New Player for Big Poker

Božo Petrov, vice president of the Croatian government, has obviously overlooked something big. Crucial, in fact, together with the decision on participation in the current government in the neighbouring country. This is the only way to understand his last evaluation, from a few days ago, that the only reason for the creation of an impression of instability and inoperability of the government of Tihomir Orešković was not its real problem with the ruling and management of the state, or even extremely diverse government coalition and even less the dependence of the prime minister on parliamentary votes, which he can no longer politically control, because of the way of the appointment, but the biggest Croatian oil company, Ina.

However, Petrov was not entirely wrong in so binding political assessment of the conditions in the country – he was just not presented with certain key facts. Or they have been presented to him only now, after the party re-election of the both key players, former prime minister Zoran Milanović, as well as the winner of the parliamentary elections, Tomislav Karamarko. They have both once again strengthened their leadership positions pretty well and at the same time confirmed that their parties represent the majority of Croatian voters. Moreover, not only did they are aware of the secrets of the consequences of the recorded lunch held in Zagreb restaurant “Marcellino” but that together (i.e. without Petrov and Orešković) they also have mechanisms for possible solution.

The stakes are high and measured in billions of euros. The political consequence of unfavourable outcome could only be the fall of the current Croatian government. However, it would not even be the most interesting thing, in fact, since the governments are changing anyway, if the consequences of possible response could not be felt in Slovenia too.

Therefore, it is necessary to go quite back, i.e. in 2003. The president of the then government was Dr. Ivica Račan. At one of the sessions of the cabinet, a decision on selling of shares of the national oil company INA to Hungary’s MOL was made, among other things. It seemed relatively easy. The decision that could have been made also by Račan could only have been very restrictive. In accordance with a known principle, let them pay us, but they should not expect to get the right to make decisions. That is, the right itself to be able to buy a part of our property is immense. Among the potential buyers there were Hungarians, including Austrian OMV and Russian Rosneft, which, however, eventually did not submit a bid. That information, which was almost entirely insignificant during the years of European growth, became interesting later. During that time, a key strategic battle started between the western and the eastern world for the energy and all other related predominances in the Balkans. The Austrians had bad or at least advisers not good enough anymore. For entry into the property of the Croatian oil company they had offered almost a hundred million less than the Hungarian MOL. The then Austrian head of Austrian oil and gas major, Wolfgang Ruttenstorfer, grumbled. Excellently paid lobbyists, more or less connected with the influential Hypo bank, gave him the wrong information. Without delay, on 11/7/2003, he wrote a letter and addressed it to the Croatian government, offering a higher price than the other competitors. It was too late. Ruttenstorfer was mad, because he knew that a very important battle was lost. But not the war for the entire market in the region, he believed. Therefore, only a few months later, he started negotiations for the purchase of half of the share in the Slovenian company OMV- Istrabenz, which he successfully completed in June 2004. However, it was only a small balm to the wound.
To be specific, the Hungarians had already started their great campaign. They signed a new contract with the Croatian government, therefore, the government of Dr. Ivo Sanader. With, for incidental readers, relatively modest content. On amendment of the agreement. The above amendment not only enabled them to increase the stake in the oil company, but also gave them the management rights. The agreement was reportedly concluded in the then famous Zagreb restaurant “Marcellino”, between two persons sitting at the table across each other, Sanader and president of the board of the Hungarian oil company, Zsolt Hernádi. Of course, complete conversation and lunch was recorded, in both audio and video form. Ten million euros, a figure written on a piece of paper, exchanged by the interlocutors during the lunch, was the alleged service fee. It also included, among other things, an obligation that the Republic of Croatia shall purchase, until at least until 2023, all the natural gas produced by INA, in accordance with the pre-established prices, with minimal concession rent. Determined gas price was determined as higher than the price of imported Russian gas. Significant is the fact that Sanader did not negotiate alone, that he had a special adviser in the oil company. Jozo Petrović allegedly operationally prepared all the necessary decisions. It seemed the role of that gentleman with gray hair and rich moustache of the same colour, not rather talkative gentleman, would become clearer in the court proceedings, which the Croatian courts initiated against Sanader. However, it all ended with the decision of the Constitutional Court by which all Sanader’s convictions were rejected. The whole business with the Hungarians no longer represented the example of corruption, but of bad business decisions. To be specific, every ruling has its own price list. That one was directly worth at least several billion euros, and indirectly, because of the obligation of buying gas in the next ten years, several times more.

Here an understanding of the demands of a new player at a poker table, vice president of the Croatian government, Božo Petrov, begins. Specifically, Sanader was not the only participant who made decisions. Annexes to the Agreement were signed by his successor, Jadranka Kosor. But it did not end here either. The first days of July last year, the Hungarian foreign minister Péter Szíjjártó was greeted by the then head of the opposition, the current first vice president of the Croatian government, Tomislav Karamarko. They estimated that the relations between the two countries were at the lowest point, and that the cause of this was the long dispute of two mentioned oil companies. Of course, the meeting and the dialogue were not accidental, since Karamarko also gave his vote for the amendment of the agreement, to the Hungarian benefit.

He was not the last either. Still, he was the last one from his party, which was at that time in opposition. Zoran Milanović became the new prime minister. His attitude was legally clear. What is sold, is sold. If you want to buy back the sold thing, you have to pay much more than what we have got and much more than we are able to.

If Jozo Petrović was the one who connected the interests of Sanader, Kosor and Karmarko, as the president of one of the key Croatian parliamentary parties, then Siniša Petrović had similar position at the time of Milanović’s government. A respected lawyer, one of the three, with Milanović and former minister of justice, Orsat Miljenić, a friend from the Zagreb Faculty of Law. With the beginning of ruling of his friend’s government, he took over one of the most important functions. He became chairman of the supervisory council of the state oil company. Truth be told, the state company, but not owned by a single state. Croatia was already in various arbitration proceedings with the Hungarians back then. However, paying attention to that course would again keep us away from the desired one.

It is only important to know that in the arbitration proceedings, the Croatian government was represented by the then minister Ivan Vrdoljak, as well as that the then deputy prime minister Slavko Linić was a member of the supervisory board of the oil company. They both had their own comments about Milanović’s trustee Petrović. The first one indirectly accused him of being the Hungarian spy, and second one that that he was, by the order of prime minister, discredited and that he wants to turn a major oil company, which should be a leader in the region, into a modest derivatives dealer.

The current Croatian government, led by Tihomir Orešković, has problems with the coalition consents. First of all, with the consent of both vice-presidents, Karamarko and Petrov, as well as their parties and their parliamentary votes.

In the recent, almost plebiscite wins on party congresses, both Karamarko and Milanović have strengthen their political power. They can decide together, though one in power and other one in opposition. And there is only one fact that completely obliges them to such kind of thoughts about political cooperation. It is a defeat in arbitration proceedings related to the oil company and the consequent payment of the horrible indemnities. At the same time, there is another fact that could alleviate such a result and eventual fall of the government. And that is a joint gaining observation of new target. And a target is only one. Important from both the economic as well as financial point of view. The saving one, primarily from the internal political point of view, is the one that somehow forgets the role of both Petrovićs as a joint connection of long-time changing authorities in Croatia.

This subject of common salvation would be only the takeover of a significant share of Slovenian oil dealer.