CROATIA, BALKAN PENINSULA

C R O A T I A

Croatia (in Croatian, Hrvatska), republic in south-eastern Europe, in the Balkan Peninsula, bordered on the north by Slovenia and Hungary, on the east and south by Bosnia and Herzegovina, and on the east by Serbia. The area around the Croatian city of Dubrovnik, located at the southernmost tip of the republic's long western coastline on the Adriatic Sea, has a short border with Montenegro. Serbia and Montenegro since 1991 have established themselves as the Federal Republic of Yugoslavia. Formerly a constituent republic of the Socialist Federal Republic of Yugoslavia, Croatia declared its independence on June 25, 1991. The country has an area of about 56,538 sq km (21,829 sq mi). Zagreb is the republic's capital and largest city.

Land and Resources Croatia's diverse territory includes flat plains, low mountains, a coastline extending 1,778 km (1,067 mi), and offshore islands. The Pannonian Plains in the east are a low-lying, fertile, agricultural region drained by the Drava and Sava rivers; the latter forms part of the border with Bosnia and Herzegovina. Both rivers flow into the River Danube, one of the most important waterways in Europe. The historical area of Slavonia lies in this part of the republic. In the west, Dalmatia is a narrow, barren strip of land within the Dinaric Alps, which slopes down to the Adriatic Sea. The Dinaric Alps consist of several parallel ranges of mountains. The coastal range is partially submerged, a phenomenon that accounts for the republic's numerous bays, gulfs, inlets, and more than 1,000 offshore islands. The historically and archaeologically important area of Istria, a peninsula that stretches out into the Adriatic from Slovenia, lies to the north and west of Dalmatia.

Climate A continental climate predominates throughout the interior of the republic with hot summers and cold winters. The Adriatic coast, however, enjoys a Mediterranean climate with mild, rainy winters and warm, dry, and brilliantly sunny summers. The average temperature in Zagreb is 0° C (32° F) in January and about 24° C (75° F) in July; the January and July averages in Dubrovnik are 9° C (48° F) and 25° C (77° F) respectively. Annual precipitation along the coast is about 760 mm (30 in); in Zagreb it is about 652 mm (26 in).

Natural Resources Croatia is rich in mineral resources, and before the outbreak of war in 1991, mining and quarrying were important sources of employment. Natural gas, oil, bituminous coal, lignite (brown coal), bauxite, low-grade iron ore, and china clay are the most abundant of the mineral resources found in Croatia. In certain regions calcium, natural asphalt, silica, mica, and salt can also be found.

Plants and Animals Deciduous forests predominate on the plains and in much of the mountainous area. Beech and oak trees are common. The Karst, a barren limestone plateau, dominates the Croatian landscape in some areas; the island of Pag consists almost entirely of karst terrain. There are 50 types of protected plant life in Croatia. Wildlife in Croatia includes hare, fox, lynx, weasel, otter, bear, deer, marten, boar, wildcat, wolf, and mouflon (wild sheep).

Population Ethnically, Croats constituted about 78 per cent of Croatia's population according to the 1991 census; war, however, has taken a toll on the population since then. Serbs make up the largest of the republic's other ethnic groups-about 12 per cent, according to the 1991 census. The vast majority live in Krajina (western and central Croatia), Eastern Slavonia (on the border with Serbia), and in the area around Okucani (in Western Slavonia). Between 1991 and 1995 these areas attempted to secede from Croatia to join a "greater Serbia" and were unified in the self-declared Republic of Serbian Krajina (RSK). Krajina and the area around Okucani were reintegrated into Croatia under the 1995 Dayton peace agreement, with Eastern Slavonia due to be reintegrated by July 1997 after nearly two years under UN administration (see History: Croatian Independence and Civil War, below). Some 300,000 Croats were displaced when these areas were seized. However, many are now returning to their former homes, leading to new concerns about a consequent major exodus of Serbs, particularly from Eastern Slavonia. Some 300,000 Croats were displaced when these lands were seized. Other ethnic groups living in Croatia include Muslims (0.9 per cent), ethnic Hungarians (0.5 per cent), and ethnic Slovenes (0.5 per cent).

