Prime Minister Zoran Milanovic said in the northern Croatian city of Cakovec that the government had been working on the new law on loans pegged to the Swiss franc which will convert loans denominated in the Swiss currency to euros and thus "once and for all resolve the problem of those loans".
He recalled that the government had been dealing with this problem for the past two years, first by reducing the interest rate and than by freezing the Swiss franc.
Irresponsible behaviour and laziness of previous administrations has led to the situation that put a number of Croatian citizens in difficulty, Milanovic said during his visit to Medjimurje County.
Milanovic underscored that while drafting the bill, the government took into account numerous details because it wanted to help Croatian citizens to be able to turn to the future. "We want to resolve the problem of loans pegged to the Swiss franc once and for all," Milanovic said, adding he did not fear the reaction of banks. Banks will lose some but they will also gain some through tax relief, he stressed.
"The government is leading Croatia and not banks and even though banks will not make profit on this, they will transfer funds into something else, such as state bonds," Milanovic told the press when asked how the financial sector will react to the new law.
He stressed the new law is aimed at helping citizens and not at showing muscles to banks.
The media reported earlier today that the government was preparing a bill on the conversion of all loans pegged to the Swiss franc into euros, with a write-off of a share of the principal. It is estimated that more than 55,000 Croatia families have loans denominated in Swiss francs. These loans will be converted to euros with interest rates in force for euro-pegged loans on the day the loans were taken. The difference in the conversion between euros and francs would be written off from the principal. The losses will be covered by banks but the state would compensate them through tax reliefs.
(Text: Hina)
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