Conservatives Ahead in Inconclusive Croatia Election

Croatia's conservatives were poised to remain in power after winning a snap election, nearly complete results showed Monday, but will have to begin coalition talks to form a government after falling short of a majority.

The close result does little to dispel political uncertainty in the EU's newest member but the new conservative leader -- now likely to be prime minister -- has signalled a shift towards the center after a lurch to the right.

The conservative HDZ won 61 seats while their center-left opposition rivals, the Social Democrats (SDP), had 54, according to results from nearly all polling stations.

"I'm certain that we are the party that will have the privilege of forming the next stable Croatian government," HDZ's new moderate leader Andrej Plenkovic told supporters early Monday.

The election was the second in less than a year after the previous barely functioning coalition government led by the HDZ collapsed in June over a conflict of interest scandal after just five months in power.

However, the HDZ did not secure an absolute majority in the 151-seat parliament, and its former junior government partner, the Most Party ("Bridge" in Croatian), is likely to play kingmaker once again.

The Most Party came third with 13 seats.

Some 3.8 million Croatians were eligible to vote in the election, which came at a time of economic gloom and strained ties between neighbors in the volatile Balkans.

The previous HDZ-led coalition's five-month rule was marked by a shift to the right amid a growing climate of intolerance, including attacks on independent media and minorities, notably ethnic Serbs. 

Authorities appeared to have turned a blind eye to a far-right surge that sparked global concern and brought already frosty ties with former enemy Serbia to their lowest level since Croatia's 1990s independence war.

But the HDZ was aspiring to stay in power with the moderate Plenkovic who has pledged an "Europe-oriented" government.

The 46-year-old former member of the European Parliament has repeatedly vowed to move the party away from populism and extremism to position it in the center-right.

His SDP rival, former prime minister Zoran Milanovic, 49, told supporters in Zagreb early Monday that Croatia needed a "stable government."

"For the past months we had an unstable and destructive (one)," he stressed.

- Economic struggles -

Croatians may have lost enthusiasm for voting a second time in less than a year: by mid-afternoon turnout was some nine points down on November polls.

And the results suggest difficult talks loom on forming a government. 

With Plenkovic's moderate agenda, HDZ will likely win the backing of minorities, notably Serbs.

Despite pledging a "government of progress and tolerance", Milanovic sharpened his populist rhetoric during the campaign after disappointing voters with scant reforms when in power before the ill-fated HDZ coalition took control.

He repeatedly slammed Serbian Prime Minister Aleksandar Vucic over his ultranationalist wartime stance.

The almost year of political deadlock has blocked reforms the former Yugoslav republic badly needs as it emerges from a six-year recession.

The economy, relying heavily on tourism along the country's Adriatic coast, remains one of the EU's weakest despite some recent positive indicators attributed to membership of the bloc.

The central bank has forecast growth of 2.3 percent this year.

Unemployment stands at more than 13 percent, public debt has reached 85 percent of GDP, while the investment climate remains poor.