The European Commission has rejected Slovenia's request to mediate in its dispute with Croatia about the issue of transferred savings of Croatian nationals in the now-defunct Ljubljanska Banka, Slovenian media reported on Friday.

In April, Prime Minister Miro Cerar sent a letter to the Commission’s President Jean-Claude Juncker and Vice-President Frans Timmermans asking them to mediate in the row between Slovenia and Croatia about transferred savings which Croatian nationals had held in the Zagreb branch of the former Ljubljanska Banka before the dissolution of Yugoslavia in the early 1990s.

In an issue which still burdens the Croatia-Slovenia relations almost three decades later, several court proceedings are still under way before Croatian courts on the matter.

Slovenia’s Finance Minister, Mateja Vranicar-Erman, was quoted by the Ljubljana-based Dnevnik daily as saying that the European Commission had informed Ljubljana that it did not believe that its mediation could help solve the problem.

The Slovenian government insisted in June that by allowing proceedings to continue at its courts, Croatia is acting against the bilaterally agreed solution to the problem in the 2013 Mokrice Memorandum, signed by signed before Croatia’s accession to the EU by then Prime Ministers, Zoran Milanovic of Croatia, and Janez Jansa of Slovenia..

The European Court of Human Rights had ruled in 2014 that Slovenia must reimburse the clients of the defunct Ljubljanska Banka. The bank had not repaid the savings of some 300,000 clients across former Yugoslavia after its branches have closed in 1991, with its total debt to former clients amounting to some €385 million.

According to Slovenia, the debt belongs to the old, liquidated, Ljubljanska Banka, and its successor, the present-day state-owned Nova Ljubljanska Banka (NLB), is not obligated to take on the debt.

The 2014 ruling does not refer to the savings transferred from the old bank into deposits of NLB, but the opinion of the Croatia’s Supreme Court is that the NLB is the universal legal successor of the Ljubljanska Banka, a ruling disputed by Slovenia.

According to reports, the outgoing Cerar government is now considering a law to protect NLB, against any potentially damaging outcome of the lawsuits by Ljubljanska Banka’s former clients in Croatia.

However, the Slovenian media also speculated that the Slovenian government’s decision to raise this issue in Brussels might have an ulterior motive, possibly as an attempt to postpone the privatisation of NLB, which was demanded by the European Commission.

“Slovenian tax payers will pay a high price for the delay in the sale of NLB, Slovenia’s biggest bank, which must be sold under bail-out conditions of the European Commission,” the Delo newspaper commented on Friday.

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