MOST and HDZ Differ in Their Approach to Conversion of Swiss Franc Loans

Total Croatia News

The issue of possible lawsuits by banks against Croatia due to forced conversion of Swiss franc loans into euros could become an obstacle in political negotiations between HDZ and MOST.

Leaders of HDZ and MOST, Andrej Plenković and Božo Petrov, have not yet discussed the issue of conversion of loans in Swiss francs into euros in negotiations about the formation of a new government, reports on September 29, 2016.

According to the media, MOST and HDZ are not in complete agreement about the conversion. Unicredit, owner of Zagrebačka Banka, initiated proceedings against Croatia at an arbitration court in Washington and will demand the government to cover the costs of the conversion. It is expected that Unicredit will be followed by other banks and that the total amount of sought damages will be around 7.6 billion kuna.

“It is important to protect the state”, HDZ president Plenković said briefly on the issue on Tuesday.

Finance Minister Zdravko Marić was somewhat more specific in his reply and said that the state must protect its interests, but it would be good to reach an agreement in order to avoid the costs of arbitration. Asked if HDZ and MOST had agreed their positions about the conversion, Marić said he thought they had. Marić said on Wednesday that the government would send by the end of the week a letter to the European Commission about conversion and reiterated that he would be happy to make a deal with banks.

The media reported this week that the conversion issue could be a problem for HDZ, just like the case of conflict of interest with regards to INA brought down former HDZ president Tomislav Karamarko.

MOST gave a statement on the issue. “From statements in media, we know that our potential partners want to talk with the banks. We are not against the talks, but we believe that the state in this case must be very firm. Banks which could be involved in potential proceedings are operating in Croatia and they should keep that in mind. As for possible differences of opinion between us and our potential partners, we are ready to listen to all the arguments and then come to the best solution”, said MOST which added that the conversion was an important topic that would be on the agenda of negotiations between HDZ and MOST.

As for the solution for the issue, MOST believes that the government should consult legal and financial experts. “At this point, we do not believe there is room for compromise and there is quite a good chance that the dispute will be solved at competent institutions. MOST leader Božo Petrov held a meeting with members of the Franak Association. We will consult other experts as well. Our position is that the state should use all available mechanisms to protect its interests, which are, of course, also the interests of our citizens”, concluded MOST.


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