Population Characteristics The total population of Croatia according to the 1991 census was 4,784,265; it was estimated in 1996 at 4,775,000. Population density in 1996 was 84.4 people per sq km (218.1 per sq mi). Almost 55 per cent of the population is urban.

Principal Cities The republic's largest cities include Zagreb, the republic's primary industrial centre, with a population of 726,770 (1991 census); Split (189,388) and Rijeka (167,964), two important seaports; and Osijek (104,761), an industrial centre. The remainder of the population live in smaller towns-including Zadar, Pula, Karlovac, Slavonaki Brod, Dubrovnik, and Sisak-and villages.

Religion Most Croats are Roman Catholic; the majority of Serbs belong to the Serbian branch of the Eastern Orthodox Church. There are also small Muslim and other religious minorities.

Language The republic's official language is the western version of the Serbo-Croatian language, called Croato-Serb in Croatia, or, familiarly, Croatian. Following the commencement of war with Serbia in 1991, many Croats sought to differentiate Croatian further from Serbian, resurrecting archaic words and stressing the difference in the script used. Croatian is written using the Latin alphabet, while Serbian utilizes the Cyrillic alphabet common among Slavic languages, particularly Russian. The Croatian authorities have also rejected the 1954 Novi Sad Agreement, which declared that Serbo-Croatian is one language with two scripts. The differences in script are in large part a result of the different religions of the two groups.

Education Free pre-school, primary, and secondary education is available to all citizens; primary and lower secondary education between the ages of 6 and 15 is compulsory, but secondary education after 15 is optional. In the 1994-1995 school year, some 65,395 children were enrolled in pre-school institutions, 428,050 in primary schools, and 192,050 in secondary schools. Approximately 97 per cent of the population over the age of ten can read and write. The republic has 61 institutions of higher education, including four universities located in Zagreb (founded 1669), Split (1974), Rijeka (1973), and Osijek (1975), and three polytechnic institutes. In the 1994-1995 academic year there were some 77,525 students in higher education. In 1995 11.7 per cent of the national budget was spent on education.

Economy Croatia was one of the most prosperous of the six constituent republics of the former Socialist Federal Republic of Yugoslavia, producing an estimated 25 per cent of the whole country's gross national product (GNP) in the late 1980s. Almost two thirds of the republic's land was cultivated, and sugar beet, wheat, and maize were the principal agricultural products. Croatia's rich mineral resources supported a productive mining industry. Other industries included oil refineries, iron and steelworks, shipyards, and plants producing chemicals, foodstuffs, machinery, cement and concrete, metal products, and textiles. Even before the outbreak of war in mid-1991 certain sectors of the Croatian economy were facing problems; in 1990, 500 state enterprises were declared bankrupt, while in the first quarter of 1991 industrial output declined by 12 per cent compared with the same period of 1990. However, Croatia's economy went into steep and rapid decline on the outbreak of war in June 1991. Between 1991 and 1994 gross domestic product (GDP) declined by more than one third, with a parallel decline in GNP reflecting the collapse of the tourist industry, a major source of foreign exchange earnings, and damage to the industrial and agricultural sectors. It is estimated that about one third of Croatia's industrial sector was destroyed in the war against Serbia, though much of the fighting was in rural areas with consequent damage to productivity and farm equipment. In addition, much of the oil industry and the most productive agricultural land were in areas seized by the Serbs. Overall the war is estimated to have cost the country more than US$20,000 million in terms of damage to the infrastructure and loss of output.
Following the outbreak of hostilities with Serbia in early 1991, industrial output declined dramatically; by the end of 1993 it was estimated to be at only about half the 1989 level. The republic's GDP fell from an estimated US$13,500 million in 1990 to about US$7,500 million in 1992. Inflation soared, reaching more than 500 per cent a year at the end of 1992 before being controlled, and unemployment, excluding refugees, topped 17 per cent in 1993. The government also had to support more than 627,000 refugees and displaced people, at an estimated cost of one fifth of total budget expenditure.
Croatia began a slow economic recovery in late 1993, although fighting continued with varying intensity for another two years. The republic joined the International Monetary Fund (IMF) in January and the International Bank for Reconstruction and Development (World Bank) in April. By the end of the year the government had built up US$1,500 million in foreign reserves, and, under an IMF-style economic reform programme, had privatized almost half of the country's businesses. The return of rains after a drought in 1992 enabled agricultural production to increase by 20 per cent. In 1994 state budget included some US$3,860 million in revenues and US$3,720 million in expenditure.
The recovery has continued since, aided by the ending of fighting in October 1995, by continued structural adjustment policies, and by the steady recovery of the tourist industry. The normalization of relations with foreign banks, following an August 1996 agreement by the Croatian government to assume 29.5 per cent of the Socialist Federal Republic of Yugoslavia's foreign commercial bank debt, paved the way for assistance for a reconstruction programme. By 1995 GDP was estimated to have recovered to US$10,600 million. However, unemployment remains high (19 per cent, 1996 estimate) and shortages of many goods persist. A number of other problems face the economy, including the cost of supporting the many Bosnian refugees still living in the country, and of resettling the more than 300,000 Croats displaced during the fighting.

