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Croatia became a member of the Council of Europe in 1996. 1996 and 1997 were a period of post-war recovery and improving economic conditions. However, in 1998 and 1999 Croatia experienced an economic depression, causing the unemployment of thousands of citizens.

The remaining part of former “Krajina”, areas adjacent to FR Yugoslavia, negotiated a peaceful reintegration process with the Croatian Government. The so-called Erdut Agreement made the area a temporary protectorate of the UN Transitional Administration for Eastern Slavonia, Baranja and Western Sirmium. The area was formally re-integrated into Croatia by 1998.

Franjo Tuđman’s government started to lose popularity as it was criticized (among other things) for its involvement in suspicious privatization deals of the early 1990s as well as a partial international isolation. The country experienced a mild recession in 1998 and 1999.

Tuđman died in 1999 and in the early 2000 parliamentary elections, the nationalist Croatian Democratic Union (HDZ) government was replaced by a center-left coalition under the Social Democratic Party of Croatia, with Ivica Račan as prime minister. At the same time, presidential elections were held which were won by a moderate, Stjepan Mesić. The new Račan government amended the Constitution, changing the political system from a presidential system to a parliamentary system, transferring most executive presidential powers from the president onto the institutions of the Parliament and the Prime Minister.

The new government also started several large building projects, including state-sponsored housing, more rebuilding efforts to enable refugee return, and the building of the A1 highway. The country achieved notable economic growth during these years, while the unemployment rate would continue to rise until 2001 when it finally started falling. Croatia became a World Trade Organization (WTO) member in 2000 and started the Accession of Croatia to the European Union in 2003.

In late 2003, new parliamentary elections were held and a reformed HDZ party won under leadership of Ivo Sanader, who became prime minister. European accession was delayed by controversies over the extradition of army generals to the ICTY, including the runaway Ante Gotovina. Sanader was reelected in the closely contested 2007 parliamentary election. Other complications continued to stall the EU negotiating process, most notably Slovenia’s blockade of Croatia’s EU accession in 2008–2009.

In June 2009, Sanader abruptly resigned his post, and named Jadranka Kosor in his place. Kosor introduced austerity measures to counter the economic crisis and launched an anti-corruption campaign aimed at public officials. In late 2009, Kosor signed an agreement with Borut Pahor, the premier of Slovenia, that allowed the EU accession to proceed.

In the Croatian presidential election, 2009-2010, Ivo Josipović, the candidate of the SDP won a landslide victory. Sanader tried to come back into HDZ in 2010, but was then ejected, and USKOK soon had him arrested on several corruption charges. As of 2012, his trial is ongoing.

In 2011, the accession agreement was concluded, giving Croatia the all-clear to join, with a projected accession date of 1 July 2013.[51]

The Croatian parliamentary election, 2011 was held on 4 December 2011, and the Kukuriku coalition won.

Croatia became a member of the Council of Europe in 1996. 1996 and 1997 were a period of post-war recovery and improving economic conditions. However, in 1998 and 1999 Croatia experienced an economic depression, causing the unemployment of thousands of citizens.

The remaining part of former “Krajina”, areas adjacent to FR Yugoslavia, negotiated a peaceful reintegration process with the Croatian Government. The so-called Erdut Agreement made the area a temporary protectorate of the UN Transitional Administration for Eastern Slavonia, Baranja and Western Sirmium. The area was formally re-integrated into Croatia by 1998.

Franjo Tuđman’s government started to lose popularity as it was criticized (among other things) for its involvement in suspicious privatization deals of the early 1990s as well as a partial international isolation. The country experienced a mild recession in 1998 and 1999.

Tuđman died in 1999 and in the early 2000 parliamentary elections, the nationalist Croatian Democratic Union (HDZ) government was replaced by a center-left coalition under the Social Democratic Party of Croatia, with Ivica Račan as prime minister. At the same time, presidential elections were held which were won by a moderate, Stjepan Mesić. The new Račan government amended the Constitution, changing the political system from a presidential system to a parliamentary system, transferring most executive presidential powers from the president onto the institutions of the Parliament and the Prime Minister.

The new government also started several large building projects, including state-sponsored housing, more rebuilding efforts to enable refugee return, and the building of the A1 highway. The country achieved notable economic growth during these years, while the unemployment rate would continue to rise until 2001 when it finally started falling. Croatia became a World Trade Organization (WTO) member in 2000 and started the Accession of Croatia to the European Union in 2003.

In late 2003, new parliamentary elections were held and a reformed HDZ party won under leadership of Ivo Sanader, who became prime minister. European accession was delayed by controversies over the extradition of army generals to the ICTY, including the runaway Ante Gotovina. Sanader was reelected in the closely contested 2007 parliamentary election. Other complications continued to stall the EU negotiating process, most notably Slovenia’s blockade of Croatia’s EU accession in 2008–2009.

In June 2009, Sanader abruptly resigned his post, and named Jadranka Kosor in his place. Kosor introduced austerity measures to counter the economic crisis and launched an anti-corruption campaign aimed at public officials. In late 2009, Kosor signed an agreement with Borut Pahor, the premier of Slovenia, that allowed the EU accession to proceed.

In the Croatian presidential election, 2009-2010, Ivo Josipović, the candidate of the SDP won a landslide victory. Sanader tried to come back into HDZ in 2010, but was then ejected, and USKOK soon had him arrested on several corruption charges. As of 2012, his trial is ongoing.

In 2011, the accession agreement was concluded, giving Croatia the all-clear to join, with a projected accession date of 1 July 2013.

The Croatian parliamentary election, 2011 was held on 4 December 2011, and the Kukuriku coalition won. Zoran Milanović became the prime minister of the coalition government.

In January 2012, the new government organized a referendum for EU membership that passed with 66.27%. After the referendum, the Sabor ratified the accession treaty. It was determined that Croatia will join EU on 1 July 2013.

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