Croatia conservatives, reformists start talks on new government

September 13, 2016 9:16 AM EDT

Andrej Plenkovic, president of the Croatian Democratic Union (HDZ), speaks after exit polls in Zagreb, Croatia, September 11, 2016. REUTERS/Antonio Bronic


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ZAGREB (Reuters) - Croatia's conservative HDZ party and its former junior coalition partner moved closer on Tuesday to forming a new cabinet after the HDZ won the most seats in a snap election at the weekend.

The HDZ won 61 seats in the 151-parliament, while the reformist center-right Most ("Bridge") party came third with 13 seats. An alliance led by the HDZ's arch-rivals the Social Democrats took 54 seats.

"In the next several days our experts will carry on working on details... We want a long-term cooperation and stable four-year term in office," the HDZ leader Plenkovic said after the first round of post-election talks with Most. The next meeting will take place next Monday.

The HDZ and Most sat uneasily together in a previous cabinet that collapsed in June after just five months.. The HDZ has since changed its leader and Plenkovic has said he wants to begin a new phase of cooperation.

Most leader Bozo Petrov also voiced satisfaction after the first round of talks with new HDZ leadership saying it was a good start for rebuilding confidence.

An HDZ/Most coalition would need another small party or ethnic minority deputies on board to secure a parliamentary majority, and analysts say it could be stable provided Most accepts the limits of its influence as a junior partner.

Before the election, reformist Most put forward seven initial demands for supporting any cabinet.

These include changes to the financing of political parties, lower taxes for businesses, auditing of the central bank and an Adriatic economic zone -- a proposal that would likely require consultation with Croatia's European Union partners.

"We have understanding for some demands, but some require more detailed talks," Plenkovic said.

He said the HDZ was ready to talk to other potential partners, but that Most seems "a natural partner for forming a new cabinet".

Last year post-election coalition wrangling between the two biggest parties and Most lasted more than two months. Some analysts say that Most's current demands are not relevant to a key challenge awaiting the next cabinet - boosting Croatia's moderate economic recovery.

Any government will struggle to deliver reforms being urged by the EU, which is monitoring Croatia's debt-burdened economy and an investment environment it sees as bureaucratic and unfriendly to business.

(Reporting by Igor Ilic; Editing by Hugh Lawson)



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