Agriculture, Forestry, and Fishing The agricultural sector in Croatia employs about 4.5 per cent of the workforce (1995). The principal crops, with yield in tonnes (1995), include maize (1.7 million), wheat (877,000), potatoes, (692,000), sugar beet (691,000), and grapes (339,000). The livestock population in Croatia in 1995 included almost 1.2 million pigs, over 490,000 cattle, 453,000 sheep, and over 12 million chickens.
Roundwood removals in Croatia for 1995 totaled 2.4 million cu m (84.8 million cu ft). The total fish catch (freshwater and marine) for 1995 was some 20,000 tonnes.

Mining The mineral wealth of Croatia is reflected in an active mining industry, despite the effects of war. Production in many areas, particularly bauxite and iron ore mines, has yet to return to pre-war levels. Chief mineral resources, with production in 1995, are bituminous coal (75,000 tonnes), crude oil (1.5 million tonnes), and natural gas (1.9 million cu m/67 million cu ft).

Manufacturing The Croatian manufacturing sector is a significant employer and wealth generator, contributing just over 19 per cent of GDP in 1995, and employing just over 33 per cent of the labour force even in 1992 at the height of hostilities. However, around 30 per cent of Croatia's manufacturing base was destroyed in the course of the war. Principal manufacturing industries include textiles, chemicals, construction materials, food products, and steel.

Tourism Croatia's once substantial tourist industry has suffered considerably as a result of the war. Over 80 per cent of the former Yugoslavia's tourist revenues in the late 1980s came from Croatia, but by the mid-1990s visitor numbers were estimated to be still only around 20 per cent of their 1980s total. Principal tourist destinations are the resorts of Croatia's Adriatic coast: the region of Dalmatia. In 1995 some 1.3 million tourists visited Croatia.

Energy Croatia lost about 30 per cent of its electricity-generating capacity in the hostilities of the early 1990s, and remains heavily dependent on imported fuel. Important energy sources for Croatia include offshore oil wells, coal, and the Krško nuclear reactor. The latter is located in Slovenia and is in the process of being decommissioned under an agreement between the two countries. Output of electricity in 1995 totaled 9.1 billion kWh.

Currency and Banking The monetary unit of Croatia is the kuna of 100 lipa (6.41 kunas equal US$1; 1998). Croatia introduced this currency in May 1994 to arrest hyperinflation, replacing the Croatian dinar, which had replaced the Yugoslav dinar in December 1991. The choice of name inspired protests from Jewish, Serbian, and Gypsy communities, as it was the same as the currency used by the Fascist Ustaše government which controlled Croatia from 1941 to 1945, committing many atrocities against these groups. The bank of issue is the National Bank of Croatia.

