Croatia reaches bank deal with Slovenia to unblock EU accession

By bne IntelliNews March 8, 2013

bne -

Croatia has finally clinched a deal with Slovenia over the 20-year-old banking dispute that has been threatening its accession to the European Union. The agreement should allow Croatia to join the bloc on July 1 as scheduled, Croatian Prime Minister Zoran Milanovic said on March 7.

A memorandum of understanding was signed in Zagreb by Croatian Foreign Minister Vesna Pusic and Slovenian State Secretary Tone Kajzer. A final agreement will be signed on March 11. "The text of the memorandum has been agreed and I and (Slovenian Prime Minister Janez) Jansa will sign it on Monday," Milanovic told a cabinet session.

Under the new agreement the Croatian government will suspend all legal proceedings outstanding against the Slovene bank. In return, Ljubljana has vowed to ratify the accession treaty. Jansa said the Slovene parliament would be able to carry that out "within 30 days" after signing the memorandum, reports Reuters

Croatia concluded its EU accession talks in 2011 but all 27 states need to ratify Croatia's the treaty. The country's schedule for joining has been under threat from Slovenia, which has been holding back its signature due to a complicated banking dispute dating back to the collapse of Yugoslavia in the early 1990s.

Ljubljanska Banka was a strong brand across Yugoslavia, but as that country unravelled, the bank swiftly pulled out of Croatia, giving depositors only a brief window to claim their cash. More than 130,000 Croatians, as well as many Bosnians, saw their savings locked in Slovenia - to the tune of €178m.

As a result, many launched legal proceedings against Ljubljanska and its legal successor, Nova Ljubljanska Banka (NLB). Zagreb has now agreed to halt a legal suit seeking reimbursement from Ljubljana which is before its local courts. Further talks between Croatia and Slovenia on Ljubljanska Banka will be held under the auspices of the Swiss-based Bank for International Settlement, Pusic said.

European Commissioner for Enlargement and European Neighbourhood Policy Stefan Fule welcomed the news that a mutually acceptable solution to the Ljubljanska Banka issue has been found. "I consider this to be a good deal for both countries and good deal for enlargement. This is also a very good example how joint efforts in the area of good neighbourly relations bring benefits for both sides and provide basis to solve open issues. It is the culmination of intense efforts by both countries. We congratulate Slovenia and Croatia on their commitment and willingness to find a solution. We are now looking forward to the formal adoption of the agreement."

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