Croatia’s Patriotic Coalition, led by the opposition Croatian Democratic Union (HDZ), and reformist Most party have proposed businessman Tihomir Oreskovic as prime minister designate.

The move will put an end to the political deadlock in the country which has lasted for more than six weeks and could have put at risk Croatia’s fragile economic recovery had it not been resolved. The Adriatic country is expected to post economic growth in 2015 after six consecutive years of contraction.

The agreement between the Patriotic Coalition and Most, which was in kingmaker position after the November 8 general elections, was struck after weeks of negotiations and turnarounds in the talks on the forming of the new government.

Most, a grouping of independents, has been pushing for a national unity government made up of the three main groups in the new parliament, but neither HDZ nor its main rival the ruling Social Democratic Party (SDP) favoured this option. The party has also proposed nominating a technocratic prime minister.

The party was initially close to striking a deal with first the HDZ then the SDP, before eventually striking a deal on December 22.

"We have made a great choice. In the next month, we will solve everything. I believe it is in everyone's interests to have as the prime minister a person with the greatest potential. If the other side proposes qualified people for positions in government, we will accept them", Most leader Bozo Petrov said, according to Total Croatia News.

"Our conversations will continue, we have agreed that the expertise of candidates will be key. There is no time for experiments and bad decisions. We will follow a reform path,” HDZ leader Tomislav Karamarko said.

Oreskovic, born in 1966, is a senior manager at international pharma company Teva Pharmaceutical Industries. Prior to this, he was of CEO of Croatia’s Pliva, part of Teva group. His cabinet is likely to be made up of HDZ and Most members.

Croatia’s elections ended inconclusively as neither the Patriotic Coalition, nor the Croatia is Growing coalition led by the SDP, managed to secure enough seats in the parliament to form a majority. As a result, both parties needed the support of Most, which came third, to form a government.

The Patriotic Coalition won the largest number of seats - 59 - while the Croatia is Growing coalition won 56 seats in the 151 seat parliament. Most won 19 seats, but internal disagreements led to the party losing three.

The new prime minister and his government will have the difficult task of helping the country reduce its deficit and public debt which is close to 90% of GDP. Croatia entered the EU’s excessive deficit procedure (EDP) in January 2014 and in under pressure to reduce the shortfall which is seen at around 5% of GDP this year.

The Croatian economy expanded by 2.8% y/y in the third quarter of the year, registering the fourth consecutive quarter of growth. In Q3, growth exceeded analysts’ expectations and recorded the strongest performance since the third quarter of 2008.