Commerce and Trade Before the outbreak of war, Croatia's exports totaled about US$2,900 million a year, while imports cost about US$4,400 million. The trade deficit worsened dramatically during 1991, but after 1992 there was some recovery in external trade. Exports in 1995 were worth US$4,600 million, with imports costing US$7,500 million. Croatia's most important trading partners include Italy, Germany, Slovenia, Austria, the United Kingdom, and the United States. Chief export goods are machinery, transport equipment, chemicals, and foodstuffs.

Labour In 1995 the total Croatian workforce numbered just under 1.2 million people. In 1996 241,000 people were registered unemployed.

Transport In 1994 Croatia had around 21,800 km (13,546 mi) of roads, including around 300 km (187 mi) of motorways. In 1995 there were around 710,900 private cars, or 1 car for every 6.7 people. In 1994 there were some 2,700 km of railways.

Communications In 1992 nine daily newspapers were published in Croatia. The Croatian media have come under strong government pressure in recent years; in March 1996 it was made an offence for the press to "defame" the government. In 1994 Croatia had some 955,000 radios and 890,000 televisions in use, as well as just under 1.4 million telephones.

Government On December 22, 1990, the government of Croatia promulgated an independent democratic constitution, while still one of the constituent republics of the Socialist Federal Republic of Yugoslavia. The constitution guarantees basic human rights, including the right of ethnic minorities to cultural autonomy.

Executive and Legislature The president of the republic is the head of state, elected by direct popular vote to a five-year term. The president calls elections for the legislature, and also appoints the Council of Ministers (Cabinet), including the prime minister.
The Croatian parliament, or Sabor, consists of the 138-member Chamber of Representatives (Zastupnicki Dom), which adopts all laws, and the 63-member Chamber of Municipalities (wupanije Dom), which can only propose or request reconsideration of laws. Members of both chambers are elected to non-mandatory four-year terms by direct popular vote. Elections to the Chamber of Representatives are by a mixture of proportional representation and first-past-the-post; those to the Chamber of Municipalities by proportional representation. Members of the Chamber of Municipalities are elected in groups of three by the citizens of their respective counties and districts.

Political Parties Croatia's principal political parties are the ruling nationalist Croatian Democratic Union (CDU, founded 1989), the Croatian Social-Liberal Party, the Social Democratic Party of Change (former Communists), the ultra-nationalist Croatian Party of Rights, the Croatian Independent Democrats (breakaway group from the CDU), and the Istrian Democratic Assembly.

Judiciary The Supreme Court is Croatia's highest court. All judges are appointed by the Chamber of Municipalities, at the recommendation of the Chamber of Representatives. There is also a constitutional court as well as various trial and appellate courts.

Local Government

Croatia is divided administratively into 21 counties, 68 towns, and 324 municipalities, all administered by elected councils.

Health and Welfare A state-subsidized health-care system is available to all Croatian citizens. In 1994 there were 9,138 doctors (with 524 people per doctor) and 1,800 dentists in Croatia. The infant mortality rate in 1995 was 17 deaths per 1,000 live births. In 1995 only 0.7 per cent of the national budget was spent on health care.

Defense In 1997 the Croatian armed forces numbered more than 58,000 on active duty and 220,000 in the reserves. The active duty personnel consisted of 50,000 in the army, 3,000 in the navy, and 5,000 in the air force, including air defense forces. There are also 40,000 armed military police in Croatia. Under Croatian law, ten months of military service is compulsory for all men.

International Organizations Croatia became a full member of the UN in May 1992, and is also a part of the Central European Initiative, a group promoting regional, political, and economic cooperation. Croatia has special guest status on the Council of Europe, with an application pending for full membership.

History Croatia formed part of the province of Pannonia under the Roman Empire. Pannonia was conquered by the Avars, a Mongolian people, in the 6th century AD. During the 7th century, the Croats conquered the Avars, and were conquered in their turn by the Franks. Later the region was made into the duchy of Croatia and Slavonia. In 925 Croatia became an independent kingdom, which lasted until the end of the 11th century, when a period of political anarchy led to intervention by Hungary. Except for periods of occupation by the Ottoman Empire, most of what is today the Republic of Croatia was an autonomous kingdom within the Habsburg Empire from 1102 until the Hungarian revolution of 1848 to 1849, although Dalmatia and Istria were dominated at different times by Venice and France. Croatia and Slavonia were then made separate Austrian Crown lands. In 1867 the Austrians and Hungarians created the Dual Monarchy or Austro-Hungarian Empire; Croatia was assigned to the Hungarian Crown the following year. Croatia gained its autonomy and was formally joined with Slavonia in 1881. Hungary's policy of "Magyarization" and, after 1904, anti-Serb commercial practices ultimately forged a Southern Slav ("Yugoslav") solidarity between the traditionally competitive Serbs and Croats, and led to hostility towards Hungary that was carried forward into World War I.

