ZAGREB (Reuters) - Croatia's wrangling on forming a new cabinet got another twist on Wednesday as the incumbent Social Democrats (SDP) accepted a possibility of a technocrat prime minister, a key condition put forward by the small reformist kingmaker party.
The "Most" (Croatian for "bridge") party said earlier in the week it would resume talks on forming a joint government with opposition conservative party HDZ after it had agreed to talk about a premier not affiliated to any party.
The parliamentary election held on Nov. 8 gave the
HDZ party 59 seats in the 151-seat parliament, three seats ahead of the incumbent SDP-led, centre-left coalition. "Most" won 19 seats, but was then reduced to 15 due to internal squabbles.
However, neither top party can form a cabinet without "Most" which said it wanted a reformist government comprising all three sides and a technocrat prime minister.
The SDP rejected that proposal last weekend, but now changed its mind after "Most" said it would continue talks with the HDZ, scheduled for Friday.
"We're ready to talk about a possibility for 'Most' leader (Bozo Petrov) to become the prime minister. If it wouldn't be possible, we think that the task to form a cabinet could also be given to a non-party person," the SDP leader and the outgoing Prime Minister Zoran Milanovic said in a letter to "Most".
Also, he tentatively accepted cooperation of all three sides in forming a cabinet, similarly to what earlier the HDZ and its allies did. Initially both sides were very reserved towards that idea.
"Most" welcomed the SDP's move in principle, but has yet to decide how to move forward in this new situation. Many analysts believe that a grand coalition is unlikely to work amid deep ideological differences between the two top parties.
The Croatian President Kolinda Grabar-Kitarovic, elected as an HDZ candidate, already held three unsuccessful rounds of talks with parliamentary parties on forming a new cabinet. Another round is scheduled for next Tuesday.
She will nominate as the prime minister-designate a person who gets support of at least 76 parliamentary deputies. If no one can win such support, she must call a new election, but there is no legal time limit for such a decision.
Most, founded three years ago and made up of municipal
politicians and independents, says its aim is to overhaul the public sector and judiciary, reduce taxation pressure on businesses and tame the country's rising public debt.
Croatia is under pressure from the European Commission to
pursue swift reforms to encourage investment, reduce unemployment and restrain public debt, which is running close to
90 percent of gross domestic product (GDP). The budget gap is at
between 4 percent and 5 percent of GDP.
A failure to do so could cause further downgrade by the key rating agencies and make the country unable to access the international financial markets in the coming years.
Croatia is rated BB by Fitch and S&P and Ba1 by Moody's with a negative outlook.
Reporting by Igor Ilic; Editing by David Gregorio