franak.jpg
Photograph: HINA/ Lana SLIVAR DOMINIĆ / lsd

The Franak association, which brings together holders of loans denominated in the Swiss franc, said on Monday that caretaker Foreign Minister Miro Kovac's statements about UniCredit's lawsuit over the conversion of those loans were inappropriate and that the arbitration body where the suit was filed was not competent for the dispute.

Franak said in a press release that Kovac, instead of protecting citizens' interests as was his duty, had sided with UniCredit and other banks with his statement of September 15, when he said that the first lawsuit against Croatia for the conversion of Swiss franc loans had been filed.

Kovac said the government "wants to clearly say" that last year's conversion was "populist and insufficiently thought out, and now we have the first lawsuits and we will have to work hard to alleviate the damage to the... state  budget."

Franak said Kovac was a minister of Croatia and not UniCredit and that his statements caused direct damage to Croatia, especially if they were used as evidence against Croatia if any proceedings were to take place.

Franak recalled that the law on the conversion of Swiss franc loans was unanimously adopted in parliament and that the parliamentary Finance Committee adopted a conclusion calling on banks to submit a solution to the problem of CHF loan holders.

Franak said the damage of Kovac's statements was even greater considering that Italy's UniCredit, the owner of Zagrebacka Banka, launched proceedings against Croatia at the International Center for the Settlement of Investment Disputes in Washington, which the association said was not competent for the conversion of foreign currency-denominated loans offered by banks in Croatia.

Franak said "the practice of the EU Court ... indicates that no matter regulated by the Treaty on the Functioning of the European Union can be legally settled outside the legal order of the European Union."

Franak said it had been waiting for months for the government and the Foreign Ministry to inform the association and the public of what banks wanted from Croatia. "There is still no response, so the Franak association has reported Prime Minister Tihomir Oreskovic for suppressing information."

Franak said that Kovac, with his statements, "has de facto already signed a blank cheque to UniCredit bank" and that "the price of one company's racket, if other racketeers join it, over one EU state is HRK 8 billion."

Finance Minister Zdravko Maric said on Saturday that the Foreign Ministry had received a letter from UniCredit. "It's the announcement of a lawsuit," he said, adding that it was still possible to find a compromise solution that would satisfy all parties and avoid international legal proceedings.

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