Yugoslav Independence During World War I, Croats and Serbs mostly fought together, hoping to create a kingdom that would unite all the South Slavic peoples. On December 1, 1918, following the overthrow of the Habsburg monarchy at the close of the war, Croatia became part of the independent Kingdom of the Serbs, Croats, and Slovenes under the Serbian monarchy of Alexander I. When conflict between Croats and Serbs led to greater national tensions, Alexander tightened control over the country, and in 1929 he renamed the kingdom Yugoslavia ("Land of the Southern Slavs"). Tensions between the two ethnic groups continued, however, and the post-war history of the state was marked by the struggle of the Croats for greater political autonomy. Croatian extremists assassinated Alexander in 1934, and the Fascist Ustaša movement began to garner support among the discontented Croat peasantry. In 1939 the approximate present boundaries of the republic were defined and the area was named Croatia.

World War II and the Formation of Yugoslavia In 1941, as Yugoslavia became entangled in World War II, a new Croatian state was formed. The new state was created as a result of the invasion and dismemberment of Yugoslavia by the Axis Powers. Italy approved the pro-Fascist puppet state dominated by the Ustaša regime, which encompassed much of Croatia and Bosnia, and was notorious for its policies towards minorities; vast numbers of Jews, Serbs, Gypsies, and political dissidents were murdered in extermination camps. Yugoslavs fought against each other during the remainder of the war; in particular, the partisan, anti-Fascist forces led by Josip Broz Tito, a Croatian Communist, fought against the Italian-backed Ustaša regime.
The Ustaša regime collapsed in 1944, and, following the end of the war, Tito reconciled all the various parts of Yugoslavia, creating the Socialist Federal Republic of Yugoslavia with Croatia as one of the constituent republics. By the terms of the peace treaty with Italy in 1947, most of Istria, formerly part of Italy, was included in Croatia. During the 1960s and 1970s Croatia's beautiful Adriatic coastline and ancient sites attracted tourism, which contributed to Yugoslavia's economy. One of the legacies of the Ustaša regime was the hostility of the federal Yugoslav government to any expression of Croat nationalism, which was equated with Fascism. Croatian anger at this, and resentment at tourism revenues going to support the poorer parts of the federation, led to a renewal of Croatian nationalism, and agitation for greater autonomy.
Following Tito's death in 1980, tensions between Croatia and the Serb-dominated Yugoslav government worsened. By the end of the 1980s demands for autonomy had been superseded by demands for independence from Yugoslavia. Croatian dissidents, including Franjo Tudjman, became more prominent among the Croatian populace. Tudjman created the nationalist Croatian Democratic Union (CDU) in 1990, after the weakened Communist government began to allow political parties to participate in the governmental process. The CDU rapidly became a mass party, and Tudjman began campaigning for the multi-party elections called by the Communist Party (renamed the League of Communists of Croatia-Party of Democratic Reform), for April and May 1990. His calls for a greater Croatia touched off protests by ethnic Serbs in Croatia, but the CDU prevailed in the elections, winning a majority of the seats in the Assembly. Tudjman was elected as President. He initially tried to allay Serb fears by making concessions such as appointing a Serbian vice-president. However, he quickly alienated the Croatian Serbs through measures such as the adoption of a new flag and police uniforms with Ustaša connotations.
Led by the Serb-dominated area of Krajina, the Serbs organized themselves and called a referendum later in the year on the issue of autonomy for Croatian Serbs. The overwhelming majority of Serbs voted for autonomy, and Serb-dominated areas subsequently began issuing declarations of autonomy. By December, three Serbian Autonomous Regions (SARs) had been established: Krajina, Eastern Slavonia, and Western Slavonia-the first two were predominantly Serb in population, but Western Slavonia was mainly held by Croats. Tudjman's government did not recognize the SARs, and when the rest of Croatia voted for independence from Yugoslavia in June 1991, the ethnic Serbian minority of about 600,000 stood firmly in opposition, determined to remain within a federal Yugoslav state, or become part of a "greater" Serbian state. A savage civil war, part of the wider Bosnian-Croatian-Serbian War, soon began, broken by frequent, short-lived ceasefires. By the end of 1991 nearly one third of the republic's territory had been taken over by the Serbs, with backing from the Serb-dominated federal Yugoslav People's Army (JNA). By December both the European Community (EC, now the EU) and the UN were involved in mediation efforts in Croatia, and the three SARs had united to declare themselves the "Republic of Serbian Krajina" (RSK), which was declared illegal by the Croatian authorities.

