Third-strongest party mulls coalition demands after Croatia election deadlock

An alliance that finished third in Croatia's elections was drafting its demands Tuesday for negotiations with the ruling conservatives and the rival Social Democrats, both of whom are trying to form the next government.

Prime Minister Ivo Sanader's Croatian Democratic Union, or HDZ, finished first in Sunday's election but failed to secure the 77 seats necessary for a majority in parliament.

The new government will have to carry out further reforms to achieve Croatia's goal of joining the European Union in 2010 — as well as stimulate the economy, tackle corruption and improve living standards.

The election deadlock left the alliance of the Peasants Party and the Liberals holding the potential balance of power. Its leaders said Tuesday they would meet with Sanader first.

Both the HDZ and Social Democrats, scrambling to woo allies, insist they are in position to form a governing coalition.

President Stipe Mesic said he would give a mandate to the party that confirms it has majority in parliament.

Sanader's HDZ won 61 seats and also has the support of five deputies representing Croats living abroad.

The Social Democrats, or SDP, won 56 seats and claimed to have the support of two small parties, which would give them the support of a total of 67 deputies.

The Liberal-Peasants Party alliance elected eight deputies and could join a coalition government. Twelve lawmakers from several smaller parties could also be king-makers.

The alliance said its support would be granted in return for commitments on farming and regional development issues.

Observers argue Sanader could offer the alliance at least three Cabinet posts — trumping the SDP, which would have to cater to other allies, as well, to gain a majority in Parliament.

The postelection negotiations could last for days.

The HDZ, then a staunch nationalist party, ruled for a decade until 2000, when the Social Democrats took power on a pro-EU platform. The HDZ returned in 2003, but now is favors EU accession.