Finance Minister doesn't expect sanctions because of CHF pegged loans

Responding to reporters after the government session, Lalovac reiterated that at Tuesday's meeting of European Union finance minister (ECOFIN), he said, "I clearly said that had Croatia been in the European Union ten years ago the case of the Swiss franc loans would not have been possible as directives on consumer protection would have banned them," underscoring that he did not hear any counterargument from either the EC or Austria's finance minister.

 

"We gave the banks two years for social criteria they are referring to and they could have defined them themselves, but didn't. That clearly says that the government has much stronger arguments and we are talking only with arguments. When we get a response to our arguments, you will have a clearer picture of what the Commission thinks about that issue," he said.

 

He added that the EC announced that it would continue with its analysis of Croatia's solution to CHF loans - their conversion into euros - which means "there won't be any sanctions for now or additional procedures, and we will continue fighting with arguments." He said that he did not expect the matter to be referred to the Council of Ministers. "They very quickly closed the matter and said that they see two opposing sides, Croatia and Austria, and that they expect the EC's analysis."

 

Asked what if the Constitutional Court were to quash the law on the conversion after three banks had requested an assessment of their constitutionality, Lalovac said, "We've come up with the law and I hope that it will bring an independent ruling but what is important is that banks have already prepared conversions and that's the most important thing for citizens."

 

If banks don't adhere to the conversion law, the sanctions will amount to millions and the banks are aware of this, he said, convinced that banks would not withdraw from the Croatian market and that everything would work out in the end and that banks will respect the law.

 

On Tuesday, Lalovac attended a meeting of the European Union's Economic and Financial Affairs Council (ECOFIN) in Luxembourg, and during a working dinner, before the formal part of the meeting, the European Commissioner for Financial Stability and Capital Market, Jonathan Hill, presented the European Commission's view on Croatian legislation on the conversion of CHF-pegged loans into euro-pegged ones. Later, Commissioner Hill was not available for comments to the press.

 

"The European Commission's view on the Croatian legal solution on the conversion of Swiss franc-denominated loans into euro-fixed loans is close to the view of the Croatian Banking Association (HUB), and Croatia expects the Commission to eventually take the side of Croatian borrowers," Lalovac said after that meeting.

(Text: Hina)