Nationalists claim Croatia win
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The next government could lead Croatia into the European Union.
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ZAGREB, Croatia (Reuters) -- The leader of the nationalist Croatian Democratic Union (HDZ), Ivo Sanader, has claimed victory in a weekend general election, as voters swung back to the right and returned to a party once shunned by the West.
"I expect President Stjepan Mesic to give us the mandate once the final results are published," Sanader told a news conference on Monday. The new parliament will probably convene in late December.
Prime Minister Ivica Racan conceded defeat of his Social Democrats-led coalition, congratulating the winners and "wishing them good luck in forming the new government." President Stjepan Mesic agreed the HDZ had a "convincing majority."
Sanader says the HDZ, which ruled post-communist Croatia from 1990 to 2000, is now moderated and defiance of the West on democratic standards and human rights is a thing of the past.
His future center-right government faces the uphill task of cooperating with the United Nations war crimes tribunal, helping the return of Serb refugees and regional cooperation -- crucial for Croatia's progress towards European Union membership.
Seeking to dispel Western fears, Sanader said his priorities were "to lower taxes, fight corruption, improve the judiciary and join NATO in 2006 and the EU in 2007 by meeting all international obligations, and resolve all problems with neighbors."
Analysts believe the nationalist triumph has more to do with voter discontent at market reforms that failed to improve their lives, than a resurgent nationalist sentiment.
"It seems...that no transitional government can win the second term because it carried out painful reforms. As a consequence, you get a populist mood based on social fairy tales," said Serbian analyst Zoran Lutovac.
But he said the result could fuel more nationalism across the Balkans. "Nationalism is contagious. Rightists on the one side provoke their counterparts on the other side," he said.
Markets steady
The Croatian kuna currency and bonds traded steady while investors waited for final confirmation of the defeat of Racan's four-year-old, center-left coalition.
"Investors and international institutions will likely wait for the new cabinet to present its economic and fiscal strategy before making conclusions about Croatia's credit worthiness," said CSFB analyst Tatiana Orlova.
The European Commission, which must decide if Croatia starts accession talks next year, said it looked forward "to working with the new authorities on the road to reform and EU integration."
"The important thing for us is that Croatia has a government that is committed to fulfilling the country's international obligations and promoting economic and political reform," a spokeswoman for EU foreign policy chief Javier Solana said.
Western countries will watch closely to see how Sanader handles an outstanding demand from The Hague war crimes tribunal for the arrest of fugitive General Ante Gotovina, accused of atrocities against Serbs in the intermittent 1991-95 war.
With more than 90 percent of the votes counted, the HDZ had won 62 seats to the SDP's 34. If the present alliances hold, the three-party HDZ-led bloc would have a projected 75 seats versus 63 for the SDP-led bloc. Sanader's position will be further boosted by three or four HDZ deputies for the diaspora.
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