Franak NGO: It’s in citizens’ interest to know details of gov’t deal with banks

NEWS 10.01.202312:18
Ilustracija/Patrik Macek/ Pixsell

The Franak association wondered on Tuesday why the government was hiding the details of the agreement with the banks on the suspension of arbitration proceedings if that agreement was beneficial for Croatia, calling on it to "urgently and without delay" publish the text of the deal.

The Franak association of holders of loans pegged to the Swiss franc referred to a news item published on Monday by the news website headlined “The government has reached a deal with the banks for the Swiss franc loans, the settlement worth 2.5 billion kuna and it’s a secret”.

Franak says there is doubt as to whether that agreement was the reason for the government, when giving the opinion to the Court of the EU in the Croatian case C-567/20, to present completely unfounded and disputed positions contrary to Croatian and European law and unfortunately in favor of the banks, while the European Commission has given the opinion that Croatian consumers, just like Hungarian and Polish ones, have the right to full restitution, even if this would be prohibited by law.

The association calls on the government to urgently and without delay publish the text of the agreement with the banks based on which the banks waived arbitration in Washington.

The Ministry of Finance stated on Monday that the agreement reached between the state and banks on the suspension of arbitration proceedings as of 30 June 2021 “does not concern the relationship between credit institutions and citizens” and does not contain financial obligations for the budget or Croatian citizens.

The ministry noted that the government had notified the general public of this case on 5 July 2021.

Croatia’s government and OTP Bank Plc, Erste Group Bank AG, Raiffeisen Bank International AG and Raiffeisenbank Austria d.d., UniCredit Bank Austria AG and Zagrebacka Banka d.d., Intesa Sanpaolo Holding Internacional Luxembourg and Privredna banka Zagreb d.d. and SberbankEurope AG and Sberbank d.d. on 5 July, 2021, informed the public that four arbitration cases brought by the commercial lenders against Croatia before the International Centre for Settlement of Investment Disputes (ICSID) in connection with the conversion of CHF-denominated loans, were suspended on 30 June that year

On 30 June 2021, Intesa Sanpaolo Holding International, Privredna Banka Zagreb, Sberbank Europe and Sberbank d.d. Zagreb renounced the possibility of pursuing legal action in such cases, and Raiffeisenbank International and Raiffeisenbank Austria d.d. withdrew their case before the Commercial Court in Zagreb.

The cases concerned the Consumer Credit Act and Credit Institutions Act, amended in 2013 and 2015, based on which loans denominated in Swiss francs were converted into euro or kuna-denominated loans. The conversion triggered a series of legal cases before different courts.

The latest press release issued by the finance ministry on Monday also recalls that access to the document concerning the suspension of the arbitration proceedings is restricted according to the established practice before the ICSID and the wish of the parties concerned.