"During this week, in the shortest possible period, the government will draw up a solution and send to the parliament so as to improve the status of citizens with loans denominated in the Swiss franc, and their status will not deteriorate," Milanovic promised during a ceremony of signing agreements on schemes to write-off debts of the poorest citizens whose accounts have been blocked due to their overdue liabilities up to 35,000 kuna towards state-run utilities in the cities of Zagreb, Split, Rijeka, and Osijek and/or state-run companies such as the power provider HEP or the Croatian Post and/or towards private companies such as telecoms and commercial banks.
"This is an urgent situation and there is mo room for long negotiations," Milanovic said.
This past Thursday, the Swiss National Bank scrapped a cap of 1.20 francs per euro, sending the franc skyrocketing against the euro by around 16%, to between 1 and 1.02 francs per euro.
According to the Croatian National Bank's exchange rate last Thursday, the kuna weakened from last Wednesday against most foreign currencies, registering the biggest drop, of 15.71 percent, in relation to the franc, whose exchange rate jumped to a record 7.4 kuna.
The Croatian central bank's data show that the total amount of loans pegged to the Swiss franc at the end of September 2014 was HRK 23.7 billion, with more than 92% being household loans, primarily housing loans.
The Franak association of holders of franc-tied loans has said that there are around 60,000 loans of this type in Croatia and that the continued appreciation of the Swiss national currency could affect the lives of between 200,000 and 300,000 people.
Following the latest developments, Croatian Finance Minister Boris Lalovac and bankers held an urgent meeting last Friday.
(Hina) ms