Luxembourg/Brussels, 14/09/2015 (Agence Europe) - On Saturday 12 September, Austria criticised the Croatian government's desire to convert 55,000 mortgages and consumer loans from Swiss francs to euros.
“I am trying to get some information. What is the actual situation?” said Austrian finance minister Hans Jörg Schelling at the Ecofin Council in Luxembourg on Saturday 12 September, adding that he had written an official letter to the Croatian authorities. He said: “It's an unfair action and we will fight agaist this unfair action.”
The Croatian government's approach, which has not yet been endorsed by the country's parliament, aims to ease pressure on Croatian households, who are finding it disfficult to meet rising mortgage and lending costs due to the appreciation of the Swiss franc against the Croatian crown. The Croatian crown has a fixed exchange rate against the euro so converting loans into euros would have the advantage of keeping down the cost of debt repayment.
This measure could potentially apply in October, but it would lead to several million euros worth of losses for savings banks Erste, UniCredit and Raiffeisen, which have a strong presence on the Croatian market. The Croatian central bank says the banks would lose much more than the initially estimated almost €800 million. The banks in question would receive partial compensation though tax deductions, but they feel that the Croatian government's move infringes European law and bilateral investment treaties between Croatia and the countries of origin of the banks in question.
General elections will take place in Croatia soon, probably in November. (Mathieu Bion)