[JURIST] Croatian President Stjepan Mesic [official website; Wikipedia profile] said Monday that Croatia may cease to function as a state if the government returns property to Austrian citizens that had been confiscated by Yugoslav communists after World War II as planned. During WWII, the Ustasa regime [Wikipedia backgrounder], allied with the Nazi party, governed Croatia and hundreds of Jews, Serbs and Gypsies were deported to concentration camps. Yugoslavia's communist authorities expelled 60,000 Germans after 1945 and confiscated their property and many fled to Austria. The government on the weekend announced a deal with Vienna under which Germans who obtained Austrian citizenship after fleeing Yugoslavia had a right to file for the return of their property or get compensation. Yugoslavia had banned all foreigners from reclaiming the property but lifted the ban after gaining independence in 1991, when the country's constitutional court deemed it illegal to ban foreigners from reclaiming property. Mesic claims the deal with Austria was reached behind his back and the deal has also been denounced by Social Democratic Leader and former prime minister Ivica Racan [Wikipedia backgrounder], who has said that "[m]aking deals with Austria without tackling the issue of Croats who perished in concentration camps in Austria, Italy or Germany is morally and politically unacceptable." Croatia's government defended the agreement [Hina report], saying that the deal is based on a 1999 constitutional court decision [text] requiring the government to pay compensation to foreign citizens whose property had been confiscated. The deal needs to be approved by Parliament with a two-thirds majority. Reuters has more.