Ivan Šubašić

In August 1939, Maček and Yugoslav Prime Minister Dragiša Cvetković reached the deal about the constitutional reconstruction of Yugoslavia and restoration of Croatian statehood in the form of Banovina of Croatia—an autonomous entity which, together with Croatia proper, included large sections of today's Bosnia-Herzegovina and some sections of today's Vojvodina, which contained an ethnic Croat majority. Šubašić was appointed as the first ban, or titular head of this entity, in charge of its government.

The Banovina came to an end together with Kingdom of Yugoslavia, following the invasion by Axis powers in April 1941. Šubašić joined Dušan Simović and his Yugoslav government-in-exile.

In emigration, Šubašić first represented the Yugoslav royal government in the United States. Gradually, the widening gap between the royalist government and Yugoslav major resistance movement embodied in Tito and his Communist-dominated Partisans forced Winston Churchill to mediate. Šubašić, a non-Communist Croat, was appointed as the new prime minister[3] in order to reach a compromise between Tito—whose forces represented the de facto government on liberated territories—and the monarchy, which preferred Draža Mihailović and his Serb-dominated Chetniks.

After publicly rejecting Mihailović, Šubašić met with Tito on the island of Vis and signed the Tito–Šubašić agreement, which recognised the Partisans as the legitimate armed forces of Yugoslavia in exchange for Partisans formally recognising and taking part in the new government. Šubašić kept his post until 7 March 1945, when Tito formally became the prime minister of Yugoslavia. Šubašić was foreign minister in his cabinet until October, when he resigned, disagreeing with Communist policies of new government.