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As Croatia Struggles, Some Wonder if It Won Entry to European Union Too Soon

Workers on an organic farm run by Jadranka Boban Pejic, who says bureaucracy and corruption in Croatia hurt her company’s performance.Credit...Matej Leskovsek for the International Herald Tribune

ZAGREB, Croatia — With a consignment of goods stuck at customs, Jadranka Boban Pejic, who runs an organic food company, soon found out that she needed to grease the wheels of Croatia’s creaky bureaucracy. So, she said, she reluctantly agreed to a little side deal to speed things up: about 130 euros worth of groceries for the customs officer’s wife.

The episode this year seems like a small thing, but it was just one of many hurdles her company, Biovega, has faced, problems symptomatic of the pervasive corruption and labyrinthine bureaucracy that, Ms. Pejic said, make Croatia ill-prepared for membership of the European Union, which it joined in July.

“Corruption is on every level,” Ms. Pejic said. “Even if your attitude is ethical, sometimes you have no choice.” Croatians, she said, are not ready for the Union’s blizzard of new rules and regulations. “We didn’t have time for preparation, and right now it’s chaos,” she said.

Croatia’s readiness is important not just for business owners like Ms. Pejic, but also for the 27 other European Union nations. Since Romania and Bulgaria joined the Union in 2007, worries have grown that those two nations, the bloc’s poorest, entered prematurely. Both have continued to struggle with unstable governments and corruption, even as they have tried to absorb $35 billion in regional development aid allocated by the Union since 2007.

European officials praised Croatia’s entry as a symbol of the continuing allure of the bloc, despite its economic crisis, but some fear that Croatia will be another weak fringe as the euro crisis forces governments to trim budgets, and sow instability among more established members, which have problems with corruption of their own.

Much is riding on Croatia’s success, analysts and European Union officials agree, and whether it can show other Balkan countries waiting for membership, including Montenegro and Serbia, that a region ravaged by war in the 1990s can find a better future as part of the Union.

“The received wisdom about Romania and Bulgaria is that their admission was premature,” said Dimitar Bechev, senior policy fellow at the European Council on Foreign Relations. “If Croatia is seen as a success it can bolster enlargement.”

Yet despite years of lobbying by successive governments, Ms. Pejic’s complaints reflect the apparent lack of enthusiasm among Croats for membership in the European Union. Many worry that, given their enduring problems with corruption and their economy’s fragile state, the country will be overwhelmed by larger and more developed nations like Germany, which historically has cast a long shadow here.

“People are tired and disappointed, particularly in the political leadership,” Ms. Pejic said. “I have the opinion that we will be a province of Germany or Austria. I am not sure we have any chance.”

This month, the European Bank for Reconstruction and Development’s president, Suma Chakrabarti, visited the Union’s newest member to see firsthand some of his organization’s work here. The bank, which is owned by 64 countries, including the United States, in addition to the European Union and European Investment Bank, was set up after the fall of the Berlin Wall to help former Eastern bloc nations make the transition to market economies — in part by supporting private enterprises like Ms. Pejic’s. She received an award from the bank as one of its female entrepreneurs of the year in 2011.

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Credit...The New York Times

While encouraging about Croatia’s prospects, Mr. Chakrabarti, in an interview, warned that “Croatia clearly needs to tackle corruption.” He cited an index by Transparency International, a group that monitors corruption globally, that ranked Croatia 62nd best out of 176 nations. That was better than some neighbors and older Union nations, but behind Poland, which placed 41st.

In 2012, Croatia’s former prime minister, Ivo Sanader, was jailed for 10 years for taking bribes. The current government oversaw Croatia’s accession to the Union after the country met tougher conditions than any other recent applicant. Still, few people believe that corruption has yet been rooted out.

Jelana Berkovic, of GONG, a nongovernmental organization that focuses on democracy and human rights, says that prosecuting Mr. Sanader signaled that Croatia was “willing to check all the boxes” to get into the European Union. But, she said, she is not confident “that the political culture has changed or that the institutions are completely and fully dealing with corruption.”

Given its corruption problems, many people doubt that Croatia can make good use of almost 14 billion euros in aid that it could receive from the Union from 2014 to 2020. Mr. Chakrabarti said too much of Croatia’s economy remained uncompetitive and under government control, the labor market was too rigid, and privatization needed to be sped up. “I don’t think it has got its strategy together yet as well as it should,” he said.

Many others here agree. “No, we weren’t ready,” said Ruza Tomasic, an outspoken right-wing politician who received one of the highest personal vote totals in Croatia’s elections to the European Parliament earlier this year.

“We were supposed to walk into the E.U. with our heads held high saying, ‘Look at us — our economy is fantastic, our exports are fantastic, we don’t have too many unemployed, we are bringing you something,' ” she said. “This way, they are looking at us like we only joined because we need a handout.”

In the 20 years or so since Ms. Pejic and her husband, Zlatko, founded their business, they have experienced the full range of frustrations and dysfunction that remain a drag on Croatia’s progress, even after it gained independence in the Balkan wars that broke apart the former Yugoslavia during the 1990s.

Ms. Pejic said her company was fighting with the Croatian bureaucracy to secure enough electricity to run a bakery and heat greenhouses, which would allow the company’s farm to double its 20-person work force.

The limited energy supply has forced her to choose between paying about 60,000 euros, about $79,000, to finance construction of an electricity substation for the village, or to buy natural gas in canisters.

She said she has also spent months trying to negotiate the right to rent or buy a strip of government-owned land that separates two parts of the company farm 37 miles from here.

Such struggles have slowed her company’s performance, and that of the country.

Croatia’s finance minister, Slavko Linic, said in an interview that the country faced problems, but that he thought membership in the European Union would result in improvements. “We are very clear that we try to fight with any kind of corruption,” he said, adding that he recently dismissed nine senior tax officials for just that reason.

But even after a crackdown on corruption at the customs office, Ms. Pejic said, the latest shipment of imports for her organic food company was held up once again. This time, she said, the explanation was that the arrest of 15 officers had left no one to process the paperwork.

A version of this article appears in print on  , Section A, Page 6 of the New York edition with the headline: As Croatia Struggles, Some Wonder if It Won Entry to European Union Too Soon. Order Reprints | Today’s Paper | Subscribe

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