By 1994, as Croatia rapidly developed into a de facto war economy, the military consumed as much as 60 percent of total government spending.
The remaining part of former Republic of Serbian Krajina, areas adjacent to FR Yugoslavia, negotiated a peaceful reintegration process with the Croatian Government.
The so-called Erdut Agreement made the area a temporary protectorate of the United Nations Transitional Administration for Eastern Slavonia, Baranja and Western Sirmium.
Tuđman died in 1999 and in the early 2000 parliamentary elections, the nationalist Croatian Democratic Union (HDZ) government was replaced by a center-left coalition, with Ivica Račan as prime minister.
Economic growth in the 2000s was stimulated by a credit boom led by newly privatized banks, capital investment, especially in road construction, a rebound in tourism and credit-driven consumer spending.
Račan's government was undermined by right wing HDZ who organized mass opposition rallies against Croatian collaboration with ICTY.
[17] In late 2003, new parliamentary elections were held and a reformed HDZ party won under leadership of Ivo Sanader, who became prime minister.
[16] After some delay caused by controversy over extradition of army generals to the ICTY, in 2004 the European Commission finally issued a recommendation that the accession negotiations with Croatia should begin.
Its report on Croatia described it as a modern democratic society with a competent economy and the ability to take on further obligations, provided it continued the reform process.
Actual negotiations began after the capture of general Ante Gotovina in December 2005, which resolved outstanding issues with the ICTY in the Hague.
[18][17] Numerous other complications also stalled the negotiating process, most notably during Slovenia's blockade of Croatia's EU accession from December 2008 until September 2009.
[20] A mob beating at a bus stop in the high-traffic Većeslav Holjevac Avenue ensued, with deadly consequences for 18-year-old Luka Ritz.
Therefore, Bieber concludes, it turned out that pro-European reforms which Sanader had initiated created institutions such as USKOK which eventually sentenced him and played a prominent role in his downfall.
Kosor continued with her predecessor's policy of integration into European Union[16] She also had to introduce austerity measures to counter the consequences of 2008 economic crisis and launched the anti-corruption campaign aimed at public officials.
In June 2010, Kosor proposed loosening the labor law and making it more business friendly, in order to foster economic growth.
[31] The Croatian Parliament could not decide conclusively whether this rendered the referendum proposal moot or not, and instead passed the judgement on to the Constitutional Court of Croatia.
[38] The protests brought together diverse political persuasions in response to recent government corruption scandals and worries regarding upcoming EU accession, and called for the resignation of Kosor and early elections.
[45] The Milanović cabinet endured a major change when the first deputy prime minister Radimir Čačić resigned in November 2012, having been convicted of vehicular manslaughter in Hungary.
[47] Following the successful ratification of its accession treaty in all existing EU member states, Croatia joined the European Union on 1 July 2013.
The referendum question was Do you define marriage as a union between a man and a woman, 65% of Croats voted yes, however, with a significantly low turnout of only 38% of eligible voters.
[51] The sixth presidential election since independence took place in 2014 and 2015, with a first round held on 28 December 2014 between four candidates: the incumbent Ivo Josipović in office since 2010 and supported by the ruling coalition, former foreign minister and NATO official Kolinda Grabar-Kitarović nominated by the opposition HDZ, Živi zid activist Ivan Sinčić and right-wing populist Milan Kujundžić.
[54] The refugee crisis and immigration also, for the first time in Croatia's history, became a subject of political debate during the next Croatian parliamentary election in 2015.
[56] Five months after taking the office, Prime Minister Orešković lost a parliamentary confidence vote, meaning his government fell.
[58] In October 2016, Croatian Democratic Union (HDZ) leader Andrej Plenković became new prime minister succeeding Tihomir Orešković.
On 12 October 2020 right wing extremist Danijel Bezuk attempted an attack on a Croatian government building and wounded a police officer in the process, after which he committed suicide.
He defeated the first female President of Croatia, center-right incumbent Kolinda Grabar-Kitarović of the ruling Croatian Democratic Union (HDZ).
[62] The centre-right governing party HDZ won the parliamentary election in July 2020, meaning incumbent Prime Minister Andrej Plenković would serve a second term.
[63] On 12 October 2020 right wing extremist Danijel Bezuk attempted an attack on building of Croatian government and wounded a police officer in the process, after which he committed suicide.
Banovina, one of the less developed regions of Croatia was shaken by 6.4 M earthquake which killed several people and completely destroyed the town of Petrinja.
[68] On 26 July 2022, Croatian authorities officially opened Pelješac Bridge, thus connecting southernmost part of Croatia with the rest of the country.