PM Milanovic hints at regulation allowing only kuna-pegged mortgages

Croatian Prime Minister Zoran Milanovic on Thursday said that his cabinet was mulling a bill that would allow mortgage loans tied only to the national currency kuna, and expressed hope that the parliament would on Friday unanimously adopt amendments to the Consumer Credit Act whereby the Swiss franc would be fixed at 6.39 kuna for a year.

"The draft amendments to the Consumer Credit Act have been sent to the Sabor and they will be voted in, I hope unanimously, tomorrow. Thus, we will settle a part of the problem for a year," Milanovic said.

However, we must not let things evolve in un uncontrolled manner, as it has been the case so far, and in the future we will work on making sure that housing loans are denominated in the kuna, and that the matter be regulated by law, the premier added.

He warned that Croatia was one of two or three countries in the world where monthly installments for mortgage loan holders kept rising and their property value kept falling.

He also reassured commercial banks that they would not be jeopardised but "they will also have to bear the burden of social responsibility".

(Hina) ms

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