to shore up her leadership of HDZ and criticise the new government's measures in preparation for the next elections.

The former Yugoslav republic of Croatia declared independence in 1991 under the leadership of the HDZ founder and two-time president, Franjo Tudjman.

The country first fought the Yugoslav army, then Belgrade-backed Serb insurgents, before finally claiming sovereignty over all of its territory in 1995.

The SDP, with its foundations in the now-defunct Communist Alliance of Croatia, has ruled only once in the time since, from 2000 to 2004.