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.

She told her supporters: "There is no room for triumphalism ... Let's work for the prosperity of our country." In Croatia, the president cannot veto laws but has a say in foreign policy and defense.

After six years of recession, unemployment is running at 19 percent in the 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. "I expect a certain shift in foreign policy, with a little more focus on NATO and the EU and a little less on the (Balkan) region," said Andjelko Milardovic of the Institute for Migrations, a Zagreb-based think-tank, adding the result was a pointer to the parliamentary election.

Josipovic, who was seeking a second five-year term with the support of the increasingly unpopular ruling Social Democrats, won the first round of the election on Dec. 28 by a narrow margin. Grabar-Kitarovic, 46, a former foreign minister and ambassador to Washington, campaigned on the need for a change of course and a more active head of state to help the country overcome its worst economic crisis since independence in 1991. She takes office as Croatia's first woman president on Feb. 19.

As for relations with Slovenia, the general perception in the past was that the current political problems will be easier solved with the left political option in Croatia, but in practice that didn't happen. Majority of strategic open issues, especially borders, were solved when the PM of Croatia was also conservative Jadranka Kosor which established very "close" personal relationship with the then Slovenian PM Borut Pahor. The basic question now is the "charm" of the now Slovenian President Borut Pahor will also work on a new Croatian President Kolinda Grabar Kitarović?