Croatian Independence and Civil War Croatia's standing as an independent, sovereign nation was recognized by Chancellor Helmut Kohl of Germany on December 23, 1991. More reluctantly, the remaining EC countries recognized Croatia on January 15, 1992, initiating general international recognition. On January 2, preceding EC recognition, an unconditional ceasefire was signed by the JNA and the Croatian National Guard. The UN sent in 14,000 peacekeeping troops (UNPROFOR) in February to ensure the withdrawal of JNA forces from Croatia and the demilitarization of the three Serbian enclaves. The UN troops, however, had very limited success. Although the JNA forces withdrew, Croat Serb forces remained in control of the territory they had gained in 1991, forcing out some 300,000 Croatians living in Eastern Slavonia. A second round of armed conflicts began in June, despite the UN presence, when Croatian forces tried to retake Serbian-held territories. Internal problems in Croatia led to a clampdown on democratic freedoms. The government suppressed certain newspapers and began arresting so-called extremists in June 1992.
Elections to the lower house (the Chamber of Representatives) held in August 1992 enacted some of the provisions of the new constitution adopted in 1990. Voters re-elected Tudjman in simultaneous presidential elections and gave a majority of the seats in the Chamber of Representatives to the CDU. Elections to the revamped upper house (the Chamber of Municipalities) were held in February 1993, and were also won by the CDU. During 1992 Croatia had also begun supporting Croats in Bosnia and Herzegovina, who had seized one third of Bosnian territory and created a breakaway Croat state, called the Union of Herceg-Bosna; some of its most extreme nationalist members advocated joining Croatia. EC sanctions were threatened if Croatia did not end its military involvement in Bosnia and Herzegovina, with little effect.
By mid-1993 it had become clear that the Vance-Owen peace plan, proposed by the British politician Lord David Owen for the EC and Cyrus Vance for the UN, had failed. In January 1993, a new offensive had been launched by Croatia, across UNPROFOR lines, against the Serbian enclave of Krajina, leading to threats from the Serbian-dominated Federal Republic of Yugoslavia to intervene. Spasmodic fighting continued throughout the year, and in October UNPROFOR's mandate was renewed by the UN Security Council. Negotiations continued, however, and a bilateral accord between Croatia and Serbia was signed on January 19, 1994, pledging the restoration of communication and transport links between the two republics.
Nevertheless, Croatian Serbs still occupied about 30 per cent of Croatian territory, and President Slobodan Miloševiç of Serbia refused to include a mutual recognition clause in the agreement, which would have helped Croatia's efforts to reintegrate the Krajina region and the other SARs. Prospects for a peaceful settlement were made more remote by the elections, held later in January, for the presidency of the self-declared RSK, which resulted in the victory of Milan Martic, a close ally of Miloševiç totally opposed to reintegration. In March 1994 the Bosnian government, Bosnian Croats, and Croatia signed an agreement envisaging the creation of a new federation of Bosnian Muslims and Croats, with a long-term confederal arrangement with Croatia.
The tense stand-off between the Croats and the Croatian Serbs continued throughout 1994, held in place chiefly by the UNPROFOR troops acting as a buffer between Croatian forces and Serb-held areas. The so-called Z-4 peace plan presented by the EU, the United States, and Russian ambassadors in November proposed that the Serbs cede half the territory they controlled in Croatia to the Croatian government, in return for extensive regional autonomy in the Serb-dominated areas. However, both sides rejected this plan. In December an agreement between the Croatian government and the leaders of Serb-held Croatia was negotiated, aiming at the re-establishment of key services and reopening of key roads that crossed the enclaves.

