EUROPEAN COMMISSION Brussels, 9.11.2005 SEC (2005) 1424 Croatia 2005 Progress Report {COM(2005) 561 final} {COM(2005) 556 final} 1 A. INTRODUCTION...............................................................................................................................3 1. PREFACE ...........................................................................................................................................3 2. RELATIONS BETWEEN THE EU AND CROATIA ...................................................................................4 B. CRITERIA FOR MEMBERSHIP.....................................................................................................9 1. POLITICAL CRITERIA .........................................................................................................................9 1.1 Democracy and the rule of law.............................................................................................10 1.2 Human rights and the protection of minorities.....................................................................16 1.3 Regional issues and international obligations......................................................................22 1.4 General evaluation ...............................................................................................................32 2. ECONOMIC CRITERIA.......................................................................................................................34 2.1 Economic developments........................................................................................................34 2.2 Assessment in terms of the Copenhagen criteria ..................................................................36 2.3 General evaluation ...............................................................................................................45 3. ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP ................................................................47 3.1 Chapters of the acquis ..........................................................................................................47 Chapter 1: Free movement of goods............................................................................................................... 47 Chapter 2: Freedom of movement for workers ............................................................................................... 50 Chapter 3: Right of establishment and freedom to provide services...............................................................51 Chapter 4: Free movement of capital.............................................................................................................. 52 Chapter 5: Public procurement ....................................................................................................................... 54 Chapter 6: Company law ................................................................................................................................ 55 Chapter 7: Intellectual property law................................................................................................................ 56 Chapter 8: Competition policy........................................................................................................................ 57 Chapter 9: Financial services.......................................................................................................................... 59 Chapter 10: Information society and media .................................................................................................... 60 Chapter 11: Agriculture and rural development.............................................................................................. 62 Chapter 12: Food safety, veterinary and phytosanitary policy........................................................................ 64 Chapter 13: Fisheries ...................................................................................................................................... 67 Chapter 14: Transport policy .......................................................................................................................... 68 Chapter 15: Energy......................................................................................................................................... 70 Chapter 16: Taxation ...................................................................................................................................... 71 Chapter 17: Economic and monetary policy................................................................................................... 72 Chapter 18: Statistics ...................................................................................................................................... 74 Chapter 19: Social policy and employment .................................................................................................... 75 Chapter 20: Enterprise and industrial policy................................................................................................... 77 Chapter 21: Trans-European networks ........................................................................................................... 79 Chapter 22: Regional policy and coordination of structural instruments ........................................................ 80 Chapter 23: Judiciary and fundamental rights................................................................................................. 82 Chapter 24: Justice, freedom and security ...................................................................................................... 90 Chapter 25: Science and research ................................................................................................................... 95 Chapter 26: Education and culture.................................................................................................................. 95 Chapter 27: Environment................................................................................................................................ 97 Chapter 28: Consumer and health protection................................................................................................ 100 Chapter 29: Customs union........................................................................................................................... 101 Chapter 30: External relations ...................................................................................................................... 103 Chapter 31: Foreign, security and defence policy......................................................................................... 104 Chapter 32: Financial control........................................................................................................................ 105 Chapter 33: Financial and budgetary provisions........................................................................................... 107 3.2 General evaluation .............................................................................................................107 C. EUROPEAN PARTNERSHIP: OVERALL ASSESSMENT......................................................109 STATISTICAL ANNEX ..........................................................................................................................111 2 A. INTRODUCTION 1. Preface Following the conclusions of the Luxembourg European Council in December 1997, the Commission has reported regularly to the Council and the Parliament on progress made by the candidate states in preparing for EU membership. This Progress Report is the first such report on Croatia following the decision of the European Council of 17 and 18 June 2004 that Croatia is a candidate country. In December 2004, the European Council stated that: “The European Council noted with satisfaction the progress made by Croatia in preparation for the opening of accession negotiations. Reaffirming its conclusions of June 2004, it urged Croatia to take the necessary steps for full cooperation with ICTY and reiterated that the remaining indictee must be located and transferred to the Hague as soon as possible. It invited the Commission to present to the Council a proposal for a framework for negotiations with Croatia, taking full account of the experience of the fifth enlargement. It requested the Council to agree on that framework with a view to opening the accession negotiations on 17 March 2005 provided that there is full cooperation with ICTY.” However, in the absence of confirmation of the above mentioned full cooperation, the General Affairs and External Relations Council (GAERC) of 16 March 2005 decided to postpone the opening of accession negotiations and agreed that a bilateral intergovernmental conference (IGC) would be convened by common agreement as soon as the Council has established that Croatia is cooperating fully with the International Criminal Tribunal for the former Yugoslavia (ICTY). The Council also adopted a negotiating framework for Croatia. Following a positive assessment on 3 October 2005 from the ICTY Chief Prosecutor that cooperation was now full, the Council concluded on the same day that Croatia had met the outstanding condition for the start of accession negotiations and an IGC opening the negotiations was held. The Council agreed that less than full cooperation with ICTY at any stage would affect the overall progress of negotiations and could be grounds for their suspension. The structure of the report is largely the