June 17 (SeeNews) - Croatia's ruling coalition has turned out to be as fragile as expected, however investors are definitely surprised by intrigues and rising irrationality given the fairly constructive dialogue prime minister Tihomir Oreskovic had with EU authorities on stabilising and reforming the economy, RBI said on Friday.
Croatia's prime minister Tihomir Oreskovic lost a no-confidence vote in parliament on Thursday after 125 out of all 137 MPs voted against him, spelling the end to the country's five-month old government. The largest ruling party HDZ now has 30 days to gather a new majority and gain parliamentary approval for a new prime minister and cabinet. If it fails do so, new elections will be called.
In its weekly CEE outlook, Raiffeisen Bank said that it expects early elections in autumn on the assumption that HDZ will not succeed in the government reshuffle, however it added that even a snap vote will not bring political stability.
"At least for now even election would not bring political stability as we do not expect to see a clear winter," RBI said.
Therefore, the risk of delaying so needed structural measures is on the rise, the lender noted, while not excluding further credit rating downgrades.
Last week, a group of 42 MPs of Croatia's HDZ-led Patriotic Coalition filed in parliament a document listing six grounds for the dismissal of Oreskovic. This is the first time in Croatian history that a PM has been overturned with a no-confidence vote.
Croatia's political crisis escalated last month when the MOST ministers voted in support of a motion launched by SDP for a no-confidence vote against Karamarko over alleged corporate interests. Following the vote, Petrov called for Karamarko's resignation. The increasing bad blood between the deputy prime ministers pushed the prime minister to call for their resignation.