Members of parliament on Tuesday welcomed a set of four bills designed to 'strengthen the financial system' in Croatia, banks' resilience to possible shocks and deposit insurance.

The bills, which concern the banking system and deposit insurance, are being aligned with EU regulations and they include amendments to the laws on credit institutions and the resolution of credit institutions and investment companies, as well as the law on deposit insurance.

The bills are geared towards further developing the financial market and enhancing household deposit security and making it possible to predict and deal with a situation when a credit institution folds, State Secretary at the Finance Ministry Stjepan Curaj said while presenting the bills.

“It is stated explicitly that the system of deposit insurance cannot be financed at the expense of taxpayers but solely by credit institutions,” Curaj said, noting that deposits were insured up to 100,000 euros.

Social Democrat MP Boris Lalovac said his party would support the bills, stressing that aligning regulations would prevent the spillover of disruptions from one country to another when a parent bank gets into trouble.

He commended European standards in household deposit insurance, adding that if Croatia was not an EU member it would not be able to weather the current crisis but would already be negotiating with the IMF.

We will benefit from these laws in the long run, he said.

Grozdana Peric of the ruling HDZ party said that alignment with EU regulations would reduce risk for depositors and that any future bank collapse would be covered with banks’ payments and not from the state budget.

MP Davor Dretar of the Homeland Movement, too, supported the bills.

Sandra Bencic of the green-left bloc said the bills failed the regulate the issue of sale of household debts to debt collection agencies and announced that her group would propose amendments.

Citizens often do not know how much they owe and to whom they owe money and even when they pay their debt, they do not contact the Financial Agency to have their accounts unblocked, she warned.

Bridge MP Zvonimir Troskot said that the laws were being amended solely for the purpose of joining the euro area, that Croatia was neither economically nor structurally ready for it, but that the bills had good elements that should be supported.