June 20 (SeeNews) - With a total of 137 votes 'for' and only 2 'against', Croatia's parliament voted on Monday to dissolve itself on July 15, paving the way for elections to be held at the beginning of September.
According to Croatia's constitution, elections must be held within a minimum 30 days and a maximum 60 days from the parliament's dissolution, however representatives of parliamentary parties have mostly agreed that a snap vote should be scheduled for September. The final decision will be brought by Croatia's president Kolinda Grabar Kitarovic.
The vote, aired live by broadcaster HRT, was scheduled at the request of a majority of MPs and Grabar Kitarovic, who said late last week that no party had convinced her it has the majority to form a new government and urged the parliament speaker to consider the dissolution of parliament as soon as possible.
"A clear majority of MPs have taken the stance that early parliamentary elections should be called. The constitutional deadline of 30 days for consultations is impossible to shorten, and respecting the will of a majority of MPs and a majority of Croatia's population, I appeal to the speaker of the parliament to hold a debate and make a decision on the parliament's dissolution as soon as possible," Grabar Kitarovic said on Friday.
Early parliamentary elections are considered market negative by Raiffeisen Research, as this implies a delay in the reform agenda and very unclear prospects for the new cabinet, given the fragmentation in Croatian politics.
"In this regard we expect temporary stabilization to disappear as more investors could be looking to sell Croatia Eurobonds despite their juicy spreads as the outlook for the market deteriorates and, in our opinion, one notch downgrade looks all more likely on the horizon of next 6 months," Raiffeisen Research said in its daily note on Monday. "We keep Croatia’s Eurobond market under revision for possible downgrade from hold to sell."
Croatia's prime minister Tihomir Oreskovic lost a no-confidence vote in parliament on Thursday after 125 out of 142 attending MPs voted against him, spelling the end to the country's 5-month old government.
Croatia's political crisis escalated last month when the ministers of the minority partner in the ruling coalition, Most, voted in support of a motion launched by opposition SDP for a no-confidence vote against the leader of the majority partner in the ruling coalition, HDZ, Tomislav Karamarko over alleged corporate interests.
Earlier last week Karamarko resigned as first deputy prime minister after a parliamentary committee found him as being in conflict of interests in relation to his wife's business ties with a consultant working for Hungarian energy group MOL.
In parliament on Monday, the MPs re-activated Karamarko as a member of parliament, following approval by the Credentials and Privileges Commission last week on the basis of an act under which MPs have the right to re-activate their previously deactivated term as a member of parliament when their term as government official ends.