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By Igor Ilic ZAGREB (Reuters) - Croatia's opposition Social Democrats took a narrow lead on Sunday in a close national election, according to exit polls, after a campaign fought over corruption, the economy and future European Union membership. The Social Democratic Party (SDP) had 34.5 percent of the votes and the ruling conservative Croatian Democratic Union (HDZ) 32.8 percent, according to exit polls broadcast by state television after voting ended. The difference between the two parties was too small to ensure a comfortable majority. The main issues in the election were corruption, economic growth and reforms needed to take the country into the European Union. Both parties have reformist, pro-EU agendas, with the SDP being more insistent on a strong state role in the economy. If the results were borne out, the SDP would have 61 seats in parliament and would have to forge an alliance with small liberal parties. The HDZ would have 57 seats but it can count on traditional support from Croats living abroad, mostly in Bosnia, for a few extra seats in parliament. The number of seats in the single-chamber assembly varies between 150 and 160, depending on turnout among minorities and expatriates. "The (exit poll) results are in line with our expectations and we are pleased. We are not afraid that the diaspora votes could swing the outcome," said the SDP's candidate for prime minister, former Economy Minister Ljubo Jurcic. First preliminary results were expected at 6:00 p.m. EDT. Turnout by 2:00 p.m. EDT was 48 percent. Financial markets expect little impact from the election as the country's political and economic agenda is in practice dictated by EU membership talks, which Zagreb opened in 2005. The country needs to reform its inefficient judiciary and bloated public administration, crack down on corruption and cut subsidies to indebted state firms, particularly shipyards, to prepare for competition within the EU.
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