Croatia's conservative opposition wins a narrow presidential victory, capitalising on popular discontent over economic decline. Rough cut (no reporter narration).
ROUGH CUT NO REPORTER NARRATION Croatia's conservative opposition won a narrow presidential victory on Sunday (January 11), capitalising on popular discontent over economic decline and setting down a marker for parliamentary elections later in the year. Kolinda Grabar-Kitarovic, a former diplomat, can expect months of tense cohabitation with the Social Democrat-led government before Croats vote again in the general election due in late 2015. The job is largely ceremonial, but her win may signal a comeback for the opposition HDZ. With 99.3 percent of votes counted, Grabar-Kitarovic was ahead by the thinnest of margins -- 50.40 percent to 49.60 percent for incumbent Ivo Josipovic. In Croatia, the president cannot veto laws but has a say in foreign policy and defence. After six years of recession, unemployment is running at 19 percent in the ex-Yugoslav republic of 4.4 million people, which joined the European Union last July. High taxes and poor administration hamper business and the economy is not expected to grow in 2015.