Slovenia insists that the Croatian government withdraw authorisation to banks to sue the defunct Slovenian bank LB and its successor NLB over the Yugoslav-era savings deposits. The countries have namely agreed to take the issue to the Bank for International Settlements (BIS).

Pusić was upbeat ahead of the meeting that "a solution is quite close". She repeated that the Croatian government was willing to withdraw authorisation for legal proceedings against LB and NLB in Croatian courts, if "an alternative for the resolution of the problem is agreed with the Slovenian side".

Her comments came after it transpired that a Zagreb court ruled in favour of a Croatian bank that sued LB NLB in a ruling that is yet to become final. The case is one of 30 lawsuits brought against LB and NLB over foreign currency deposits of LB's Croatian clients which were made into Croatia's public debt.

Commenting on her counterpart's optimism, Erjavec said on Monday that for Slovenia the solution would be very close when Croatia withdraws its authorisation for lawsuits against the Slovenian banks, which is Slovenia's condition for ratification of Croatia's EU Accession Treaty.

Erjavec announced that he and Pusić would exchange views as to how to solve the matter and create the conditions so that the National Assembly could ratify Croatia's treaty at the session in early March.

According to him, the pair should also agree on another meeting together with the financial experts appointed by the two governments so as to find technical solutions.

Slovenia's France Arhar and Croatia's Zdravko Rogić last met on 4 December 2012 for the fourth round of talks since they were appointed in August 2012.

Erjavec and Pusić are meeting on the eve of the EU foreign ministers' session. They are expected to make a statement following the meeting at around 9 PM.