Croat Re-conquest and Peace The uneasy peace in Croatia was threatened by Tudjman's announcement in January 1995 giving notice that the UNPROFOR's mandate in his country would be terminated on March 31, with UNPROFOR troops to leave by June. The Croatian government, under pressure from some 300,000 displaced Croats, feared the UNPROFOR presence was solidifying the Serbs' hold on Krajina and the other SARs. Tudjman finally agreed in March to let a much smaller UN force remain in Croatia on a six-month renewable mandate, but insisted that the name of the force be changed to reflect Croatia's independent status and that the number of troops occupying Croatia be reduced by almost two thirds. Then, in early May 1995, Croat forces crossed UN lines and attacked a Serb-held enclave in Western Slavonia; the Serbs immediately responded by bombing Zagreb. The Serbs were eventually forced to evacuate the region, giving the Croatian army a victory.
The amount of territory regained was small (about 500 sq km/193 sq mi out of 16,500 sq km/6,370 sq mi of Serb-held territory), but this was the largest Croatian offensive since 1991. It also enabled Croatia to establish full control over the vital E-70 highway from Zagreb to Belgrade, via Lipovac. However, the offensive, coming just days after the end of a four-month ceasefire in Bosnia and Herzegovina, sparked fears of a renewed region-wide conflict in the former Yugoslavia. Those fears increased during June and July as Bosnian Serb forces attacked, and finally overcame, the UN-guarded "safe havens" for Bosnian Muslims at Srebrenica and Zepa in Bosnia and Herzegovina. The attack then shifted to the Bihac safe haven. Croatian Serbs joined in the attack, and Croatian government troops also became involved in the defense of Bihac.
Subsequently, the Croatian government's objectives expanded, and its troops extended their involvement in Bosnia to regaining Krajina, the heartland of the Croatian Serbs' self-declared republic, the RSK. In August, after five days of fighting, Croatian government troops overran Krajina. In early November rebel Croatian Serbs in Eastern Slavonia, the most critical of the remaining rebel-held territories, agreed to an eventual reunion with Croatia; the move followed close on the heels of the October ceasefire agreed by Bosnian Serbs. The US government brokered the ceasefire, and also the peace accord agreed in Dayton, Ohio, by the Croatian, Bosnian, and Serbian governments on November 21, 1995. As its contribution to the accord, the Croatian government agreed to give the Bosnian Serbs access to the Adriatic Sea in exchange for Serbian-held areas around Dubrovnik; Zepa and Sbrenica would remain in Bosnian Serb hands. Under the agreement it was also agreed that Eastern Slavonia would be reintegrated with Croatia, but only from July 1997; in the interim it would be administered by the UN, which agreed to provide a peacekeeping force of up to 5,000 troops to supervise the area's demilitarization and the return of displaced Croats.
In August 1996 an agreement was signed with the Federal Republic of Yugoslavia regularizing relations between the two countries and allowing for the establishment of full diplomatic relations. In June 1997 Tudjman won a convincing victory in presidential elections, although on a very low turn-out of only 57 per cent. However, both the pre-election campaign and the poll were criticized by international parliamentary observers: the former for the virtual exclusion of Tudjman's opponents from the largely state-controlled media; the latter for the fact that many Serbs, particularly in Eastern Slavonia, found that they had been excluded from the electoral rolls. In November 1997 a number of constitutional changes proposed by Tudjman were adopted, including one forbidding attempts to recreate a federal Yugoslav state. On January 15, 1998, Eastern Slavonia, the last remaining Serb enclave in Croatia, was formally handed over to Croatian control.