The Slovenia Times

Croatia Proposes LB Issue Be Taken Back to Basel


"This time we would send the proposal together, Croatia and Slovenia. I believe we have an opportunity," Croatian Foreign Minister Vesna Pusić told Croatia's commercial news radio Media servis today.

While willing to negotiate and discuss all possible solutions to the issue, Pusić stressed that "we will stick to the point...that any solution to the LB issue does not and cannot have any connection to the ratification of Croatian EU Accession Treaty in the Slovenian parliament".

She also expressed hope that the two countries would succeed in tackling the issue without interference from the EU of or the US. "But everybody knows everything about it at this point, and if necessary we will ask for help."

Croatia's motion is similar to that of former Croatian Finance Minister Ivan Šuker, who sent a request to BIS in 2010 expressing Croatia's willingness to continue LB negotiations within the succession framework.

The Slovenian embassy in Zagreb responded to Croatia's official proposal, expressing Slovenia's expectation that Croatia honour its commitments.

According to the embassy, Šuker's letter "already contains a clear commitment by Croatia to continue negotiations at BIS in the matter of guarantees for foreign currency deposits of former SFRY [Yugoslavia]".

Slovenia understands Croatia's proposal as a reaffirmation of readiness to solve the LB issue under the auspices of BIS, the embassy moreover said.

The LB issue stems from the 1990s as LB went bankrupt after the breakup of former Yugoslavia. In Croatia, some 132,000 savers claim over EUR 178m from the bank including interest. But Croatian companies are estimated to owe LB over EUR 800m.

Slovenia's position on the LB issue has always been that it was a matter of succession talks, a principle that Croatia accepted in 2010 following negotiation between prime ministers Borut Pahor and Jadranka Kosor.

Slovenia and Croatia agreed to resolve the issue at BIS as part of the succession process, but Croatia's new government resumed Croatia's former position that LB savings are a bilateral issue.

In line with that position the Croatian government decided on 19 April this year to support two Zagreb-based banks in their lawsuits against LB and its offshoot, Slovenia's biggest bank NLB.

Following pressure from Brussels and Slovenia, Croatia backtracked on the decision a few days later, and the two countries agreed to appoint two financial experts to tackle the issue.

Slovenia's former central bank governor France Arhar and Croatia's former central bank vice governor Zdravko Rogić were appointed in July by their respective governments in line with the agreement between both foreign ministers.

Arhar and Rogić held two meetings on the topic so far. Their next meeting is scheduled for Thursday.


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