Croatia will hold a general election on December 4, President Ivo Josipovic's cabinet said on Monday, and centre-left opposition seems poised to beat the ruling conservative HDZ party, weighed down by corruption scandals and a declining economy.
The next European Union member's parliament was dissolved and Josipovic called the election on Friday but the announcement became official on Monday, when electoral authorities set constitutional deadlines for naming candidates.
The president has called the election, an official of the presidential cabinet told Reuters. All constitutional deadlines for electoral lists and campaigning are effective as of today.
The HDZ has been in power for 16 out of 20 years of Croatia's independence. However, it stands little chance of securing a third straight four-year term.
A resurgent opposition coalition led by the Social Democrats (SDP) of Zoran Milanovic, holds a seemingly unassailable lead in all public opinion polls.
Prime Minister and HDZ leader Jadranka Kosor appeared to acknowledge that in brief remarks on Monday made during her electoral tour of the country.
One of the HDZ's tasks is to prevent the (coalition) from gaining such advantage in parliament that would enable them to change the constitution on their own and enforce projects that would not be good for Croatia, like calling the International Monetary Fund or cutting wages and pensions, Kosor said.
Rising unemployment and a liquidity crunch have hit Croatia hard, paralysing many businesses and overshadowing the country's most important political accomplishment since its 1991 separation from Yugoslavia -- conclusion of EU accession talks. The country should join the bloc in mid-2013.
The winners will have to make serious cuts in public spending to avoid a possible credit downgrade, complete the sale of four indebted state shipyards and improve the investment climate for foreign investors.
The economy has suffered two years of deep recession, with growth of less than 1 percent seen this year and next.
Central Bank Governor Zeljko Rohatinski said last week the new government should aim to halve the fiscal deficit over the next two years from this year's 5 percent of gross domestic product, which will mean trimming welfare and state administration.
Damir Grubisa, a political analyst and professor at Zagreb's Faculty of Political Sciences, said the centre-left coalition was poised to win but may then struggle to implement long-delayed reforms of the public sector and finances.
The new government inherits very little, and little of that small legacy is good, he said.
Kosor took over in July 2009 after her predecessor Ivo Sanader -- now in prison and facing several corruption trials -- quit without explanation halfway through his second four-year term.
She launched an anti-corruption campaign that zeroed in on state companies and banks and helped Croatia finish its EU membership talks. Eventually, this led investigators to probe the HDZ itself, prompting some newspaper analysts to talk about the party's 'moral and financial bankruptcy'.
Kosor said on Monday she would propose that the HDZ take out a bank loan to foot the election campaign bill.
These are difficult times and we must preserve the HDZ, we must not allow anyone to hit at the HDZ as a whole. Responsibility must be individual, and those individuals must be held accountable, she said.
(Reporting by Zoran Radosavljevic; Editing by Roger Atwood)