The Slovenia Times

Arhar and Rogić Examine Past Developments in LB Issue


Arhar and Rogić, who were appointed in July by their respective governments, told the press after what was the first meeting of the task force that they expected to find a solution that would satisfy both sides. They stressed that this was a very complicated issue that has been burdening Slovenian-Croatian relations for more than 20 years.

The two experts, who already cooperated in different matters in the past, expect to put forward their proposed solutions to the respective governments as soon as possible. They did not wish to speculate on the time frame.

The term of Arhar, who is a former governor of Slovenia's central bank, expires at the end of the year, while Rogić, former Croatian central bank vice governor, was appointed for an indefinite term.

Rogić expressed confidence today that the matter will be resolved, since both demonstrated readiness for a solution that will be acceptable for both sides.

LB went bankrupt after the breakup of former Yugoslavia and a number of Croatian clients of the bank at LB's Zagreb branch lost over EUR 178m, including interest. But on the other hand, Croatian companies are estimated to owe LB over EUR 800m.

Slovenia maintains that the deposits should be covered by Croatia in line with a territorial principle of bank guarantees applied to the Yugoslavia's break-up. But Croatia argues that Slovenia should see to the debt because LB was a Slovenian bank.

Arhar pointed out today that it was in fact the foreign currency issue that led to a collapse in Yugoslavia in 1983. "It is our interest that the role of the rule of law is demonstrated," he stressed.

While Rogić agreed with this, he said that the LB issue involved claims as well as debt and repeated that Croatia insisted on the acknowledgement of the commitments the core bank has to the subsidiary.

Arhar added that private law was only one side of the coin in the case, as one needed to take into account that the countries in the territory of the former Yugoslavia, which shared a single act on foreign currency, did not come about on the basis of a consensus.

In line with international private law, foreign currency legislation is part of so called compulsory legislation. If a subject of public international law emerges without a consensus, "short circuits" only seem logical, Arhar explained, expressing his view that this was a succession issue.

Rogić meanwhile pointed to the 2010 agreement between the prime ministers at the time, Borut Pahor and Jadranka Kosor, that "the issue be resolved on a multilateral level". "I hope this is also possible," he said.

Rogić added that the covering of deposits had been secured by the guarantees of the joint state. The question now is how these guarantees will be divided up, he said.

Arhar moreover said that citizens had had no influence on private law relations and on what was happening at the level of countries. He stressed that this case was not one of its kind and that similar cases in the world have already been analysed.


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