Finance Minister Boris Lalovac on Thursday expressed satisfaction with the Constitutional Court's decision that laws on the conversion of loans pegged to the Swiss franc (CHF) should stay in force until a final ruling on their constitutionality is made, saying that banks that had foreseen an option in annexes to loan contracts enabling them not to conduct loan conversion in case the Constitutional Court quashed the said laws, would be punished.

The Constitutional Court said at a news conference earlier in the day that it had launched a procedure to establish if laws on credit institutions and consumer credit regulating the issue of conversion of CHF-pegged loans to euro-denominated loans complied with the constitution and that both disputed laws would remain in force pending a final ruling.

The parties challenging the constitutionality of said legislation - eight banks and four physical persons - had submitted proposals challenging the constitutionality of the two laws as well as proposals that all activities undertaken on the basis of those laws be suspended. The Constitutional Court ruled that it would not grant the proposals for such temporary measures. Both laws are still in force and are legally binding, the Constitutional Court said.

Commenting on the Court's decision, Lalovac said that he was very satisfied "as a citizen" and felt happy for citizens with CHF-pegged loans.

Lalovac was hopeful that "this is now a done deal and citizens will finally receive fair and realistic loan statements, with reduced amounts of both the loan principal and interest."

"I said previously that banks were speculating and waiting for the elections...  Their speculation has proven futile and they have caused even bigger problems for themselves now. They put something in small print in annexes to loan contracts with their clients and they thought that it would scare them," said Lalovac.

He added that banks would now have to print new annexes to loan contracts and distribute them again otherwise they would be punished by the Finance Ministry and the central bank.

Lalovac described the Constitutional Court's decision as very positive for citizens, the government and the economy. Sources at the Constitutional Court were unable to say today when a final ruling on the said laws' compliance with the Constitution would be made.

Commenting on a reporter's remark that today's ruling was not a final ruling on the fate of the laws on loan conversion, Lalovac said that the Constitutional Court could make whatever decisions it wanted in the future.

"However, their news conference has shown that we are all on the side of Croatian citizens, which is significant progress in dealing with this issue. You have seen yourselves that there are no more pressures from the European Commission regarding the matter either. This is a chapter that needs to be closed so that we can turn to new projects and programmes," said the minister.

The laws on credit institutions and consumer loans, which regulate the conversion of CHF loans to euro loans, took effect on October 1. The banks were given a deadline of 45 days, until 15 November, to send their clients annexes to their loan contracts after which loans holders have one month to state their decision on the proposed conversion.

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