Croatia and Slovenia solved a banking dispute stemming from the breakup of Yugoslavia, clearing the way for Slovenia to ratify its neighbor’s European Union entry planned for July.
The countries agreed to approach the Bank for International Settlements for a final settlement in a dispute stemming from the breakup of the Yugoslav-era predecessor of Slovenia’s Nova Ljubljanska Banka d.d.. Meantime, Croatia will suspend lawsuits from Croatian savers who lost deposits, according to announcement in Zagreb today. Croatian Premier Zoran Milanovic and Slovenian counterpart Janez Jansa are expected to sign the agreement on March 11.
The plan clears the way for Slovenia to ratify its neighbor’s accession to the EU in July. The two former Yugoslav republics have been haggling for years over 270 million euros ($351 million) that Croatia wants Slovenia to pay in compensation for the lost deposits. Slovenia, an EU member that controls NLB, has threatened to veto Croatia’s accession if the claims are not withdrawn.
“The republic of Croatia will ensure the stay of all judicial proceedings,” according to a copy of the agreement obtained by Bloomberg before the announcement.
Of the 27 EU members, Slovenia is the only yet to start ratification. Twenty-two states have done so, Germany, Denmark, Belgium and the Netherlands have started the process..
Slovenia is struggling with a political crisis as it battles recession and the threat of becoming the sixth euro member to need a bailout. Parliament on Feb. 27 voted to replace Jansa with Alenka Bratusek, the leader of Positive Slovenija, who has to form a new government and have it approved by lawmakers by mid-March.
The two nations asked the Basel-based BIS once before to mediate in the conflict. The bank in 2010 rejected a arbitrator’s role, saying it could not bring any added value to negotiations.
The agreement also paves the way for NLB, Slovenia’s largest bank, to start operating in Croatia, after being banned over the issue.
Another 130,000 Croat savers, who after the breakup of former Yugoslavia chose not to transfer their claims to the Croatian government, are separately seeking about $204 million from the Ljubljana-based bank.
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