President Franjo Tudjman consolidated his control over the media after landslide presidential elections in June which ensured his ruling party's hold over the appointment of executives and editors in the state-dominated media. Some visible gestures of conciliation to the media such as granting independent Radio 101.2 FM a long-term license after prolonged resistance, mixed with the president's new legal restrictions added uncertainty to Croatia's outlook for press freedom.

Croatia was admitted into the Council of Europe in November 1996 on a one-year conditional basis. European leaders linked Croatia's full membership to its progress in various human rights areas, including conditions for press freedom. After the trial year ended in October, the United States demanded that Croatia's membership in the council be suspended due to human rights concerns, including continued harassment of the independent press. Despite the U.S. government's lobbying effort, Croatia obtained full membership in November. The largest state-owned newspapers and Croatian radio and television remained under the control of the ruling Croatian Democratic Union, causing Council of Europe officials to voice concern after a summit in Strasbourg on October 11.

The international community's protests, as well as a pending International Monetary Fund loan tranche, no doubt motivated President Tudjman to take a number of steps to polish his image. In addition to hastily rounding up war crime suspects and turning them over to the Hague Tribunal, the president backed away from direct suppression of the leading independent media outlets. While granted only a temporary license to operate until October 31, managers of the popular Radio 101.2 FM, whose closure sparked mass demonstrations last year, finally received a long-term license on November 4 – achieved through complex financial negotiations with municipal authorities.

Some two dozen prominent reporters from the state-run HTV television and radio company formed an association, called Forum 21, to press for reforms within the public television network. The journalists called for greater editorial freedom and balance of political viewpoints on national television. Although it is unclear whether the initiative will reap any results, the establishment of Forum 21 was notable because it represented a call for change from inside Croatian state television, which remains the chief source of news for most Croatians.

The satirical weekly Feral Tribune suffered its most severe threats in years, with several police raids in May and anonymous death threats to editor in chief Viktor Ivancic in September after he ran the confessions of a wanted war criminal in the Split-based newspaper. In May, Ivancic and co-defendant Marinko Culic were informed that their September 1996 acquittal on charges of insulting President Tudjman had been overturned. The state vowed to prosecute them once more at a court hearing on October 20. CPJ chose Ivancic as one of its International Press Freedom awardees, and he accepted the award at the October 23 ceremony in New York. A judge officially granted Ivancic permission to postpone his court appearance until after the ceremony, but ruled that his co-defendant had to be present. Once again, the court postponed the hearing until December 22.

At that hearing, lawyers for Feral Tribune discussed the contents of the article that prosecutors claimed had defamed President Tudjman by comparing his plan to bury the bones of Croatian fascists alongside their victims at the site of a World War II death camp to a similar plan by the late Spanish dictator, General Francisco Franco. The judge ruled that his lack of expertise in the policies of the late Spanish ruler would require him to call an expert witness of his own by petitioning the Spanish Justice Ministry for their expert legal assessment. He adjourned the trial until the court received a response from the Spanish government. A final resolution of the seditious libel case against Feral Tribune will likely face a long delay.

The farcical resolution bodes better for Croatia's judiciary than for the newspaper which sought an acquittal as a legal precedent for future seditious libel cases against journalists. It underscores the need for Croatia to eliminate all statutes in its penal code that criminalize criticism and satire of public officials as inconsistent with the country's professed desire to integrate with the West. Feral Tribune, and other independent newspapers, such as Globus, also face hundreds of civil libel cases, filed primarily by public figures to pressure them to refrain from pursuing journalistic investigations. Lawsuits, such as one filed by President Tudjman's daughter, Nevenka, against Feral Tribune, for damages worth about US$560,000, often aim to deal a crushing financial blow on independent publications.

On October 1, Croatia adopted a revised penal code that would allow the prosecution of journalists for reports considered "insulting" even if factually correct, which would take effect in January. "Journalists will have to prove their intention was to inform the public in good faith and objectively and not to insult or slander," said Zeljko Horvat, a government legal advisor who is one of the new code's authors. While technically consistent with the judgments of the European Court of Human Rights, Croatian journalists feared that in Croatia's repressive climate, the code could be used to prosecute them.

As with other countries in the region known for curbing press freedom, while taking away journalists' liberties with one hand, the state feigned concern about their attackers by making it a crime for anyone to deny the right to freedom of speech and the press or to refuse to divulge unclassified official information – offenses that are extremely difficult to investigate and prosecute.

Domestic and foreign criticism of Croatia's press freedom record also apparently prompted Tudjman to invite two leading professional journalists back to Croatia from Parisian exile. Goran Milic, a Serb and former prime-time news editor at Yugoslav Radio Television before the war, who worked as the Paris correspondent for the official daily Vjesnik, was appointed to head HRT. Branko Salaj, a respected Croatian emigre journalist, was serving as Croatia's envoy to France when he was called back to head HINA, the Croatian state news agency.

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